STRONG NETWORKS BUILD STRONG BUSINESSES
Did you know that most businesses generate the vast majority of their new business from referrals? And the great thing about referrals is that they don’t cost you a thing! Networking with your existing clients and business community – local, industry sector or interest group – is the best place to gain new referrals.
In this latest blog post we will outline the main ways in which you can maximise the value of your networking activity. Here are five ideas for you to consider:
1. Consider the lifetime value of a new client to you.
Let’s say you own a restaurant. The average customer spends $100 per visit and visits five times per year. The restaurant’s gross profit margin is 66% and their customers generally keep returning for around five years.
So, the lifetime value of the restaurant’s customers would be $1,650 ($100 x 5 x 66% x 5). With this value in mind, what could you give your customers to demonstrate how much you appreciate their repeat business? Perhaps it’s as simple as complimentary drink.
Reviews and referrals from customers is a great way to spread the word about your business!
2. Find the businesses in your area or sector that sell complementary products or services.
For example, a surveyor may work with lawyers, valuers, bankers, accountants, and tradespeople. Create an informal group of these people whom you already work well with and arrange a regular social get together – coffee, lunch or after work drinks? Focus on how you can work more effectively together, share contacts and referral business – this is how most formal networking groups too!
3. Focus on referring more work to your network than you seek in return.
When you give work to others, it will create a desire in them to give back to you. This is called the Law of Reciprocity. When you do something nice for someone, they’ll often reciprocate with a gesture far more generous. In this case, more referrals.
4. Find out where your target market hangs out in the greatest numbers.
There may be existing networks that you can join that refer work to you when you join them. For example, BNI, Chamber of Commerce, industry sector groups (construction, design, manufacturing, etc).
5. Sponsor and get involved fundraising or non-profit organisations with similar values to your business.
Choose something that you or your team are interested in but which also have a similar target market. This could be a sports club, community gardens, fundraising events, etc. Don’t ‘peddle your wares’ or try to sell when supporting these groups, events or organisationas. Just wear branded clothing or have signage up as appropriate and communicate your support via your own website and social media platforms – as this is great content too!
Your involvement with these organisations demonstrates a level of support for your community which creates engagement (helps people to know & like you) and builds trust with your combined target markets.
- Hold a brainstorming meeting with your team to identify how you can build stronger networks for your business
- Note down each of these ideas above and discuss ways you can implement some of these ideas for your business
- Create an action plan of the ideas you like best and assign people to the actions as well as timeframes or timing to implement