There’s a very good reason why referral networking is becoming an accepted and important marketing strategy in businesses worldwide: it works.
Imagine being dropped off in a foreign city with nothing but a few hundred dollars and told that the only way to get home was to start a business and make a lot of money-in six days. Well, you don’t have to imagine it. Just watch the BBC television show The Last Millionaire.
In this reality show inspired by Donald Trump’s Apprentice on American television, 12 of the UK’s most successful young entrepreneurs pair off in a series of competitions. They are taken to cities around the world where-without their accustomed luxury, without the aid of their companies, colleagues, or friends, without access to their bank accounts, often without even knowing the local language, culture, or customs-they pair off in teams and are told to build a business from scratch. The team that makes the most money in a week gets to go home; the rest go on to compete in another city. After the last two teams face off, the last surviving pair are pitted against each other to win the honor of not being the Last Millionaire.
On one of their episodes, the final contenders, Natalie and Lucy, were flown to Hong Kong and lodged in a cheap hostel. They were each given the equivalent of a few hundred U.S. dollars and told to create a product and sell it in five days. They could recruit student helpers from a list they were both given, but otherwise they were left pretty much on their own.
Natalie called the student contacts for help. Lucy, however, went to an Internet café, pulled up Google, and typed business networking into the search engine. The first hit was BNI, the world’s largest business networking organization. Lucy called the president of one of Hong Kong’s chapters and wangled an invitation to visit their next meeting.
Minutes after giving the group a 30-second presentation on her business goals, she was networking with members and getting referrals for contacts that would design, produce, and sell her product-T-shirts. Among these referrals were the largest manufacturing agent in Asia and one of the top manufacturers in Hong Kong. A couple of days later, her new business was off to the races.
Want to know who won? Lucy, of course. Her earnings were 16 times her startup money, and more than four times what Natalie made.
Think of it: in a time when businesses worldwide are struggling, an ambitious person with good business sense can be dropped into a foreign city and-with a little help from some business networkers-build a profitable business in less than a week. To people who are not familiar with the power of networking, that is astounding! There’s not a more vivid testament to the power of referral networking-at least, not on television.
Networkers know. As I work my way across continents and oceans giving presentations and conducting seminars to spread the word about the power of relationship networking, I am constantly greeted by audiences of enthusiastic businesspeople eager to supercharge their enterprises by becoming networking professionals. But at the same time, and in the same settings, we are often bombarded with questions that reveal how much myth and misinformation there is around networking as a marketing tool: Is referral networking truly effective, or is it just a way to pick up the occasional new client? Can it be considered a legitimate business strategy? Aren’t direct mail, billboards, even Yellow Pages ads more important?
The truth is that referral networking is becoming an accepted and important marketing strategy in businesses worldwide. Obviously, there’s a very good reason for this: it works. It’s a cost-effective way to get in front of a bunch of new clients, and it’s a much better way to keep a business prospering over the long term, because it’s built on mutually beneficial relationships between you and your fellow business owners. It’s powered by the oldest and most enduring principle of human society: Givers Gain®, the idea that the good you do will eventually come back to you in one form or another.
About the Author:
Called the father of modern networking by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the world’s largest business networking organization. His newest book, Networking Like a Pro, can be viewed at www.IvanMisner.com. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company.