Early on in my entrepreneurial life, I hopped on the business networking train and enjoyed the ride. I joined several local groups and got to know many wonderful people in my community. But eventually, I hit a wall and burned out on the whole scene.
While I still believe that there is value in belonging to certain organizations for a period of time, often these groups have a limited life span. Once you know everyone there is to know and if you realize you aren’t generating much business as a result, it may be time to move on.
Another factor that drove me crazy was the whole concept of meeting for coffee or lunch for one-on-one time. The mere fact that we exchanged business cards and rubbed elbows at an event led to some unwritten rule that we should now spend an hour together—even if our businesses couldn’t be further apart on the spectrum. To me, this became a gigantic waste of time, and too much interruption to my schedule.
What also happens as you build more of an audience online is that your local networks no longer hold all of the power. My business quickly shifted to a model where at least 70% came from online sources. Though I will always want to be involved in my community, it became clear that my time was better spent with online efforts and far fewer local networking meetings.
With that said, I still believe there is a lot of value in business networking groups. There are also certain businesses that need that extra personal touch and do well here, including life coaches, insurance agents, mortgage brokers, financial advisors, and anyone who offers services specifically for the local community.
But if you’re involved in any networking groups, I would like to encourage you to analyze the benefits you are receiving. As entrepreneurs, we have a limited number of hours in a day. When you treat your time like money, you can make decisions to spend it more wisely. You may think that all that networking you’re doing is bringing you new business, but when you look more closely you may find that two of your three networking groups aren’t producing results. You can’t know what’s working if you aren’t tracking the results.
Analyzing Your Customer Data
To gain a better understanding of your clients and where they’ve come from, make a list of all of your clients from the last two years. I recommend doing this in a spreadsheet so that you can keep a running record to review periodically.
Next to each client name, write in the amount of revenue earned (note that you may be able to export this information from your accounting software, depending on how you keep your books). Then, sort the list based on your highest revenue-generating clients to your lowest. Lastly, next to each client note how they found out about your business. Did you meet at a networking event? Were they referred to you by someone? Do they follow you on Twitter? Did they respond to a direct mail campaign? Be as specific as possible to get a good grasp on how they found your business.
Once you finish your list, you should have a clear picture of how clients come to your business. More importantly, you will have a roadmap of the strategies that have proven effective in generating business so that you can do more of what has worked for you.
You may find that certain people are referring the majority of business your way. If that’s the case, be sure to cultivate those relationships and appreciate those people. If specific ad campaigns bring you business, then consider whether you should do more advertising. If your costs to place ads are less than the new revenues generated as a result, then increasing your advertising spending makes sense.
By the same token, if there are marketing campaigns you’ve run that haven’t made an impact on client acquisition, then avoid repeating those mistakes. I recently asked a colleague how many clients she had landed as a result of her weekly networking group. She told me that the year prior she acquired three new clients, but this year she hadn’t signed any. We determined that she was wasting 16 to 20 hours per month in a group that wasn’t generating results. Her time could be much better spent on other revenue-generating activities.
If for some reason you’re unable to capture client data from recent years, start now. Ask every new client how they heard about you, and train your staff to do the same. Document sales figures, and soon you will begin to see trends. The goal should always be to do more of what works and to let go of any marketing strategies that aren’t producing results.
If, at the end of all this, you find your current networking efforts aren’t meeting your business’ needs, it might be more beneficial to join industry-specific trade associations and related groups to reach either the people who can refer more business to you, or the specific audience members you want to reach.
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