The traditional view of networking is to go to a meeting with lots of other professionals to see if anyone might be interested in doing business with you. Of course, in a world where most of us are tired of being sold to, this "me me me" approach is less and less effective... leading to the recent "pay it forward" form of networking, where you first try to help out every stranger/professional you meet, in the hopes that karma (and social reciprocity) will result in clients coming back your direction soon enough.
In this guest post, Derek Coburn lays out his vision of "Networking 3.0" where it's not about selling yourself, or doing someone else a favor first so they'll feel morally obligated to sell on your behalf in return, and instead is about trying to understand the business needs of your current clients and who they need referred to them in order to become more successful themselves.
After all, the reality is that for many clients, giving them new clients for their business will improve their financial situation more than any portfolio recommendation could have possibly achieved anyway. And clients who have had that much financial success in their own businesses - thanks to your referrals - will not only become "stickier" than ever and more likely to retain, but will also become your advocate for future referrals.
But the key shift is that if the goal is to help your clients' businesses first, then the fundamental purpose of networking is not to find clients yourself, nor to find strangers to do favors for in the hopes that they'll want to get to know you better and refer you, but instead to find opportunities to refer your existing clients some new business opportunities, in a manner that creates truly satisfied clients... and maybe even engenders a new and better relationship with the person whose problem you just solved as well!
Networking is like dating, and trying to find your ideal clients or partners at a large networking event is like trying to find your “soul mate” in a nightclub. If you’re looking to meet someone nice who might be suitable for a committed relationship, you wouldn’t waste your time in a crowded place that is so loud you can’t even hear yourself think? Plus, everyone there has a different motivation. It’s common sense. Everyone gets that!
But we don’t think like that when it comes to networking. Like nightclubs, people attend traditional networking events for very different reasons. Everyone in the room is focused on his or her own personal agenda, whether it’s signing up a new client, creating awareness for their business, or connecting with someone in the hopes of developing a mutually beneficial relationship. It’s an “every man/woman for themselves” kind of game, and since everyone is playing a slightly different game, there are usually no clear winners.
The best dating books suggest you leverage your friendships and expose yourself to environments that are more conducive to finding a compatible mate. Get personal introductions from friends, host dinner parties, let the people who know you best set you up. Dating for love is not a volume business. Networking for long-term clients is the exact same way. Or at least it should be.
Unfortunately, all of the networking books and articles I have read focus their advice on how to make the most out of networking by attending events. It’s as if there is only one game to play, and the key is to play that game a certain way. Namely, A LOT. The ritual of the large networking event and the shared motivations of its players is firmly entrenched. But the truth is you don’t actually have to play their game at all.
If you were making more money than you ever imagined, while working with a client base you absolutely loved, and had more high-quality prospects looking to hire you than you had time for, how often would you go to networking events?
I am guessing your answer would be, “Hardly ever,” or “Only if I had to.”
Growing a successful business leaves little time for networking. As the quality of your clients and the value of your business increase, so too will the value of your time. Before long, you will find yourself jealously guarding that time not just for yourself, but for the clients and the business you have taken such great pains to develop. It’s only natural that you will be less likely to subject yourself to large, cattle-call networking events.
It is for these very reasons that you will rarely find your ideal professional mate at a networking event.
If you’re anything like me, you’ve spent many an evening at networking events trying to shake off the onslaught of what I call “ professional one-night standers.” They are just starting out or have flailing, mediocre businesses. They look for anyone who might be able to help (or save) them, for quick fixes, short-term remedies, and stop-gap measures. They aren’t worried (yet) about cultivating long-term relationships, so fittingly they have the most time to spare on networking.
At one particular event, a guy came up to me and introduced himself. He breezed through his introduction, then proceeded to talk about himself for no fewer than four straight minutes. One minute into his spiel, it was obvious I was being pitched to, so I checked out. This Mr. Me-Me-Me wrapped up by giving me his card and then walked away.
Networking intended to directly benefit yourself is what I call Networking 1.0. And I’m sorry to be the one to break the bad news and burst the networking bubble, but the fact remains that professionals trying to get something out of you, whose product or service is too unremarkable to yield new clients in a more efficient manner, represent the majority of attendees at networking events.
Regular attendees are almost always one-night standers. The people you really want to meet are busy making better use of their time. This dichotomy is what makes most of us dread showing up to events.
Networking 2.0: Too Good To Be True?
Of late, a more evolved form of networking – let’s call it Networking 2.0 – has arisen from a bevy of advice books. They tell us to focus not on what other people at networking events can do for us, but what we can do for them.
I am all for this shift in focus, in theory. I love connecting people. And plenty of professionals with good intentions still go to networking events, so it could absolutely work.
Here’s the problem though: much of the Networking 1.0 crowd (Mr. Me-Me-Me, for instance) read these books and realized that if they put forth even the minimum amount of effort, other professionals would feel obligated to reciprocate for them.
