Boutique Consulting Club - On Networking

Hello there, this is Danilo. Three partners asked me to talk about networking, so we picked it as today's topic.

The size and quality of the partners' existing network play a huge role on the success of your business development efforts, especially for solo and micro consultancies. That doesn't mean one should not prioritize digital marketing. Due to the nature of what we're selling, your most important marketing job (be it online or not) is to build and nurture the right relationships.

Wish you a great reading.

Estimated read time: 8 minutes.

Before we talk about networking, let's start with networks. They matter since the biggest source of new consulting businesses is referrals. Neglecting yours will greatly affect your lead flow and business development efforts.

The size of a rainmaker's network depends on the nature of his/her practice, personal preferences, and age. A social person who consults in the recruiting industry, for example, might have + 2,000 in his network. Some partners claim they have less than 100 people in their network, but from my experience they always underestimate the number of people they know.

If you want to have a network of relationships that will ensure you a decent lead flow, it's reasonable to assume you will need to have 200 to 300 people in it.

Of course, they need to be the right people.

Most consultants, especially the younger ones, need to make an effort to add more people to their networks to have a reasonable chance of finding opportunities to make introductions and ask for referrals. After a while, they start to filter and focus activity around the most important ones. Seasoned partners know that 80% of the opportunities will come from 20% of their network.

Every personal network is built over a career. It's slow work. You can speed up the process by joining an organization (formal networking group, trade association, community), as most rainmakers do.

The "quality" of your network can be measured by different criteria, including:

• Purchasing power: A network with a high percentage of people who can hire you is better than one composed of no-authority employees, or people that do not fit your ideal client profile.
• Access and influence: The so-called "centers of influence", or people who can direct more opportunities to you, are also valuable relationships. They are especially important for those of you who sell consulting services that are rarely needed (bankruptcy specialists), or who target smaller organizations. A partner of an accounting firm that sells for SMBs, for example, said he doesn't network with prospects. Instead, he focuses on bankers and financial advisors who can refer clients that are dissatisfied with their accountants.
• Affinity and dissonance: There's a balance required here. When your network includes people from similar industries, interests, function, or geography, it gets easier to make introductions and nurture relationships. But you must consciously design it. We all have a tendency to engage the most with people who look like us and are closer to us. Without a system to steer our attention to the right people, your network will deteriorate.

Now, how do you do this? How do you network?

The best description I've found is the one by Ford Harding, the rainmaking pro:

"The underlying logic of networking is simple and the same for all networks: Identify the right people to know. Find ways to meet them. Stay in front of them by being helpful. Remind them of what you do in low-key ways. When appropriate, ask for favors, such as introductions. Leads for new business will follow."

How this logic applies to you depends on your context. For most consultants, there is a (formal or informal) well-established network in place - in these cases, the challenge is to break in. In some fields, however, there's no network (or a very messy one) and your challenge will be to create and solidify one.

On the competition for relationships with senior executives:

"There is often an imbalance in power between a professional and an executive that makes networking difficult. Networking is based on mutual help. It's obvious what the exec can do for you, but what can you do for the exec, over and above selling him your services? Often a senior executive has far more people reporting up to him, often heading up an organization with thousands of employees; most professionals have but a handful of people reporting to them. And the executive is much wealthier. This imbalance can make the prospect of approaching an executive intimidating."

Source: Ford Harding, "Rain Making"

When consulting buyers are asked how they research solutions for work-related topics, more people ask their peers and colleagues for a recommendation than do a general online search.

Source: Lee Frederiksen, "Inside the Buyer's Brain"

What needs to happen for you to start prioritizing your existing relationships?

The most successful consultants I know have frantically "systemized" their existing networks and relationships.

You probably frowned as you read the word systemized. People picture themselves as robots, whose goal is to turn all of their relationships into transactions. But this couldn't be further from the truth.

A system doesn't need to be cold and automated. What we want from one is simply to increase efficiency, clarity, consistency, and control. It turns out that a systemized network is easier to be nurtured, and doing that leads to deeper and healthier relationships.

When done right it has virtually no downside, and it works:

• You have an updated database of current and previous clients, prospects, collaborators, friends, and centers of influence in your space.
• You can quickly find and activate this network to cross-introduce contacts, invite them to join your trust-building initiatives, and explore opportunities.
• You consistently stay top-of-mind by sharing your unique content, the latest trends and insights in their space, and learnings from recent projects.

But if you're like most consultants out there, you don't do any of these.

When things get busy we tend to focus on delivery and end up neglecting relationships. Contacts that are an important source of joy and business don't hear from us for months. We stop meeting new interesting people, and our energy level drops.

As always, this is a consequence of our self-centered behavior. When we put ourselves first, we don't see how directing our energy and attention to those we know also benefit us in the future.

Take some time to review your priorities. Put relationships first. Profit and enjoyment will follow.