Enterpriser
July 2008

What is Networking?
By Mark Healy, P.Eng, MBA
Founding Partner, Torque Customer Strategy

Published in the Globe and Mail Update, April 17, 2008 this article is reprinted with permission from the author.

A good friend of mine just returned from four days in Vegas. He looks like hell. Pallid, haggard, broke. You get the picture. I asked him what he was doing there (stag party) — he said "networking".

Networking. Fewer terms are bandied about so frequently yet carry so many meanings. I dare you ask the next 10 business folks you run into to tell you what they think networking means. I bet you will hear something along the lines of:

• Taking clients to hockey games
• Joining a professional club or network group
• Working the cocktail party circuit
• Volunteering as a board member

For SMBs (small and medium sized businesses), networking is vital. Ask most SMB owners and they'll tell you that some large percentage of their business comes in through their network. However — this is the big but — if you dig, you'll find that most of the time, the business didn't come in 'cold' from the 'networking'. Someone made a phone call. Or sent an email. Someone who had already worked with that SMB. And probably not of their own accord — they were prompted. So was it really networking that landed the business? Yes, it was referral networking.

The business owners who are very good at drawing in new business via directed networking have two things in common:

1. They ask their current clients for referrals. Actively, not passively.
2. They have a top-notch (conscious or unconscious) referral networking strategy in place.

Which brings us to, as they say at the Cineplex, our feature presentation: the elements of a good referral networking strategy for SMBs.
We need a framework for the strategy discussion. How about: if your end goal is to ask a current client to refer you to a prospective client ("Hey Larry, could you call Sue and get the door open for me over there?), then all of the elements of the strategy should build toward being able to confidently make “The Ask”.

There are 5 elements to a solid referral networking strategy. Let's work backwards.

5. Fantastic Client Experience
4. Product / Service Quality
3. Experience and Credibility
2. Awareness and Relevance
1. Brand

Element 5: Fantastic Client Experience
A great client experience is the one piece of the puzzle you need to have solved before you call Larry to make “The Ask”. If Larry had a poor or even average experience with you, are you going to make the call? No. Larry had to have had a really positive client experience. Some basics of the client experience usually include:

• relationship building,
• client service, and
• a memorable differentiator.

Don't underestimate how important it is to be memorably different.  The bottom line is that if you don't have confidence in the client experience you are providing, this is the first thing to fix in your referral networking strategy.

Element 4: Product/Service Quality
You need to create an environment for fantastic client experiences before you can make the referral ask. Your product/service and its related quality comes before the client experience. It's difficult to imagine a scenario where your product/service sucks, or is even average, and yet clients come away willing to say very positive things about you— product/service quality is expected. If you deliver, then people will focus on the intangibles (like their great client experience), but if you don't, then the recommendation will always be made with an asterisk.

Many factors affect quality and only a few affect the perception of quality:

• pricing, leads to a judgment about value,
• purchase environment, whether a store, an office or a website — the details matter here, and
• guarantees/after-sales support. You have to get the check-mark here.

Element 3: Experience and Credibility
People can't give you the thumbs up on quality if they don't have an opportunity to buy/trial/otherwise experience your product or service in the first place. And the step in the client’s purchase criterion process that normally comes right before actually pulling the trigger is a check on your experience/credibility. "Have you catered an event this large before?" "Have you done any work in telecom before?" You can't cheat here. But you can put yourself in better light when it comes to experience and credibility.

Some of the most effective methods of communicating know-how are:

• awards + client lists and testimonials,
• partnerships with known/branded entities, and
• case studies, published articles/white papers, etc.

If you have weapons, don't hide them in the cellar. Pull them out and put them to work!

Element 2: Awareness and Relevance
One step removed from experience/credibility is awareness and relevance. If experience is judged just before purchase, then the client is already engaged in a decision process about you and is therefore aware of not only who you are but also what you do, and must think you are relevant to their current need. So how the heck do you create awareness of product/service and communicate relevance? With marketing basics:

• visibility in the marketing place- a well constructed website that clearly articulates the value proposition and covers the basics,
• targeted and effective marketing collateral, designed around your different client segments, and
• legitimate PR is most important for SMBs with traditionally lower brand equity..

It's more important to be accurately known to your target segments than widely known to all.

Element 1: Brand
Your prospective clients have to have heard of you before you can be known for what you are good at, and get the chance to prove your product/service is relevant. Getting known involves building a brand. Maybe not the Nike brand or the Lululemon brand, but a differentiated and clear brand. Building a good brand typically involves:

• a thorough understanding of client behaviours/needs/wants,
• sharp internal understanding of the brand promise: everyone must sing from the same sheet, and
• crystal clear and consistent messaging and manifestations of the brand promise.

Brand doesn't have to be whizbangy, it has to be real and it has to be reiterated a lot.

If you have done a reasonable job of building a brand, communicating awareness and relevance, demonstrating experience and credibility, ensuring high quality and creating a positive, memorable client experience — you are in great shape to ask your clients for referrals. And to tell people you get a lot of business from networking.

Mark Healy, P.Eng, MBA is a partner at Torque Customer Strategy. He has completed over fifty studies in this new space over the last four years. He is regularly quoted in the national media on topics ranging from client loyalty to managing professional service firms. Mark teaches" Customer Intimacy for Marketers" at the Canadian Marketing Association, and a "Demystifying Consulting" module at top Canadian business schools. His full bio can be found at www.torquecustomer
strategy.com. Luca Lorenzoni, a consultant at Torque, contributed to this article.

© 2008 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.