Targeted Networking

In our first last installment of this blog, we discussed three ways that you can enhance your networking results. In this installment, we are going to take a deeper dive into how to make your networking more targeted. The two main keys to making your networking more targeted are to define your ideal networking partner and establish a plan to meet these ideal networking partners. We will discuss each of these keys in turn below.

The first step to making your networking more targeted is to define your ideal networking partner. Your ideal networking partner is talking and working with the decision makers that you want to meet on a daily basis. In essence, they are talking and working with the decision makers in your target market. How do you determine whether someone will be an ideal networking partner? You need to perform advance research and ask targeted questions during your initial meeting to ascertain who they are working for now and who they want to work with in the future. You also need to ask questions regarding their core views regarding the role of networking in their service delivery model. Here are some characteristics of your ideal networking partner. 

1. Your ideal networking partner has an established book of business full of companies that you want to work with.

2. Your ideal networking partner has a flush pipeline full of prospects that you would like to serve.

3. Your ideal networking partner is focused on developing more prospects and customers in your target market and is open to cooperative marketing to increase business opportunities for both of you.

4. Your ideal networking partner works in a complementary field and considers themselves a resource for their clients.

5. Your ideal networking partner is creative and resourceful and understands that an introduction to you will help drive the value that they bring to customers and prospects.

6. Your ideal networking partner is a keen listener and asks thought provoking questions that will uncover opportunities for you and their other networking partners.

Now that we have a picture of your ideal networking partner (who you want to meet), we have to establish a plan for meeting these super networkers that share a niche market with you (how are we going to meet them). The first step is to create a list of 8 to 10 professions that compliment and do not compete with your service offering. For example, an accountant will often find it useful to network with bankers, financial planners, payroll providers, and attorneys because they each play a role in a client's financial well being and risk management without competing against the accountant. 

Once you have established the list of complementary professions, you will need to do some research to identify the professionals that focus on your target market. I find LinkedIn to be very useful for this exercise because it allows you to search with keywords and review the professional's self created profile. I look for profiles that speak to and clearly identify the professionals target market to see if we have target market synergy. If the profile speaks to a clearly defined target market, it shows me that the professional has a clear understanding of where they want to go and how they are going to get there. A profile that speaks to everybody and focuses on nobody is a clear sign that the professional's marketing messaging needs a major overhaul and this person could be a good prospect rather than a networking partner for professionals providing marketing or communications services.

The profile is a good start for evaluating whether target market synergies exist. If they do, you should try to set up and introductory phone call, meeting, or lunch to confirm your research and to determine whether this particular professional shares your qualitative views regarding networking. Networking is a process and your research will not always result in the right connection. But, you will never make the right connections if you don't start the process. Commit to the process of targeted networking and I assure you that your networking will be enhanced and your pipeline of referrals will begin to blossom.

Brian Kerrigan JD

Three Ways to Enhance Your Networking Efforts

One of the common complaints that I hear from business owners is that networking does not work for me and is a waste of time. In other words, they have not received any clients or customers from their networking efforts. Typically, they reach this conclusion after attending a series of non-strategic events with no plan and no follow up. In this article, I am going to address three ways that you can enhance your networking results.

1. Your networking should be targeted. You would not dream of setting up a marketing plan without a clear definition of your ideal customer or client. But, business people will network aimlessly without any thought about their ideal networking partner. Your ideal networking partner should be talking with the people that you want to meet on a daily basis. In essence, their clients and prospects should fit within your definition of your ideal client or customer. 

2. Your networking should be strategic. The 80/20 rule states that you will receive 80% of your referrals from 20% of your networking partners. The secret to making your networking more strategic is to concentrate most of your networking efforts on 10-12 people that are targeting similar types of clients and customers and share your commitment to strategic networking. Once you have identified this key group, you should establish a short business plan and strategies that will yield additional business opportunities for each of you.

3. Your networking should be triggered rather than general. Most networkers tell people what they do and potentially some of the benefits that their clients and customers receive. But, they do not adequately address the psychological characteristics or factual circumstances that result in a need for their services. As a result, their networking partners have to work at matching up their conversations with the solutions that their networking partners provide. A solid networking plan educates networking partners about the triggering mechanisms that result in a need for your services.

The First Step in Business Planning - Where is the Business Now?

Where is the Business Now?

The starting point for meaningful strategic and business planning begins with an objective assessment of how the business is currently performing. An objective analysis requires you to review your financial statements with a critical eye. You do not need to have an accounting background to perform a reasonable analysis. Instead, you can work with your business advisor to perform a thorough and thoughtful analysis using the profit and loss data from your last three tax returns. The basic goal of this analysis is to highlight the positive or negative trends in your financial results so that you can determine the drivers and drains on your profitability. Once the preliminary analysis is complete, your business advisor should review the findings with you to drill down into the root causes of your successes and areas for improvement. This analysis will require your business advisor to analyze rather than crunch the numbers to achieve the desired effect. Here are some of the typical types of analysis that will need to occur.

