What is Networking

Quote: The building of a team of powerful, proactive referral partners capable of providing a consistent supply of referrals for your business is what power networking entails.

This chapter includes the following topics:

o Power networking examples

o Networking definition

o 7 networking myths and realities

Before we get into networking, let’s look at some examples of what people have accomplished by employing successful networking methods. We include instances from Local Business Network mostly because these are people with whom we have worked and whose stories we are familiar. In most circumstances, the term “structured networking organization” can be substituted for LBN.

We tell these anecdotes to show you how effective networking can be for anyone who is ready to learn the concepts of power networking and put them into practice on a regular basis. Many of those who do so are rewarded with hundreds of thousands of dollars. Referral partners account for anything from 25 percent to 90 percent of many businesses’ sales. We hope that these examples inspire you to read more and think about the values we teach.

Structured networking is the most effective business growth tool for a website design firm.

In 1999, Steve Hyer founded IGD Solutions, a website development business. He became a member of Local Business Network, a structured business referral group, in the year 2000. Steve was new to not just business but also networking.

LBN recommendations accounted for an average of 38% of his revenue during the next three years. Each year, this amounts to six figures in actual currency. Steve was able to build a continual referral stream and consequently a continuous supply of new leads and clients by forming strategic and referral partner connections with members of his own chapter as well as members of other chapters. The regional mixers were particularly beneficial to Steve in terms of identifying and cultivating referral partner ties with folks in the technology area.

“LBN is the single most effective approach we have utilized to advertise our business,” Steve writes. It’s incredibly beneficial because of the routine of meeting twice a month and focusing solely on exchanging referrals.”

In a year, I went from being a corporate slacker to becoming a successful business owner.

When his firm was bought out, Mark Raymond’s position in information technology was unexpectedly terminated. The IT industry was slowing, and Mark realized he needed to diversify his income. He understood that growing a business takes time.

Mark has a background in business. He has previously run a variety of companies, ranging from disc jockeying to truck driving to acting as a multi-media specialist at auto shows. He had created a thriving real estate rental business and owned more than 10 properties, so he was fortunate. Even so, he needed to supplement his IT salary.

As an Independent Associate, Mark joined Pre-Paid Legal Services. He concentrated on sales rather than team development, yet he required prospects and referral partners. Companies and small company owners were his target audiences, but he didn’t know where to begin.

His real estate agent wife, Tricia Raymond, was already a member of a Local Firm Network, and she pushed him to utilize it to market his business. Mark knows only one path to take: full speed forward. He rose to the position of President of his LBN chapter and worked hard to develop referral contacts.

He sold over 400 Pre-Paid Legal subscriptions within a year of joining LBN. LBN was responsible for over half of the memberships, 180 in total. He now has a fast expanding countrywide network of business colleagues that are assisting him in expanding his company.

A sales agent for a title insurance company receives more than 60% of her business through referrals from networking groups.

When Sandra Maurer joined the Birmingham, MI branch of Local Business Network, she had no idea how effective networking might be. Relationships with mortgage lenders, attorneys, and real estate agents were critical to her success.

Sandra began visiting as many LBN chapters as she could in order to meet and create connections with critical referral partners. She went to every regional mixer to meet new people and expand her network. She developed into a phenomenal referral generator, generating up to 50 or more recommendations every month.

Within two years, the LBN ties she had developed were contributing more than 60% of her revenue. Even though she was selling different products and services, she brought those ties with her when she changed positions and had an immediate sales base.

Annually, an accountant gives and receives over $100,000 in referrals.

Norm McKee is a business consultant and accountant. Referrals from LBN members accounted for around 25% of his revenue during his first year with the organization. It increased to 40% in the second year. He also started an employee benefits agency with other LBN experts, which has the potential to create much more profit than his already wealthy accounting practice.

Norm’s referral partners send him eight to ten new customer referrals every month. He earns more than $100,000 in recommendations each year and distributes at least as much to his partners.

“We chose LBN as our networking club because of the structured/instructional oriented curriculum given, which gives all members fundamental control over their networking efforts,” Norm explains. We discovered that LBN members recognize the value of relationship marketing and how to use connections to create marketing opportunities for their businesses.