Announcement: SOA releases October 2019 Exam STAM passing candidate numbers.

Answers from The Independent Consultant

Answers from "The Independent Consultant"

by David C. Miller FSA, MSCC

We asked business coach and actuary Dave Miller to tackle the following question heard commonly from entrepreneurial actuaries:

Dear Independent Consultant: "Everyone says that networking and referrals are among the best strategies to grow your business, but it never seems to work for me. I don't know how to best start the conversation or keep it going. Even when I get a good dialogue going, it never seems to lead anywhere. Are there any strategies for getting good results with networking?"

- Frustrated Networker

Dear Frustrated,
First, let me confirm that networking and referrals ARE two of the best business building strategies you can employ. Yet your frustration is commonplace among business owners and consultants. This frustration comes from the fact that most people don't have a clearly defined process to execute a networking/referral strategy effectively.

Here are 12 steps to implement a networking/referral strategy that gets results:

Step #1: Understand What Networking Is and What It Is Not

Networking is not about attending every business card exchange, leads group or chamber of commerce committee in town. It's not about giving out as many business cards as possible. It's not about making sure you give your elevator speech to everyone in the room. And it's certainly not about trying to sell your services to someone you've just met!

Networking is all about developing mutually beneficial relationships.

Step #2: Understand Some Basic Principles about Networking

Here are some key principles that you must understand to be a successful networker:

  1. Every person knows 250 people on average. Remember this the next time the little voice in your head is saying, "I don't know many people." Brainstorm a list of everyone you know – you'll be surprised how big the list is. Even better, each person on your list knows 250 people! Just think, every time you meet a new person, you have an opportunity to increase your sphere of influence by another 250 people!
  2. Every person is either a potential client or a referral source. Principle #1 comes into play here. We tend to eliminate people after talking to them for 10 seconds if they don't fit the profile of our ideal prospect. We think, "I better cut this conversation short and move on; this person doesn't need what I'm selling." What we often forget is that this person knows 250 people. For example, their best friend may be the CEO of a company that is a perfect picture of your ideal client. Instead of dismissing this person, you can cultivate a relationship and have a warm (or even hot) lead to a great prospect. Remember, every person you meet is a potential prospect, a referral source or both. You must invest enough time to find out.
  3. Networking is all about "giving to get." One of the biggest turnoffs at networking functions is people that are solely there to build their own businesses. Don't get me wrong – that's a reason we're all there! I'm talking about the person who is eager to talk to you about what they do and explore how you can help them, but they never even inquire about what you do and how they may reciprocate. The most successful networking relationships are mutual. By focusing on how you can help others, people will be drawn to you and want to reciprocate. In my experience, nothing generates a person's desire to refer people to you more than when you give them a referral!

Step #3: Set Yourself Up To Win with a Powerful Psychology and Strategy

Ok – so you're ready to go to a networking event – some kind of card exchange or mixer perhaps. How do you prepare? You want to set yourself up to win. Many people I coach hate networking because they hate selling to people they've just met. I don't blame them for feeling this way – I wouldn't want to do that either. Guess what? Most people don't like to be "sold to" by people they've just met! So let's come up with another goal.

Set up a goal to make a connection with five people. Not 20 or 30 – but five. We're focusing on quality over quantity. Remember, you're looking to form mutually beneficial partnerships – not to have a lot of one-minute conversations. Rather than looking for opportunities to sell, you want to approach the event with a curious mindset: How can I help someone at this event tonight? What interesting people will I meet? Go with the goal of making friends rather than selling your business. What will happen is that you won't feel the pressure that comes with trying to "sell cold", you'll enjoy yourself much more and do a superior job networking.

The next steps will help you "make friends" at the networking event:

Step #4: Introduce Yourself and Quickly Make It About Them

When you get to the event, take your time and survey the room. Don't feel like you have to immediately rush to find someone to talk to (as an aside, you may find someone will come up to you!). After a minute or two of survey, approach someone. I often approach a person who is standing by themselves – they'll appreciate it and you may be making a friend for life.

Introduce yourself (just your name) and ask them their name. Then you want to make it quickly about them by proceeding to Step #5. Why? Because you want to focus on their favorite topic – them.

Step #5: "What do you do?"

It's amazing what having a handful of good questions will do for your interaction! You're "priming the pump" for a conversation. A few questions are all it takes to bring a conversation to life.

This question is totally appropriate and expected and you really want to know this anyway. At this point, they may ask you what you do. Let them know, but keep it short and low-key for now. You want to keep the focus on them - that's what they are most interested in anyway.

Step #6: "How did you get started in your business?"

This question elicits a person for their story. People love to talk about themselves and their story - it makes them feel good when you're interested in them. This question is probably rarely asked of them so they will be enthusiastic about answering it.

