Why real businesses don’t join networking groups!
Real businesses don’t network because networking is a significant investment of time and cannot deliver a reasonable return on that investment. It does not work for real businesses!
Organized networking is not part of a serious sales plan.
There are lots of networking organizations that promise an endless stream of prospects for business but, in fact, organized networking groups such as BNI or 4 Networking are filled with micro businesses and self-employed that cannot deliver significant opportunity for any growing business. These groups can play a role for the very small self-employed business. The problem is that ninety-nine percent of the membership of these organizations only employ the owner – there is no business opportunity! The result is a breakfast meeting filled with struggling businesses desperately looking for a prospect where few or none exist.
Why do real businesses not attend organized networking groups?
Established businesses develop relationships directly with a target business and do not depend on matchmakers or chance meetings at breakfasts or cocktail parties to develop a ‘friendship’ that will later develop into business. Doubt this? You will rarely, if ever, find an established business with more than a half a dozen employees at any organized networking event. An established business has a well-developed sales and marketing plan which provides the plans, resources and tools to sell effectively in the marketplace.
Established businesses do use networking but only with a focused and determined strategy connecting with similar businesses at industry events and business clubs. Even at business clubs such as the London Chamber or the IOD small and large businesses do not mix in the same circles. You can go to every networking event sponsored by the London Chamber and you will never meet the Patron members. The big fish and the small fish are swimming in different tanks!
How do you connect and do business with larger businesses that have the kind of budgets that will allow you to transform your business?
You need to prepare yourself and your business and professionally target larger businesses. This means you need to develop the selling skills and strategy to effectively locate, connect and present. Then you need to sell and close the business. If you don’t have these skills then invest and build the knowledge to play in the real game of business!
Does paid networking have a place in business? Sure, the typical high-street businesses ‘butcher, baker, candle stick maker’ can build solid local business and contacts. If that is your business model a networking group for the first year of business makes sense. I have gained real business from attending these groups but the pool of prospects is not of the quality to provide a reasonable stream of prospects for any but the smallest of businesses.
A big mistake businesses make is to believe the myth that it takes two or more years of networking to get results – this is a lie to get your membership fee! If you have a compelling business offer people will do business with you today!
The very worst mistake small businesses make is to hide from real marketing and selling by keeping busy networking – many are simply afraid to sell!
Don’t do this to your business.
Related posts:How I built my business on LinkedIn
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Great post thanks. I really enjoyed it very much. I can’t stress how powerful online marketing can be to even the most average user.
I found this site very useful for my online business:
Top Online Marketing Strategies
A really interesting article, highlights many of the issues that I see in networking.
The point Norman is making is that most businesses that have significant budgets to spend are not at traditional membership networking events because their buyers are not in the room.
This is completely valid, they are not… most traditional membership networking groups will have a drop out of 80% in the first year because the member is too busy to attend due to business success, probably not due to the group, or they have not seen any value to justify the £500 annual fee.
For the groups to say it will take two years is the natural response to “I’ve not had any business” as they have been coached in a structured way to get that 2nd year’s fee, knowing there will probably not a third.
But groups offer different things to different people. I am an active Rotarian, a committee member for my local FSB and champion other formal and informal networking groups because they offer more than potential opportunity… so walking away, feeling that a problem shared is halved or you have learned something knew that you can apply, are just as valid reasons as scoring a hot new lead.
I love prospecting, finding new business opportunities and in the old days I used to drive around the country knocking on doors, today I push out content via online platforms and use LinkedIn to research new prospects before knocking on the door…
Online affiliates have commented to add a link back to their world… no real thought has gone into the post, the link is all they want, it has more value to them than a conversation with a real person… their target is likely to be affiliate aggregation website owners who have no need to talk to real people anyway.
Combyne is using his network to generate revenue so will defend that to the hilt, I get that… he is right and so is Norman…
I’ve commented because I bumped into this thread via NRG Networks LinkedIn Group and in researching more about Norman before I knock on his door to help him Anglicise
I have an understanding of the value of a link, as the first commentator does but also understanding that people appreciate an intelligent contribution, so chose to add a few words.
Thank you… let’s connect via LinkedIn Norman and continue this chat after Santa has done his thing…
Jon Davey
01753 852904
Appreciate that established businesses have teams to manage relationships. However, how do you get established?
