High-ROI Networking

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Networking is addictive. For the most part, that's not entirely a bad thing. Networking is one of the most cost-effective forms of marketing, plus all the benefits to other areas of your business. But there is a potential dark side: It can become a huge time drain without producing proportionate results.

It's easy to understand the appeal of networking. For starters, there's generally no rejection. In fact, you've probably been to a networking event or two that felt kind of like a post-modern hippie lovefest. Networking simply feels better than most activities that we can engage in under the umbrella of "doing business."

Also, networking pretty much always works…eventually. And that's the first step on the slippery slope. See, once you have a taste of success from networking, it becomes a validation of whatever networking strategy and activities you've engaged in. Whatever you've been doing is working, so you obviously just need to do more of the same to get more results, right? It's self-validating, and that's why it's so addictive.

What if someone could show you a way to get double, triple, quadruple the results from your networking activities? Surprisingly, many avid networkers don't even want to take a look. They've already adopted the "If it ain't broke, don't fix it" philosophy.

Most people network haphazardly, with little or no strategy. Do you know what networking event (or networking site — the same is true online) most people attend? The first one someone they know recommends to them. There's no consideration as to whether it's the best format and the right people for their business.

Even those who have some kind of networking strategy are usually missing one key element:

For maximum return on your investment in networking, align your networking strategy with your business objectives.

I often hear self-appointed networking evangelists saying that you should network as much as possible, at any opportunity, because "you never know where your next opportunity may come from." That makes about as much sense as a scientist going into the lab and just throwing random chemicals together because "you never know where your next breakthrough discovery may come from."

If you want to maximize your results in the lab, you take a highly methodical approach, and your experiments focus on the area of research in which you're hoping for a discovery. While it's true that many of history's greatest scientific discoveries were happy accidents, that's because those scientists kept an open eye and recognized the unexpected opportunity when they saw it, not because they were engaged in random experimentation.

The same is true of networking. Sure, you can network anywhere, not just at networking events. Sure, once you're engaged with people, you treat everybody equally. Sure, you keep your eyes and ears open for unexpected opportunities. But for maximum results, choose venues and activities that are highly focused on supporting your business relationship needs. Time is the one truly limited resource. Choose well how you spend it.

So how do you determine those needs for your business?

In our book, The Virtual Handshake: Opening Doors and Closing Deals Online, we introduced the idea of the 7 Keys to a Powerful Network:

1. Character. Your integrity, clarity of motives, consistency of behavior, openness, discretion, and trustworthiness. This is driven by the reality and the appearance: the real content of your character, and what each acquaintance thinks of your character.

2. Competence. Your ability to "walk your talk" and do well the job that you claim to be able to do; your demonstrated credentials and capability. It includes functional knowledge and skills, interpersonal skills, and judgment. Similarly, this is driven by both the real level of your competence and by what each acquaintance views as the level of your competence.

3. Relevance. Your acquaintance's value to you, defined as their ability to contribute to your specific goals. The acquaintance's relevance is also driven by the value of the acquaintance's own network.

4. Information. The data that you have about the acquaintance. First are the basic coordinates: e-mail address, phone numbers, family Information, and so on. Also invaluable is information about their professional background, how their career is advancing, what coworkers say about them, what their likes and dislikes are, and so on.

5. Strength. The closeness of the relationship between you and your acquaintance. This reflects the degree of trust and reciprocity between you.

6. Number. How many people you know directly, including both strong and weak ties.

7. Diversity. Heterogeneity of your network by geography, profession, industry, hierarchical position, age, sex, ethnicity, political orientation, etc.

These are dimensions in which you can assess both your current network and what you need to support your business objectives, as well as the gap between them.

Every business has a unique combination of needs in these dimensions. For example, for a barber, the single most important element is competence. You can meet hundreds of people, pass out thousands of business cards, but most people are going to be reluctant to refer people to you until they know you give a good haircut. Relevance is a non-issue — everybody gets haircuts.

On the other hand, if you sell enterprise software into Fortune 500 companies, having a large number of contacts isn't a priority. You only have a few hundred potential customers, so having thousands of LinkedIn connections won't help you much. On the other hand, building strong customer and industry relationships and having a great deal of information about your prospective customers is critical to your success.

It would be great to have a network that's strong in all of these areas, of course. As a practical matter, though, it's really only possible to focus on a couple of them as the focus of your networking strategy. Start by assessing your current network (a subjective score of 1 to 10 in each area will work fine). Now consider your current business objectives for, say, the next three to six months. Which two of the seven keys, if you improved your network in those areas, would best help you achieve those goals?

Now you have the basis for determining the focused, personalized networking strategy that will allow you to achieve more results with less effort.

There are dozens of different tactics for each of the seven keys. Here are a few to get you started:

1. Character. Be a connector and take the initiative to make introductions proactively. Keep commitments. Respect confidentiality. Say "thank you." Volunteer.

2. Competence. As Will Rogers said, "If ya done it, it ain't braggin'." Make sure your online profiles are fully filled out with all of your major accomplishments and credentials. Write and speak on your topic of expertise. Say what you're going to do, then do it. Communicate clearly and accurately.

3. Relevance. Define your ideal customer, partner, employee, etc. Seek out venues where those people congregate. People tend to know others like themselves, so if you meet more people like your ideal customer, they'll give you opportunities to meet still more. Meet and cultivate relationships with the leaders and influencers in those groups. Use online networks like LinkedIn or OPEN Forum Connectodex to make highly targeted connections.

4. Information. Manage your contacts and collect data about them as you get it — birthday, kids, religion, interests, etc. Use LinkedIn to monitor career changes and other status updates from your contacts. Get a business card scanner. Make sure your own information is readily available and current in all your online points of presence.

5. Strength. Take a sincere interest in others. Be of service. Choose action over conversation. Help someone accomplish something in their business. Stay in touch on a regular basis.

6. Number. Opt for public or small group conversations and keep the one-on-one interaction focused on action. Participate less in more places, both online and in person. Publish. Speak.

7. Diversity. Assess your network and fill in the gaps (what kind of people do you not know?). Plan ahead. Start by meeting people now who can support some future goal. Once you've got a moderately diverse network, meet your friends' friends.

As you pursue these, it's helpful to realize that some are complementary, while others have an inverse relationship. For example, sharing information tends to help build stronger relationships, as does demonstrating your character. On the other hand, building stronger relationships typically means spending more time with each person. The more relationships you try to maintain, the less time you can spend with each person. Thus, it's difficult to work on building both stronger relationships and more of them. Similarly, it's difficult to pursue both relevance and diversity; by definition, they are competing priorities.

Put these techniques into action and you're on your way to becoming a high-ROI networker. High-ROI networkers don't spend their time seeking out people to talk to and telling them about their business. They draw people to them. They create such a presence, such an impression, that people seek them out, not vice-versa.

When people start seeking you out instead of the other way around, your whole networking paradigm changes. You'll quickly find that there's no shortage of opportunity — only a shortage of time to act on it.