“I get by with a little help from my friends” is a famous line from a popular Beatles song. While this line applies to life in general, we can easily use it to describe the power of networking. Change the words “my friends” to “my referral networks,” and you’ll see the power of networking in business.
Networking is an important and unavoidable part of growing your business. Whether you enjoy the process of networking or not, the power of networking is undeniable. While you can try to grow your business without networking efforts, you’ll soon realize that networking’s benefits are too many and too important to ignore. To maximize your business’s potential, you must prioritize building your professional network.
What is Networking?
First, let’s define a key term. Networking simply means creating and maintaining positive relationships with colleagues, customers, leads, and other professionals in your industry. Professional networking is the deliberate act of meeting and connecting with people you can help and from whom you can receive help when needed. While you can network casually and only when chances arise, networking takes time and effort. Many events are organized with the sole purpose of networking. Some examples of these are workshops, speed networking, and trade shows. Networking should always be viewed as creating win-win situations for you and your contacts.
Benefits of Networking
There is no doubt about the importance and power of networking in business. Investing time and effort into building your professional network has numerous benefits. Here are a few of them:
- Access to the industry news and new information
A vast professional network means having access to various sources for industry developments and the latest industry news. Your professional network can help keep you updated and aware of important information and trends that may affect your business. You might hear of a new legal requirement for your industry through your network that you can prepare for in advance. You might learn about a new technology that can help you produce the items you sell at a lower cost.
Access to crucial information can help you grow and scale your business. You may not have heard about this vital information if not for your professional contacts. This is just one aspect of the power of networking in business.
- Build your brand
When you are networking, you represent two entities – yourself and your company. Networking not only builds your company’s brand it also helps build your personal brand. Being visible and present is essential in building your brand. By attending various networking events, you put yourself out there and become a familiar face to your network.
When more people know about you and what you can do, it is easier to become a resource person that others support and trust. After all, people are more likely to trust people they are familiar with over those they’ve met for the first time. When you nurture your network contacts and relationships by being present, they will most likely come to you for knowledge and expertise.
Of course, this reflects on your business and company as well. When people trust you, it is easier to trust what you’re selling or the products you represent. This trust helps scale your business as well.
Again, the power of networking is harnessed by building relationships. You must continue to create new contacts and nurture previous connections to have much-needed trust between you and your network. Of course, this is great for business as it inevitably means people will refer you more. Most likely, these referrals will translate into an increase in your business.
- Create connections
Building your brand also makes connecting with contacts easier and fosters new relationships. Arguably, the most critical part of networking is building connections beyond your immediate professional network. Your goal is not just to connect with people within your network. You are also building bridges across networks. After all, you are already familiar with the people you know. What you’re after is the contact of the friend of your contact.
For example, you are looking for a new supplier of raw materials for the products you sell. You casually mention this to one of your contacts. Fortunately, one of his other contacts (that you’ve never met) is a supplier of exactly what you need. He makes the introduction, you have a meeting, and voila, you have a new supplier.
Take note that these types of connections and referrals don’t happen overnight. You must devote time and effort to building these trusted connections. After all, you would only refer and connect with people you trust and can vouch for personally. Or, at the very least, you’ll refer someone you’ve met a few times and have experience dealing with over someone you’ve never dealt with personally. Again, with business and life, there’s a saying, “It’s not what you know, it’s who you know.” This is very true.
- Increase confidence
Another benefit of regularly networking is that it increases your confidence. The more you talk to people and the more comfortable you become talking to others, even those you just met, you become more confident in yourself and your skills. When you talk to people you don’t know and begin communicating with people outside your usual circles, you open your mind to new perspectives and information.
Even if you don’t enjoy networking, the more you do it, the easier it becomes. As people say, practice makes perfect. The more you deliver your pitch, the more people you meet, the more events you attend, your confidence further increases. This is, again, the power of networking.
This newfound confidence carries over to the business or company you represent. You become more confident in selling your products and offering your services to others.
These are just a few of the most important benefits of networking. Harnessing the power of networking in business is crucial and something that you cannot disregard.
Effective Networking Methods
Now that we’ve learned about the power of networking, here are some tips on building your professional network. The most common networking methods are the following:
- Trade Shows
- Speed Networking Events
These methods gather people from the same industry in one place, so they are great opportunities to start networking.
Part of professional networking is building your referral network. While similar to professional networks, referral networks are more specific. LinkedIn defines a referral network as “a collection or a group of individuals or organizations that generate referrals within a specific industry.”
Referral networks are more than your usual professional network of contacts, customers, and leads that you may or may not work with in the future. Referral networks are created to have a group of people constantly referring you or your business to customers and potential customers.
A referral network’s goal is to generate new business by encouraging those within the network to share what your company does, intending to attract new business. A strong referral network further illustrates the power of networking in business.
Here are a few examples of referral networks.
Customer Referral Network
The customer referral network is a common referral network model that many organizations and companies employ. Many businesses ask their existing customers to recommend their business to others and refer new customers. This model typically involves an incentive or reward for every successful referral. Several examples of popular tips for the referrer are a discount on their next purchase, a gift card, store points, and free products or merchandise.
This is also a good way of engaging with your existing customers and keeping your business top of mind. This model works; many businesses have gained new business through the referrals of their current customers. After all, who doesn’t love a gift? If getting a freebie is as easy as referring someone to a business you know and love, sign us up!
Employee Referral Network
One commonly untapped pool of referrers is employees. While many companies encourage employees to refer their company to others, the encouragement is not formalized or incentivized. You can create a system to encourage employees to refer new customers to your company consistently.
Again, an essential part of this is offering rewards or incentives to your employees. The reward doesn’t have to be big or grand. The incentive could be cash, gift cards, paid workshop costs, or tickets to a sporting event. When other employees see successful referrals resulting in free gifts, they are more likely to refer new customers actively.
Referral Partner Network
A referral partner network is made up of partners, either other businesses, contacts, partners, or customers, who enter a formal agreement to refer your business to potential leads. Generally, referral partners believe and trust the company they work with, thanks to positive experiences with them in the past.
These partners refer your company or services to people they are connected to when looking for a company to work with in business. In exchange for the referral, they earn a commission from you for every successful referral or closed sale.
The power of networking has been proven time and time again in business. Whether you enjoy it or not, networking should be a priority for you and your business.