What’s Networking Worth to You? ROI Explored.
In talking to solopreneurs and microbusiness owners, I’ve heard many approaches to networking. Some people don’t like to spend money on it. Some think it’s a waste of time. Others understand and believe in networking as a valuable concept, but find the actual activity (or existing options) to be poor investments. Many have had mixed experiences with membership-based leads groups, but I’ve heard from a few raving fans. Some resent the pressure of “putting on a show” or projecting someone else’s (limited) idea of professionalism at networking events–and feel this is a major “expense.” What is networking really worth?
Exploring Networking ROI
Let’s look at the hard costs of networking first. In Phoenix, there are so many opportunities for networking events. THE place to go for event listings is NetworkingPhoenix.com. Here, you’ll find the most common event registration fees are $10-20, with the highest fee at $79. The average cost for a networking event comes to $39.50. We may also factor in gas, dry cleaning (if your idea of professionalism requires it), and, depending on the venue – food and drink. The value of your time (opportunity cost) may also be added.
Now we might have an estimated cost of investment to plug into the traditional ROI formula:
Gain from investment -Cost of investment
Cost of investment
GAIN is the hard part. Especially since traditionally this might be measured in volume–of business cards, interactions, meetings set, etc. But does that really represent GAIN? What we might measure instead is the depth of the relationships formed.
But how do we put a value on the relationships we hope to create (or have initiated) at these events? This relationship value seems difficult to measure in traditional business terms for a number of reasons.
Mainly, business deals or referrals don’t (always) happen automatically. So what kind of time frame do we allow for measurement? It’s not like email marketing, for example, in which you know the results quickly and there’s a window for measuring success. Specifically, in the first two days after an email is sent, 85% of open rates have occurred (Alchemy Worx).
But, how do we factor time into this networking equation – particularly when someone we met long ago has now said yes to our services or introduced us to someone who has? Time is a tricky variable that makes measuring ROI difficult and even more so, when cultivating authentic networking relationships.
Does it come down to well-designed processes for systematic lead-tracking? There’s a good reason that the “R” in CRM stands for “relationship.” We may be inputting data about the source of a contact or prospect, the time we spend going to the events, then looking at the overall data to make decisions on where to network based on those success levels. My guess is, it’s hit or miss. We’re asking, as Jack Johnson does, “Where’d all the good people go?” Or, rather, where are they going? (Why I started the Certified Authentic Networker program, actually.)
To further complicate matters, there also are no overarching stats for networking success in terms of ROI. In contrast, email marketing results are far easier to calculate. According to EmailExpert, for every $1 spent on email marketing, the average return on investment is $44.25. We don’t have that kind of benchmark for networking as far as I know.
Returning to that “opportunity cost” for a moment . . . Maybe our time is less of a factor when we know we’ve found that unique source or group of professionals for authentic relationships. We become more willing to put the time in because authentic relationships provide more than just lead sources and dollar returns, things that can’t be measured with numbers and data. Or at least not right away.
The Value of Authentic Networking
Authentic networking and the relationships that are born from it cultivate a sense of caring. We can’t measure caring, but only discern if our brand is inspiring it in others or not. We can feel when we care about someone else and want to help them–which is a measure of their brand success. In the best cases, the caring is mutual. When this happens, no one is keeping score about who helped whom last – there is a natural flow of reciprocity without expectations.
Given that the goal of many marketing efforts is to stay top of mind, and in many cases, it’s a challenging and costly undertaking, authentic networking provides value that can’t be measured. In an authentic networking situation, you are not viewed and remembered just as a lead source but as a helpful, whole person. It means everyone bringing all their authentic selves, skills and knowledge to the table, while being accepted and valued for it. That’s truly priceless.
Where can you ensure this level of networking? I obsessed over this question. Then I started the Certified Authentic Networker program. I wanted to create a place for this to be the norm vs. the exception. So we could get to “CARE” faster, with the common understanding that caring is a powerful, alternative fuel for our business.
Are you ready to fuel your business? Join us!
What are your thoughts on the subject? Join the conversation and comment below.