I had a question the other day that was too beautiful not to share. I need to start by saying I am a huge advocate for networking with a purpose, and truly believe that networking works. (fair warning)
As a big networker, I’ve been asked a few times when one should move on from a networking group. “How do I determine if this is still worth my while?” is the essence of the question.
There’s a short answer and a long answer here.
Short answer: You move on from a networking group when you are no longer seeing a positive ROI (return on investment). The ROI ratio or % should be greater than the time and dollar investment to be part of the group. The people in the group know it is not personal, you love them, but you have to do for your business first. If you are not benefiting staying in that group, don’t stay.
Every activity a company does to promote itself should be tracked and measured. There should be a return on investment (ROI) for every ad, website, marketing tool and networking group. If there isn’t, then what are you doing it for? And no, “someone told me to” is not the right answer here.
But there are different types of networking, so to really dig into this question we need to expound upon that.
Types of networking groups include but are not limited to:
Educational Seminars – events that usually cost money to attend and involve at least one key speaker who is presenting ideas that can help you better understand business, or your specific industry, to help you grow.
After Work Socials – events that happen before or after business hours with the intention of exchanging contact information with 2 or more people to discover if you can directly, or indirectly, do business with them. Often times these become more social than business driven.
Church – a social organization with people who share common views of the world around you. These people care deeply for each other and want to help their fellow man/woman with their life. This is a great place to meet business owners who can provide insight or who may be a good client for you. But this network takes a while to get into as they are a close family.
The Gym – this is a great place to meet people who share a passion for health. They go to the gym for the social experience and love meeting and knowing their gym mates. This may be a good place to meet referral partners or clients as well as you get to know your gym partners.
Referral Marketing – these are groups specifically designed with the intention of passing referrals to one another to help each other grow their business in dollars and cents.
Each one of these networking group types have key performance indicators (KPI’s) that can help you determine the ROI. The KPI’s are different for each of these groups, but the ROI is what really matters.
How do we calculate the ROI of a networking group?
Benefit or return/cost = ROI
So what did it cost you (time and money) to join the networking group? Even “free” networking has a cost. The time you spent there, fuel you expended to get there, and production time you potentially gave up to be there — these are costs that need to be considered.
More so of course if the networking group has a membership fee.
The benefit, or return, is the dollar value of the business you received from that group. As long as new business generated exceeds the costs of the networking it has positive ROI, but obviously, we want this ratio to be as high as possible. There’s only so much networking anyone can do in a given month. If you find your time uncomfortably limited and you network multiple times per week, you can use the ROI ratio to determine which types of networking are the most worthwhile for you in case you need to cut something out to free up time.
Obviously, for the educational seminars, there isn’t a direct return in $$ to your business to calculate. There is a return of personal growth and development, however, and that will translate into increased profit margin or revenue at the end of the year.
Does this help?
What other great questions do you have?