Whenever there’s talk of a possible recession, a common reaction from business is to batten down the hatches and ride out the storm. In fact, this should be a time to look at implementing strategies for profitable growth.
If you’re in a market sector that is being squeezed or becoming more competitive, then you have to be more successful than your rivals in winning any available business.
One way of doing this is by maximising opportunities from networking and from existing contacts. Referrals are often the best source of new business. The clients have been recommended by a third party in whom they have confidence, so one of the hardest parts of a sale – creating awareness and credibility in your company, products or services – has already been completed. And they are coming to you because they are genuinely in the market for your offering. Despite this, very few firms take a strategic approach to developing their network of contacts into a fruitful source of revenue.
Networking can quantifiably contribute to your bottom line, but only if you develop a plan of action with set targets that you are prepared to monitor actively, and to which you have committed sufficient resources.
Profitable Networking
First, identify the type of business you want to attract, laying down criteria like size, sector and value, and listing established contacts that can offer suitable introductions. Individual directors and managers often have their own relationships with potential contacts and these need to be transferred to the company. In addition, look at organisations outside your known contacts, which could open up the right opportunities for your business.
You should also investigate established business networks in your area with member companies that match your criteria. Good networking organisations will have an emphasis on referring business and monitoring how effectively they are operating.
When looking at another company with which you could jointly refer business, it’s important to ensure it has a similar ‘energy’ to your own. For example, are you both in a similar growth phase? If so, there’ll be a momentum on both sides to build business together.
Forging the relationship
Start with an open meeting between both sides to discuss joint opportunities and benefits, and assess energy levels – and be honest about any fears. To build a successful distribution strategy (a programme of increased sales through referrals), you have to fully understand what fears exist – and there are usually some – and look at ways to alleviate them. No matter how good the benefits appear, unless you remove reasons for resistance, you are unlikely to progress very far.
The way forward is to engage in a series of open conversations to establish if you have the potential for a relationship; understand what reservations each party has and look to address them; agree written guidelines so both sides understand what is expected from the relationship and monitor and revisit the relationship on a quarterly basis, keeping a check on the value of new business that it brings.