My background and experience was not in business at all. I have built an extensive database of people who “know, like and trust” me thanks to networking. This is not just through identifying those in the room, it’s by identifying the potential introducers. I am now very clear that networking is my primary marketing focus since I am selling “the invisible” – helping those with a technical and scientific background gain presence and influence to win sales and investment. People buy what they see on the tin – me! My business is built on relationships.
And networking isn’t just defined narrowly by networking groups. Most senior jobs are not advertised. They are based on who you know that will design a job for if they want you on board. Careful networking will have got you that job. And research indicates that those who are good at networking climb highest in corporate life.
Would appreciate a connection too, Norman! My blog http://anrah.wordpress.com/ will have more on this…..
Respect your right to have an opinion and I entirely disagree.
My business is one of those in between small businesses. Three to Five employees usually.
Over 50% of my clients come from networking in BNI and over 80% from word of mouth referrals. My largest clients are still small by bank standards, but have more than 20 employees. Every one of my large (by my standards) clients has come from networking.
My target client is a small business similar to most of those in the networking groups. So it makes a lot of sense for me, but I strongly believe that you can fill the room with others that will help you no matter who you are or what you are looking for.
Now is every networking group for everyone? By no means. If you are in B2B with a target client earning 10 million or more, maybe you’d be better served by not using some of the groups you have visited.
That doesn’t mean that your best path to success doesn’t come from relationships with other business associates and clients though. From where I’m standing that is what I would describe as networking.
Instead of making a cold call and having to “sell”, check to see if you can’t make a few warm calls to friends and associates and get a warm introduction. You will still probably “sell” at some point, but the prospect will be much warmer in the end.
LinkedIn is a great tool to help with all kinds of networking. But then that is just my opinion.
Let me know if there is anything I can do to help you in any way.
mitch:
Thanks for the clarification.
I do agree that some salespeople can get wrapped up in the activity of networking and fail to remember to get wrapped in the profitable activity of selling. Most of these don’t last or move around a good bit.
I’ll let you know if my experience changes as my business grows.
mitch:
I do appreciate what you are saying about modeling. But I also think that just because people do a particular model… is the best for them? Is it the best for you?
Maybe large/established organisation don’t send sales people to BNI because they are too ‘set into’ the activities like cold calling, spam emails and the traditional media they know. As I believe have quite low rates of return.
I think its fair in saying that companies that are generally within organisations such as BNI are small and specialised but this is not always the case and for people to do well they need to be high value/quality otherwise it will just not work. Many members are from larger businesses.
So saying they are not ‘real’ businesses is probably just plain insulting. Typically members can be getting £20.000+ a year of sales… not bad return on sales for 2hrs a week. As per all cross sections you get both good and bad… but BNI has a degree of filtering involved.
Rather than saying ‘real’ businesses should not do this or that I believe the best course of action is for a business to try ‘free form’ , ‘organised’ [BNI etc] and online social networking along with other forms of and sales, measure and go with what works.
I think “A big mistake businesses make is to believe the myth that it takes two or more years of networking to get results – this is a lie to get your membership fee!” is a little bit of a miss-representation! If you “compelling business” then you will see sales straight away. At least with the BNI its a case that it takes a while for what is called Tier 3 sales to start coming in… which is where the bigger money is.
“they demand their salespeople to go directly after the business they have targeted” could still be an indication of how ‘real’ (as you class them) companies believe they have to or are set-up to behave. Would you say “Utility Warehouse” is not a real business because it does not use the sales techniques of BT or British Gas. They extensively use networking groups like BNI. Or high street banks that compete for positions in some groups.
I can see plenty of businesses that organised networking would be a complete waste of time but its not the case that its only for very small businesses that do not feel comfortable with selling. It is a friendly place to learn to sell (for those that need it) but if you don’t use proper selling techniques then it will not work as any other ‘proper’ program.
Organised networking is not a breakfast club or a chance to meet friends its a serious focused time to do business. If we are criticising that approach to networking I would agree with you 100% but to blanket statement to say its for very small business that should be doing something else… its just too much of a broad brush.
Toastmasters is a great option for the speaking to people. But I think if you find the correct networking group you will get that as well, be able to learn from people who have already done it themselves and from the first visit start building a ‘sales force’ of like minded businesses.
Regularly I approach people in my networking group and “Great pitch but you didn’t tell me about XYZ if we are to sell your services or potential customers who you are for them?”. Not sure how much the training, coaching and combined experience would have cost me but I would imagine it would be more than my subscription.