1) Did gross sales rise, stay consistent with the prior year, or decline on a year over year basis? Rising sales are typically found in businesses that have the ability to generate new customers, retain current customers, or increase the price of their product due to rising demand for their differentiated goods or services. This is obviously the desired state for most business owners.
Stagnant or declining sales are typically seen in businesses that are not generating new customers, not retaining current customers, or not able to raise their prices due to lack of demand or perceived customer value. The preliminary analysis simply allows you to identify whether sales are rising, consistent, or declining over the term of the analysis. In essence, it helps to identify the symptoms that are showing in the financial statements. However, it does not explain the root cause underlying the applicable trends. This will require further questioning and analysis that is best performed by a competent business advisor with deep experience interpreting the meaning of financial statements.

2) Are the business expenses increasing, remaining consistent, or declining on a year over year basis using a percentage of sales measurement process? Generally, declining expenses on a year over year percentage of sales basis are a good sign that the business is controlling its expenses, operating in a more efficient manner, and becoming more profitable. This is particularly true for general and administrative expenses which should be growing at a slower pace than sales growth in a lean and efficient enterprise. Consistent or increasing expenses on a percentage of sales basis are generally a sign that the business is not operating in a more efficient manner or at optimal capacity. The preliminary analysis allows you to measure the percentage change for each category of expense items in your business. However, the more important analysis lies in why the percentage changes occurred on a year over year basis. For example, if a particular expense category is rising significantly on a year over year basis, you should analyze the particular expense category to determine why it is increasing on a percentage basis during the analytical period. The goal of this in depth analysis is to identity non-revenue driven expenses that can be cut slightly to achieve increased profitability.

I would like to talk briefly about expenses. During many of my conversations with networking partners, the networking partner will express concern that cost cutting alone will eventually lead to negative trends. Though I agree with the sentiment that across the board cuts will imperil a business, I would seldom advocate for such an approach. Expenses come in different shapes and sizes. Sales producing expenses such as commissions for sales people, marketing costs, and business development costs should probably not be cut if the goal is to increase sales. However, I often find that the expense mix in these categories may need to be tweaked to achieve the best possible sales results. For example, it is important to measure the impact of these expenses become some vehicles such as basic advertising are becoming less effective in modern times. General and administrative expenses often represent a potential means of capturing additional profits within a business entity if they are increasing as a percentage of sales. General and administrative costs represent a cost of doing business. However, they should not outpace or evenly track sales growth unless inefficiencies are present. 

I would strongly encourage all business owners to perform this analysis on an annual basis with their business advisors. A financial statement represents the report card for your business. But, it does not have to be a predictor of future results if the trends are identified and plans are put in place to emphasize the positive trends and minimize the negative trends.

Brian Kerrigan, JD

The Networking Process

The Networking Process as a Means of Starting and Maintaining Relationships

I read an interesting article by Ivan Misner. Ivan Misner is the founder of Business Networking International. I am not a member of BNI, but I find many of their networking techniques to be very useful. The article focused on establishing a new definition for networking. The definition that Mr. Misner and his group chose was as follows. The process of developing and activating relationships to increase your business, enhance your knowledge, expand your sphere of influence, or serve the community.

I view networking and the sales process in a similar manner. The goal of my networking is to establish mutually beneficial relationships with other professionals in the community. With this goal in mind, I want to work through my process and how to approach networking with a relationship mindset.

The first step in my networking process typically involves a networking event. The event provides you with a unique opportunity to meet other professionals in the community. The key is to approach the event with a relationship mindset. When you introduce yourself to another professional, you should start with the goal of learning more about them and what they do. If done correctly, you should do more listening than talking during the initial stages of the conversation because the goal is to make an initial determination as to whether you can form a long term mutually beneficial relationship. Through active listening, you can start to determine how they approach relationship building and the networking process. If you leave the event having met one or two people who approach networking in the same manner, you should consider the event a success.

The second step in my networking process is the initial follow up. If you fail to follow up on your initial conversation at the event, you have lost an opportunity to potentially establish a long term mutually beneficial relationship with this unique person. I like to follow up within twenty four hours to show my interest in learning more about them and how I can help them achieve their goals. My initial follow up will involve asking for a one on one meeting over coffee or lunch so that we can explore a potential networking relationship. The key to this initial meeting is thoughtful questions geared towards determining whether you can work together to increase business opportunities, business relationships, enhance each other's knowledge, and expand each other's sphere of influence.