Step #7: "What do you enjoy most about what you do?"

This is a very upbeat question and will result in positive feelings as they answer it. They will associate these positive feelings with you. Unlike sales, where you're trying to identify the "pain" the prospect has, you want to do the opposite in networking. You want them to feel good about themselves and what they do while they are talking with you.

Next, you want to ask this "killer' question:

Step #8: "How can I know someone I'm talking to would be a good prospect for you?"

By asking this question you're doing a couple of things. First, you're distinguishing yourself from most people at the function who are asking (either explicitly or implicitly), "Can you help me?" and handing each person 10 of their business cards. Instead, you're making a powerful statement: "I want to invest in you and your business. I want to know how I can help you."

Second, you're asking for this person for specific guidance on how to bring them new business. This will make an enormous impression!

Step #9: Be Ready With Your Marketing Headline

If they haven't already, they will most likely ask you what you do. At this point, you've developed a ton of rapport with them and they want to reciprocate. Now you want to be ready with your Marketing Headline – a sound bite (10 or 15 seconds) designed to get their attention and interest so that they want to know more. Make your marketing headline about them, focusing on the results you provide or the problems you solve.

For example, a management consultant might have a headline like: "I work with CFOs who are tired of choosing between sales and profits."

Step #10: "May I have your card?"

It's more important for you to have this person's card than for him or her to have yours. If they ask you for your card, then give it to them. Most cards you hand out will end up in "no man's land." When you have their card, you have a way to maintain contact and follow up. This will be critical to your networking success.

Step #11: Follow Up Promptly and Set Up a "Referral Meeting"

If you don't maintain contact, all your initial networking activity has been wasted. Unfortunately, this is the normal experience of most professionals. As is true in sales, the gold is in the follow-up. The process I'm going to outline next will be your key to getting results:

Send your new friend a note the next day reinforcing your desire to refer business to them. Soon after that contact them and suggest having a referral meeting. This idea may seem radical to some but I found it to be one of the most effective approaches to getting referrals. Here's the idea: referrals just don't happen, you have to be intentional.

Invite your new "strategic partner" to have lunch with you and let them know that you want to discuss specifically what people you can refer to each other. Most likely, if they're serious, they'll love this idea. They'll be thinking, "Finally, someone who's really serious about referrals!" Make sure they know you're bringing your Rolodex along and suggest they bring theirs.

At the meeting, take some time to get familiar with each other's business, the types of clients you serve and solutions you bring to the table. Then take time right there at the meeting to brainstorm specific clients you have who might have a need for this person's services. Make a list of the names right there at the meeting. You'll be amazed at how many you'll come up with. Next have them come up with a list of people they can refer to you.

This next step is really important: coach them on how to engage the referral. Most people will handle a referral opportunity as follows: they'll talk to their contacts about what you do (let's say your name is "Jack") and say, "Here's Jack's number – if you are interested, give him a call." And what happens is that Jack never gets any calls.

Instead coach your networking partner as follows:

  1. Talk to the people on your list briefly about what I offer. Use my marketing headline.
  2. Ask them if it would be ok for me to give them a call. They'll let you know right then and there if they have no interest.
  3. Assure them that I will not "hard-sell" them. I'm not interested in selling to people that have no need for my services. Rather we'll explore if what I have to offer is even right for them. If it is, we can move forward. If it's not, I'll thank them for their time and that will be the end of it.
  4. If they say "ok", let them know to expect a call from me in the next couple of days and then contact me with the person's name, number and any other information you think is pertinent for me to know.

Using this process, you can be sure contact will be made with your partner's clients and these will all be warm calls. Be sure to thoroughly assess the needs of the referral when you call them. This process will be critical.

One final note about this process: you may want to do this over multiple meetings. The initial meetings will be spent getting very familiar with your networking partner and their business. You don't want to haphazardly refer your clients to someone who doesn't provide exceptional service. Do your due diligence. See if you can get a sample of their services, so you can experience what they offer first-hand. Also, see if you can talk to a few of their clients about their experience with your networking partner's services.

Step #12: Measure Your Networking ROI

I put this last step in because I often see people involved in five or six networking groups spending a lot of time going to events but get very little results. Every few months or so, examine what return on investment (in terms of time and money) you are getting from your networking groups. All networking groups are not created equal. If you are giving and giving and not getting – it's time to move on!

Do you have a question you'd like answered in The Independent Consultant? Please let us know, and we'll address it in an upcoming issue.

David C. Miller, FSA, MSCC, is a professional business coach who works with actuaries, consultants and executives who desire to attract more clients and be more influential in their organizations. He conducts seminars and one-on-one coaching in business development, conducting needs assessments, leadership, team building and communication effectiveness. He can be reached at 215.968.2483.