Is networking a substitute for selling?
Business networking groups such as BNI, BRX are geared up to help their members get new business. Business networking is where groups of like minded individuals meet with a goal to help each other out in business.
So is networking a substitute for selling? In today's cluttered market-place where buyers are usually unreceptive to selling advances, it looks like networking definitely has a place in today's selling landscape.
However the selling landscape is a complex one. There are millions of products and services on offer. There is a vast spectrum of products from commodity eg florists where the buyer is familiar with what is on offer through to complex industrial products such as bio-digesters where there are relatively few customers on the planet.
Non specialist business networking events are well suited to relatively low value commodity like purchases such as holidays, accountancy services, legal services etc. Firstly the general population are likely to be consumers of services associated with the members whereas it is unlikely that many will want to buy a bio-digester plant. Secondly networking members can provide referrals since their will recognise the opportunity and understand the offer enough to qualify the prospect in order to make the referral. End result is well qualified leads.
In general the level of selling sophistication for selling these types of services is not high – the buyer wants to buy but the question is whether the supplier is a perceived as a risk or not. The part of the sales cycle that business networking supports is matching the buyer's need for a service provider with an awareness of a “trusted” supplier of a service. Networking therefore replaces part of the early sales cycle but it doesn't eliminate the later stages of selling such as closing. The lead could come from a trusted relationship or recommendation so the buyer will perceive lower risk with the buying decision.
However in more complex sales, particularly in a business-to-business context, networking provides little more than a warm lead who is willing to explore – for the sales person this is a great alternative to cold calling. It does not however replace professional selling practices such as SPIN selling: understanding the customers need, what business value they place on satisfying the need and demonstrating how the need can be satisfied.
Given everyone is bombarded by selling messages, is networking going to become the de-facto lead generation machine? For commodity products, business networking should be a very cost effective alternative to cold-calling or advertising. Referrals from trusted sources whether face-to-face or through social networking sites are likely to increase in prominence in the coming years- word of mouth has been effective for millennia and networking is just a variant of it.
For complex industrial sales, non specialised networking events are likely to be a waste of time. Business is about relationships so there are few alternatives to that face-to-face touch. Just like marketing, the networking events need to be on target – often specialist conferences are the right forum but may not have the explicit and open structure of a network event to foster deal trading. Today there are relatively few specialist networking events. I am considering setting one up for high-tech/IT networking in the UK – if you would be interested in attending, ping me.
As it gets harder to get the buyer's attention, it is likely that there will be an increased proliferation of specialist networking organisations emerging to cater for the face-to-face need to build relationships and do the sale. Unlike the BNI like events, involvement with the specialist networking group may involve a long haul waiting for the right opportunity to emerge – how often do people want to buy a bio-digester after all?