The third step in my networking process involves planning and the establishment of a second meeting. At this point, I should have a good feel for whether we can develop a long term mutually beneficial networking relationship. So, I can now focus on how we can work together to increase our business opportunities and business relationships. The goal with this step is to focus on strategies and tactics that will help us proactively create new business opportunities and relationships. This step is not passive in nature (I will refer you to someone who needs an accountant). Instead, it involves establishing an active relationship and becoming advocates for each other in the business community. When you get two good networkers together, the ways in which they can work together to create new business opportunities and relationships is only limited by the breadth of their collective imaginations. Consequently, the time spent on the planning, the planning meeting, and the execution of the planning will create new business opportunities and relationships for each of you.

The fourth step in my networking process involves executing the agreed upon plan and building the relationship to a new level. The plan typically involves strategies and tactics that will increase the quality of new networking relationships and new business opportunities for each party. To achieve the goals of the plan, the new networking partners will have to achieve results for each other, remain in regular communication, and engage in additional planning sessions to tweak their shared plan. Many networkers initially view this step in the process as too time consuming and limiting because they want to move on to the next "connection". The reality is that if you perform this step correctly, you can place laser focus on the 20% of your networking relationships that will help you realize 80% of your new business opportunities and relationships. If you choose you're networking partners correctly, you will end up with a select number of friends and advocates for your business and you will be a friend and advocate for their businesses.

I would like to close with some final thoughts on networking and friendship. You have developed friendships with people that you know, like, and trust over the course of your lifetime. You did not become friends because you met once at an event. You did not become friends because you followed up and had lunch together once. Instead, you became friends because you built the relationship over shared meals, shared experiences, and shared interests. If you view building networking relationships like building friendships, you will have unlimited success in achieving the shared goals of increasing business opportunities and relationships.

Brian Kerrigan

Success Tips from Sales Guru Tom Hopkins

I read an interesting article over the weekend. The article is titled Ten Surprising Success Tips from Amazing Sales Guru Tom Hopkins. Here is a link to the original article.

http://www.inc.com/kevin-daum/10-surprising-success-tips-from-amazing-sales-guru-tom-hopkins.html?cid=sf01001

The reality of business is that we are all in the sales business. However, some of us just embrace the journey more than others. Though this article and its content did not really surprise me, it provided some good reminders on the types of behaviors that lead to success in sales. I will revisit some of the more important items in this blog post.

1. Time Management - The article implores us to covet our time. We need to do this with all aspects of our business and our lives. In our business life, it is extremely important that we schedule our time on a daily and weekly basis. Most business owners move about their business life in a reactive and client service type mode. In essence, they move from client to client providing the service for which they were hired. The problem with this approach is that it does not allow for development of sales, marketing, and business development programs that will lead to the next ideal client. Please try this recommendation out for a period of three months. I want you to spend the first hour of your day cultivating and nurturing new leads for your business. If you place a priority on this item and proceed strategically, you will increase the quantity and quality of your sales leads.

2. Be a Follow up Specialist - The article asks us to deliver on our marketing promises. The world is filled with "slick marketers" that promise the world and under deliver. You should strive to be a business owner that is capable and willing to deliver on your promises. I had an interesting discussion regarding this point on Friday. I was talking to a strategic partner about why I am so confident in my marketing efforts. My confidence lies in the fact that I believe that I can help every business owner grow the value of their business and make better decisions. In essence, I know that I can deliver on the promises that I make to my clients.

3. Don't be a Lemming - The article implores us to stop following the pack. One of the things that I always seem to end up discussing with clients and referral partners is out of the box thinking and how it can propel your business forward. Most business owners call on their education, past experiences, or outside reading to give them the solution to problems or issues that are impacting their business. Though all these things are helpful, they tend to push you toward the herd mentality of making business decisions. I want you to think differently the next time you are confronted with a business issue. As you analyze a problem or issue, I want you to include two or three non-traditional out of the box options for solving the problem. The out of the box options may not be the best for this particular situation. But, the exercise will force you to consider the usual and unusual alternatives that you may have before you make a decision.

4. Keep a Thick Skin about Rejection - The article asks us to positively cope with the inevitable "no" responses that you will receive if you tackle sales and marketing with any level of tenacity. I would take this advice one step further.  Use the "no" responses to discover why your solution did not work for this potential prospect so that you can refine your approach the next time around. The goal is to get to the root cause of the prospect's decision, if possible. Once you understand the root cause, you can either accept the fact that is not the right fit for your organization or you can fine tune your approach to the next client that presents similar objections.

I hope that you found this post helpful. Please feel free to add any additional comments. Your feedback would be greatly appreciated.

Welcome

Welcome to the business advisory blog for the Connecticut Power Networking Group. The goal of the blog is to bring to you, the business owner or sales professional, a steady stream of information that will help you grow the value of your business and make you more productive. If you would like to guest post on the blog, please feel free to reach out to me via my LinkedIn profile or current contact information. I look forward to having you along for the journey.

Brian Kerrigan