Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Connecting is not enough: Networking demands a strategic approach

by
23rd Mar 2009
Save content
Have you found this content useful? Use the button above to save it to your profile.


Guest practice editor Mark Lee talks to networking strategist Andy Lopata to find out why accountants need to form a plan of action when it comes to networking.

Networking is a much misunderstood concept. Accountants who don’t ‘get it’ are no different to other service providers in this regard. Some accountants are regular attendees at local breakfast meetings. Others may have tried it once, not come away with any new clients and decided it’s not for them. The rest of us probably network almost at random. With new networking groups springing up all the time, it’s all too easy to remain unfocused.

Historically, networking has not been a key activity for many accountants, but as clients move on to cheaper advisers or slip into liquidation there’s likely to be an increased need to actively seek out new clients.

Telemarketing is the answer for some, while others will become more active networkers. We will return to the subject of effective networking techniques in subsequent articles, but before that it might be useful to look at networking strategy.

What does success look like?
Before becoming a speaker and consultant on business networking strategy, Andy Lopata was the managing director of the Business Referral Exchange (BRX), a national business network. He tells a story about how one of their members, a bank manager, gave up his membership after a year.

“It’s been a complete waste of time”, he confided to his fellow group members. “I’ve only had six ‘switchers’ from the group.”

When this story reached Lopata, he started asking contacts in banking what they felt a reasonable return would be from a year’s membership of one of the BRX groups. He asked other business managers in the same bank, as well as business managers in other banks. He also questioned senior management figures in banking as well.

Lopata recalls they all shared the same view. A reasonable return on investment for membership of such a group would be three ‘switchers’ in a year. That figure would justify membership. This surprised him, as it was half of the figure the resigning member had achieved. He felt that his membership had been a ‘waste of time’, despite doubling what many agreed was a reasonable return of his investment. Why was that?

In Lopata’s view the answer was quite simple: the bank manager had not worked out what his return on investment should be. Quite simply, he didn’t know what success would look like. If we’re honest isn’t this the case with many of us?

Set your goals
Through his conversations with people at networking events and at his talks across the UK, Lopata has identified two important factors that will prevent many businesses getting the most from their networking:

  1. Most people attend networking events or sign up to online networks because they are invited to do so.
  2. Most people join networks because they like the ‘buzz’, see a lot of activity or see other people winning business.

Lopata points out that neither of these make sound business sense. Neither suggests a purpose to membership, and that’s a major problem. Joining networks based on invitations and buzz does not lead to the right behaviour within the network. So many people go through the motions, with no thought to the outcome.

How many networking events do you attend, or other people in your practice? How many groups does your firm belong to? Have you (and your partners if you have any) decided how you will determine whether or not such activities are worthwhile? I tend to think there are still plenty of accountants who judge success by reference to whether or not they pick up a new client. If that doesn’t happen fast enough they move onto another group or continue networking at random.

Use the opportunity
A couple of years ago, Lopata attended a networking event in Lancashire. Each member of this group was invited to give a 60 second presentation each week. The aim of the presentation was to educate their fellow members to enable them to find and convert referral opportunities.

It came to the turn of the accountant in the group. Lopata waited to hear what he would say. Would he make the common mistake of giving an overview of his business without any depth? Would he ask for a general referral, such as someone who is ‘unhappy with their current accountant’? Would he be a bit sharper than that and ask for a specific connection - perhaps an IFA who could refer to him, or a one man band just about to take on their first employee?

He chose none of the options above. He stood halfway out of his chair, looked around the room, shrugged his shoulders and said weakly: “I haven’t really got anything to say this week.”

As Lopata explains, this lack of focus did not just present him in an extremely poor and unprofessional light; he simply, without thought, threw away a tremendous opportunity to generate new business. Why? Because he couldn’t be bothered to spend the time planning his networking.

Focused networking
‘You must go and network’ is a common cry. The only problem is that it’s rarely followed by the question, ‘why?’. According to Lopata, many people network blind, participating because others tell them that it’s a good thing to do, losing faith because they don’t know why they are there or if they haven’t won a new client fast enough.

Will the negative perceptions, drawn from early, perhaps naïve, experiences of networking ever change? I think they will have to, and Lopata agrees: “You need to look at networking from different angles and set your goals from networking, know what you want to achieve, develop a strategy and measure the results. Not only that, you are perfectly placed to help your clients do the same. If you see networking membership fees among their expenditure, challenge them. Ask them which networks they have joined, why and what results they expect to see from them.”

The more focused we all are in our networking, the more we stand to benefit. Going to events with purpose, participating online with clarity and contributing to groups with vision will benefit all of us.

Lopata says: “looking at the wider picture can make a massive difference to an accountant’s business as well. It involves moving your understanding of networking away from a sales based activity focused on events and specific websites. Instead you need to better recognise the benefits of collaboration, learning, peer support and knowledge sharing with connections from all backgrounds. These can all have a huge impact”.

Some people may be surprised by Lopata’s view that “networking is not just an activity for small business owners. It is an essential tool for leading politicians, the captains of industry, individuals within large firms and people looking for a new job.” In my experience, many people leave networking until they are desperate to secure a specific desired outcome,and that’s too late. Networking is more about fishing than harpooning.

To help people ‘get it’ Lopata recently created a special audio programme, 'Networking in 90 Minutes'. I’ll leave the final words (subject to your comments) to Lopata who believes: “As a business tool networking needs to be considered and applied thoughtfully; allied to business goals with clear outcomes. Networking is not just a numbers game. It’s not just about being at the event or what you do when you are there but why you are there in the first place. Connecting is not enough. With the right approach, networking can be the most valuable tool your practice possesses”.

[email protected]
www.networking4referrals.com

Andy Lopata is one of the UK's leading business networking strategists.

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.