Almost immediately, the new philosophy that could have saved networking events made them more difficult. Now, if I’m at a networking event and someone wants to learn more about me and figure out how they can help me, all it does is set off my b.s. detector. My first thought is “What’s the catch?” They could be sincere, I know, but it’s more likely they’re taking this tack because they read about it in a book. I’m sure many of you have discovered this for yourselves: those people asking how they can help you right off the bat are not interested in helping you; they’re interested in making you feel compelled to help them.
I learned this lesson the hard way. As someone who initially embraced the Networking 2.0 approach, I was all for indiscriminately “paying it forward.” I would help anyone I encountered. A reference, an email address, advice, a tip, it didn’t really matter what they needed, because it was all going to come back around to me in the end, like business karma. And boy did it ever.
I once introduced a new acquaintance from an event to a very good client of mine. This new connection appeared to be a good guy with a good business, so making the introduction seemed likely to create potential synergy. I connected them via email with a nice, complimentary note, and let them take it from there.
The day after their first meeting, my client called. My new acquaintance had pitched him within the first 20 minutes. It was horrible, and his pitch was worse. Although my client called to warn me more than anything, I’m sure he was questioning my judgment. Fortunately their encounter didn’t ruin my existing business relationship, but lesson learned: Never put your reputation on the line with clients by introducing them to people you don’t know much about.
Think about it: Why should you go out of our way to advance the business interests of someone you just met, when it means involving someone whose business interests you are already being paid to protect and advance? It is a recipe for disaster.
My Networking Epiphany
One of my clients is a landscaper - let’s call him Andrew. Andrew got a call from one of his own high-end landscaping clients, asking him to meet with a financial advisor he knows. “This guy is great,” Andrew’s client said. “We know you have Derek and you like him, but you have to meet this guy. It would be a huge favor to me, regardless of whether anything comes of it.”
Andrew told me about the conversation and said I had nothing to worry about. Then he asked if I could give him the information on his accounts to share with the other advisor. I wasn’t particularly excited about it, but I was confident in our relationship and the advice we had provided.
After his meeting, Andrew called to share what went down. The financial advisor thought he made a good, logical argument for why he could do what I did – only better. He outlined how Andrew could have earned 3% more in his portfolio over the past two years, had Andrew invested with him instead of me. So, I lost a client, right? Not even close.
Andrew came back with this: “Derek has referred me two clients that have generated over $2 million in revenue for my business in the past two years. So in theory, he could have lost half the money in my portfolio, and from a net worth perspective, I would still have been better off working with him.”
Driving the point home, he told the financial advisor, “Hypothetically, even if you would have been better than him at managing my investments, why would I leave a relationship with someone who is doing a great job and referring me clients for my own business?”
Right there on the phone I had a moment of clarity: I was already adding value to my clients’ portfolios, and their businesses. How much more value could I create if I actually made it a priority by weaving it into my suite of services?
At that moment, I realized I was on to something. I needed to enhance my efforts to make my clients and their businesses an even greater focal point of my business and networking efforts. This new approach would prove to be more powerful than I ever imagined.
A Mindset Shift
So why was I networking? It started with the genuine desire to build my client base and generate more business. When I began using my connections to benefit my clients, with the intention of becoming more of a resource than a vendor or a service provider, I discovered I could accomplish those things in a more meaningful and lasting way. I would now network in order to provide solutions and add more value for my existing clients.
I continued going to networking events, only now I wasn’t thinking about myself or how my financial services could directly (or indirectly) help the people I was meeting. My main focus shifted to learning about their issues and finding a solution – one that could leverage the considerable resources of the clients, partners and other people in my existing network, and benefit everyone involved.
When I met someone at an event and introduced myself as a financial advisor, the typical response was “Oh....uh... I don’t need a financial advisor right now because...” a) I already have a financial advisor; b) Insert any lame excuse/change of subject technique; or c) I’m saving my money to buy a new house right now.
That last option was gold, assuming they were being honest and weren’t just trying to blow me off. Knowing they were in the market for a new home, I would respond with “I have a great real estate agent I can recommend,” which gave me the opportunity to add value in several ways:
- I can create an introduction for a strategic partner of mine. In this case, a trusted real estate agent. This introduction could amount to something for him.
- When I refer someone to a good real estate agent who ends up taking care of him, I become a resource. If they end up buying their dream house, I helped make that happen.
- Taking a longer view, the sooner they can buy the house, the sooner they’ll be in a place to start investing their money – hopefully with me, since I helped pave the way into that house.
Focusing on yourself (Networking 1.0), or claiming you’re there to help the person you’ve just met by providing whatever product or service you have to offer (Networking 2.0) are both likely to put people on their guard. However, with Networking 3.0, most people are receptive to sharing their challenges and are open to helpful suggestions. This approach proves much more effective.
