Is Your Networking Paying You Enough?
Are your networking efforts working for you?
When it comes to marketing efforts, it's important to determine which ones are paying for themselves, which ones are bringing in the bulk of your business, and which ones are duds.
Read on for a way to figure out if your networking is paying you back for your efforts.
When it comes to evaluate the return of your investment (ROI) of networking, you need to start by acknowledging that you're spending both time and money. Time may seem "free" but it's not -- every smart business owner puts a dollar value on their time. You'll want to calculate your efforts in terms of the time/money they're worth -- yes, even for things like networking.
So let's say your time is worth $100/hour, just to pick a number. If you spend 3 hours a week at networking events, including the drive time back and forth, that means that you're spending $300 a week, or a little more than $1,200 a month, on networking, not counting the price of admission or gas and parking.
Now tally up how much new business you've been getting from your networking efforts. Did you get $1,200 of new business from networking for each average month?
You may want to argue that networking is about building long-term relationships and not about making sales right then and there. And of course, you're right it is about the long-term relationship building. So it's important to evaluate your results over a longer period of time.
Track all your new clients back to the point of first contact - they may come to you several weeks or months after your first introduction. And then to be fair, evaluate the value of the client. Ask yourself the following question:
How much does an average new client bring you over time?
Depending on your business, this may vary, but let's just say, to keep the math simple, that a new client brings you $1,000 each year, and that each client sticks around for an average of two years. So a client's value to your business is $2,000.
Now here's where it gets interesting:
If you assume that your networking costs you $1,200 of your time each month, and you bring in at least one new client per month on average, at least over time, your networking will pay for itself. If you bring in more than one new client per month, you will come out way ahead.
If, however, you get significantly fewer clients, you may want to re-evaluate your networking efforts. With that, I’m not suggesting you stop networking! It is a great marketing strategy.
But you may want to see how you can improve your results.
- Are you networking at the right events? Do your target prospects or potential referral partners attend as well - if not, you're not networking in the right places.
- Do you have a compelling way to introduce yourself that memorable and in a way that inspires people to do business with you?
- Do you schedule the time to follow up with everyone you meet? If not, you're most likely losing out on many opportunities.
Does your networking conversation skills need a tune-up?
The good news is that with a little focus there's a lot you can do to improve your networking results. If you want to get some ideas, visit http://sueclement.com/88tips to download a free copy of "88 Tips to Network Like a Pro" ebooklet and audio recording.
After making some changes continue to track your results to ensure your networking ROI of time and effort is paying off!