RSS feedsFew firms take a strategic approach to developing their network of contacts into a fruitful source of revenue, but it can be done.
The first step is to identify the type of business your practice wants to attract. To do this, formally set out the criteria you want such as size, sector and value and list contacts who can offer suitable introductions. Also look outside your known contacts for companies that could open up the right opportunities.
As well as setting up your own, investigate existing networks to see if they have member companies matching your criteria. Remember, good networks have an emphasis on referring business and monitor how effectively the organisation operates.
In an effective networking programme, the relationship and benefits between the organisations are clearly understood. So when looking at potential businesses ensure there is a match in ‘energy’.
Are you both in a similar growth phase? If so, there will be a momentum on both sides to build business together. But if one party is consolidating after growth, the ‘high’ energy will be one-sided and the relationship will probably stagnate.
Energy boost
The starting point for a successful distribution strategy a programme of
increased sales through referrals is an open meeting to discuss joint
opportunities and benefits, assess energy levels and air any fears.
There are always fears and doubts that can jeopardise successful
distribution. Even internally a partner who has a relationship with a solicitor may be reluctant to recommend another division. Perhaps they have issues about consistency of a high-quality service, or simply fear losing control of the relationship.
Facilitate a series of conversations to bring out the fears. Once these have been articulated you can find solutions.
We recently worked with a firm of City accountants, where each division closely guarded their clients, who often went to other firms for additional services. By understanding why partners were not cross-referring, and installing a strategy to encourage referrals, the firm increased fees by several million pounds.
It’s the same process for external organisations:
- Have open conversations to establish if you have the potential for a relationship;
- Understand what reservations each party has and look to address them;
- Agree written guidelines, so both sides understand what is expected;
- Monitor and revisit the relationship on a quarterly basis; and
- Check on the value of new business coming in from the relationship.
Networking is one of the most cost-efficient means of acquiring quality clients, but it’s a process that needs to be resourced properly and managed at an executive level to be successful.
Close connection
- Formally set down the criteria for what constitutes a profitable client.
- Centralise the contacts residing with individual partners and manage the fears they may have about sharing contacts.
- Investigate established business networks that have an established structure of generating referrals.
- Explore which organisations might offer mutually beneficial relationships and check you have similar ‘energy’ levels.
- Formalise guidelines on working together.
- Devise a plan for a successful network and assign suitable resource.
- Set targets and monitor progress.
- Review relationship in terms of profitability. If it isn’t providing
business for both parties, it’s not worth wasting resources on it.
Glyn Heald is CEO of business coaching organisation Shirlaws UK