I knew I was onto something, but I wasn’t quite there yet. For one thing, I was only half of the equation. Most people at large networking events were focused only on pitching their products and services. They were not looking for help, so my solution-oriented strategy wasn’t working; it wasn’t even getting off the ground. It wasn’t my approach that was the problem, it was the networking events themselves. Instead of continuing to attend networking events to meet new people, I started to look at my network to see how I could apply these principles and deepen my already existing relationships.
How To Do Networking 3.0
These days, most of us are in a commodity business, whether we like it or not. It takes more to stand out in this hyper-connected world than simply declaring yourself a standout. You have to actually do something to differentiate yourself, and you need to do it in a meaningful way. There is no better way to set yourself apart than to refer clients to your clients and facilitate these valuable connections.
This is especially true of financial advisors, as we are often specifically hired to increase the net worth of our clients. Most of us only focus on how we can do this by way of their portfolio construction, tax strategies, etc. What better way to do this than by helping our clients generate revenue for their business by way of our introductions?
Of course I still needed to keep exceeding expectations as a financial advisor (you know, do my job), but I realized that by doing something valuable for clients, I could effectively eliminate my competition. Actively helping clients grow their bottom line is the Ultimate Tiebreaker.
Becoming the Ultimate Tiebreaker
While I obviously knew what my clients did for a living, I did not necessarily know how to identify resources, opportunities or connections for all of them. The business card does not tell a business’s full story. And it goes both ways: most of us take for granted how well our clients and advocates understand our business.
In reality, most people do not specifically know who can solve the challenges they have, or provide what they need. Here’s an example: My personal trainer didn’t know a lot about my professional life. He was more concerned with making sure I got the right amount of cardio and strength training. However, his worldview was similar to mine; he was always trying to be helpful. He wanted to know how he could identify someone who might be in need of a good financial advisor – basically, how he could be a better connector for me, add more value, and deliver the Ultimate Tiebreaker himself.
Most of us would not think to ask our personal trainer – or most anyone for that matter – if he or she knows a good financial advisor. However, personal trainers have intimate conversations with their clients every day and many of them share a lot about their personal and professional lives. I could have just asked him to let me know if anyone mentioned they were looking for a good financial advisor.
But that’s very reductive, very transactional. So that’s not what I did, and it’s not what you should do either.
John Jantsch said it best in The Referral Engine, “Referrals happen most naturally when two people are talking and one of the parties expresses their current pain in the neck.” He goes on to suggest, “The best way to make it easy for people to refer business your way is to develop a list of 'trigger' phrases that experience tells you are the exact words your prospects utter when they need what you’ve got.”
Rather than taking a passive approach and waiting for network referrals to come my way, I realized I could be more proactive by making clients and friends aware of the different life and business circumstances where my services might be needed. What’s more, I could do the same for them.
In order for him to make quality introductions to me, I didn’t need my personal trainer to know all the ins and outs of my business. I needed him to know what my prospective clients were struggling with. I needed him to be able to spot the clues that this person sweating out crunches in front of him would be a perfect introduction for Derek Coburn.
The most effective way to tease this information out was to share my trigger phrases and events. These are typically not directly related with what I provide, but I am usually able to provide a solution in these situations.
An example of a trigger phrase for me is “I have been managing my own money and don’t have time to keep up with it.” My list of triggering events for financial advisors includes things like buying a home, having a child, or concern about the health or finances of aging parents.
Once he was aware of my triggers, he was able to identify opportunities to refer great prospective clients. And he did – two of them, in fact. This is precisely the kind of value that Andrew the Landscaper appreciated when he chose to stick with me after meeting with the other advisor at the behest of one of his big landscaping clients.
Do you think I would ever hire another trainer after that? Of course not.
Identifying Your Clients’ Triggers
This is who you want to be for your clients. To get there, you need to find out what their trigger phrases and triggering events are. The purpose of these initial conversations is to learn more about your clients’ businesses and to figure out the various ways you can add value for them.
The next step is to reach out to set up interviews with your clients to share your plan. When I told my clients I wanted to contribute as an extra member of their business development team, they loved the idea. It was a can’t-lose proposition for them.
To kick off the interview, I shared my vision regarding The Ultimate Tiebreaker. I then asked how I could better recognize a client or an opportunity for them. This part took some time because I wasn’t familiar with their industry. They needed to explain it to me in terms I could easily understand and act on.
When I had this conversation with my clients, most of them had not thought much about how someone else could identify opportunities for them. Often they could not articulate what distinguished their business from their competitors – or what their ideal client looked like – to someone outside of their industry.
Going through this exercise with your clients will make you look like a hero. Even if nothing else comes out of the meeting, you’ve unlocked deeper understanding and better communication.
Here are some questions you can start with to get greater clarification:
- What is the role of the person who typically hires you?
- Where and with whom do they typically spend their time?
- What problem(s) are they primarily looking to solve that you can help with?
- What is the size (employees and/or revenue) of your ideal client?
- What are some of their trigger phrases and triggering events?
This should get you started, but you can feel free to expand and add more to the list. Not only will this information put you in a better position to identify clients for your clients, they’ll also learn a lot about their messaging. Through your questions and input, they’ll realize they could be much more effective at communicating their value proposition, who they are, and what they are looking for. And they will love you for it!
Having these conversations with my clients made them feel even better about having me in their corner. It also felt great personally. Focusing on how you can help some of your best clients was, and remains, an incredibly rewarding experience.
There are some rules to keep in mind if you want to use the Ultimate Tiebreaker. Keep in mind:
- If you do not already do great work and deliver a valuable service for your client, adding this new kind of benefit will not matter.
- Do not make this kind of promise to a client (or prospect) unless you truly believe you can deliver.
- It’s fine to have clients who are not elite in their fields; just don’t set this kind of expectation for them. I recommend Andrew because he is my client, but more importantly, because he is awesome and does amazing work.
- You won’t always be in a position to introduce someone to their ideal client. If you meet someone who only works with Fortune 100 companies and you don’t have any relationships in that space, it would be inauthentic to suggest you can add this type of value.
After taking your clients through this process, invariably they will want to know more about your triggering events. This is yet another reason it’s so important to clarify your triggering events prior to these conversations. Ian Altman of Grow My Revenue says it best, “Don’t tell people what you do, tell them what problems you solve.” Even if you are providing a compelling service that separates you from the pack – the essence of The Ultimate Tiebreaker – a conversation with a prospective client can only take place when they are at least somewhat interested in what you provide.
By having these conversations, you will significantly increase your pool of interested parties by sharing your triggering events with clients and your network. In doing so, you will also be in a much better position to help your clients do the same.
Become The Ultimate Connector When Networking
I knew the Ultimate Tiebreaker strategies were sound, but I wanted to take it one step further and create my own networking experiences. Hosting events is a great way to add value for your existing network. They’re also a great way to meet and develop relationships with prospective clients, because they trigger reciprocity. By doing so, I became the Ultimate Connector.
For instance, several years ago I started hosting wine tasting events on a quarterly basis. During the first year, I generated close to $150,000 of revenue from individuals I met for the first time when they attended one of these tastings. There is no reason you can’t do the same.
While I knew these gatherings could be a good way for me to meet new people, my primary reason for setting them up was to do something for my existing clients I knew they would enjoy. That’s the key: I looked at the wine tastings as client appreciation, not marketing, even though they were clearly doing double duty.
I would reserve a private room at an outstanding restaurant. I would serve incredible wine and food. And I would make sure everyone there got introduced to one another. I also asked my clients and strategic partners to bring someone they thought would be good for me to meet. The only requirement: they have to enjoy great wine. I assured them there would be no sales pitch. You don’t have to sell, because your clients will do the selling for you!
I did, however – and this is important – give a brief talk (10-15 minutes) on a relevant financial topic. There are three reasons for doing this:
1) Taking center stage allows everyone to put a face to the name of the person who organized the event.
2) It’s an opportunity to provide valuable advice for my clients and their guests.
3) It’s an opportunity to demonstrate my expertise. This model can work regardless of the industry you’re in.
Bear in mind, most of the folks who are invited by your clients will not be there because they want to hire you. In my experience, the majority of them are almost always perfectly happy with their current financial advisors. That is, until I shared some information or a strategy that resonated with them. Then they wondered why their current advisor had not shared this with them...and why their current advisor had never invited them to a wine tasting.
For me, it became commonplace for at least 50% of my non-clients at these events to reach out in order to learn more about my firm and see if I could help them. Remember, if this does not happen, your event will still be a successful one. Even if you don’t end up with a single new client, your existing clients will have had a nice night out, met some cool new people, and shared the experience with the person they invited – all thanks to you.
Networking, whether online or off, can be a great way to grow your business and add value to your network. The problems come from how you do it. You must have a defined approach. By now, I’ve hosted over 500 events with my clients and their guests. I’ve learned you don’t have to rely on the randomness of large networking events; you just have to use that time to curate a gathering that will effectively deepen your existing relationships and position you to meet more ideal clients.
These strategies are all included in a course I teach called Networking 3.0. If you found value in what I shared above, I invite you to try a few more strategies! I've assembled a free 3-part video series dedicated to helping you build a valuable network without going to traditional networking events.
Michael’s Note: If you're interested in learning more about Derek's "Networking 3.0" concept, check out his "Networking Is Not Working" book (which I've recently bought and downloaded for my own Kindle as well!).
In addition, you may want to check out the new webinar training program Derek is rolling out for his Networking 3.0 approach as well!