Denise Praul, with Whiteboard Learning, shares how to calculate your return on investment from networking.
Here is the transcript from the presentation:
Ryan: November is Career Development Month, so all month long we have great speakers on how each of us can walk away from our events knowing something that we can use to improve our careers and our business.
Ryan: And today we are definitely not going to disappoint. On that, so I would like to introduce our speaker today, Denise Praul, who, she and I connected, I think it’s been a couple of years ago now, and I am a student of her Road Map to Unlimited Referrals workshop, which is a multiple week, er, workshop on how to dial in on who really is the person that you enjoy working with and is going to get you the financial stability that you need, so that you’re not spending all day chasing any client, because you know who really needs your service, who you enjoy working with, and what makes them tick when it comes to a decision to purchase them.
Ryan: So, today Denise is going to share with us how we can calculate whether or not our networking memberships are getting the return on investment. So, everybody, let’s give Denise a hand.
Denise: Thank you Ryan, I appreciate that. OK. I’ve got a PowerPoint for you and Ryan, did you give me screen share? Yes. OK.
Denise: And Ryan is my technology guy and Ryan can tell you that I’m not very good at this, so patience here. He’s the one who helps me with everything I do.
Denise: Let’s get it done. And it’s not letting me go to the top here.
Ryan: So, click on the slideshow tab in the Burnt Orange ribbon at the top about 1/3 of the way from the left. A couple more to your side.
Denise: The zoom ribbon is over top of that.
Ryan: Ah, I see. Hit F5 on your keyboard.
Denise: We don’t have an F5. I apologize everybody. This is not my strength. You’re going to love the presentation, but, alright, I’m going to stop sharing, I’m gonna start again, OK.
Ryan: Denise, quick note, start your presentation 1st and then when you do the screen share, choose the option that has your Whiteboard Learning Presentation in the large.
Denise: OK.
Denise: Alright, we’re gonna start again, my apologies.
Denise: Still doing it. I think there’s something down at the bottom.
Denise: Isn’t there, Ryan, where I can start it at the bottom? There we go, got it.
Ryan: Got it.
Denise: OK, yeah success. Alright technology is not my thing, but I am really good at referral marketing, that I can assure you.
Denise: OK, so what we’re going to talk about today is calculating the return on your investment for your networking membership.
Denise: So, as I mentioned in my initial introduction, I am, I specialize in referral marketing, and I came to that because I own another business, and I’ve owned it for 25 years, and I found that referrals were the very best way for me to get business.
Denise: They were easier for me to get. It costs me less. They stayed with me longer, they spent more. Referrals, I found for my business and most people fighting for theirs, are the very best way to build their business.
Denise: So, I decided if I was going to use that technique to build my business, I needed to become really good at it, so it took me a couple of different years of trial and error and I created a referral generating system for that business that, the next year, when I put that system in place, I doubled my business with no extra time or money.
Denise: And I quickly grew it to multiple 6 figure business. And the main concept behind that business is, I spent more time at my desk helping my clients instead of going out and hunting for my next client.
Denise: And that’s a lot of what I’m going to talk about today, in getting your return on your investment for your networking.
Denise: Networking is just one strategy that you can use in building your referral marketing business.
Denise: So, here’s what we’re going to be covering today, we’re going to talk about how much is your networking costing you?
Denise: And I would venture to guess, many of you have not really done an analysis of how it, how much it costs you to actually do networking. Then, one is how, how much is your networking making you?
Denise: And then we’re going to talk about how to improve your return on your networking?
Denise: So, the first thing we’re going to do is how much is your networking costing you?
Denise: Now we’re going to go through, if you’re not numbers people, hang with me, but we’re going to go through a calculation. I want you to start doing your own calculation and thinking about this.
Denise: Well, the first thing I want you to think about is the number of hours you spend networking each month.
Denise: And I’m not talking about just sitting, maybe at a luncheon or going to an after-hours event and meeting people and passing out your business card. That’s just one part of your networking.
Denise: So, some of the other things that you need to consider in networking is, yes, how much time did you spend at that after-hours event? How much time did you spend at that lunch? But also, what was your travel time?
Denise: It could be also follow-up time.
Denise: So, networking is pretty worthless if you’re not following up with the people that you talk to and you meet, so you’ve got to calculate in your follow up time. So, that can be coffee meetings, zoom meetings or writing notes to people, sending emails. So all of this needs to calculate into your networking.
Denise: So, for this particular example, I came up with kind of a conservative, conservative number of saying let’s say you spend 12 hours a month on your networking time.
Denise: Let’s take that times 12. We come up with a calculation of, you’re spending about 144 hours a year networking.
Denise: Well, the next thing I want you to really think about, and again this is not something, as smaller business people, that we really consider, is how much is your hourly rate?
Denise: And many of you don’t charge by the hour. Some of you do. Many of you don’t, but you still have a cost of time. So, I want you to really give that some thought.
Denise: If you don’t know off the top of your head, how much does an hour of your time really cost? If you were sitting down and you were working with a client, let’s say it took you 2 hours to finish a client project, and then you’ve got the amount of money that you charged, what’s the cost of your hour?
Denise: So, maybe you were doing a project that you charged them $200. Took you 2 hours to do well. Your hourly rate is $100 an hour, because if you’re spending time working with your clients, that’s what you’re making.
Denise: So, I put a really low conservative hourly rate of $25 on here, but really think about that, if you spend 4 hours working with a client and you charge them a certain amount of money, what’s your? hourly rate worth? When you’re out spending your time networking, that’s how much it’s costing you.
Denise: Because if you’re networking instead of helping your clients, then you’re losing out on that money. That’s your networking time.
Denise: If your rate is a $100 an hour and you spend an hour at a networking event, that’s a cost of $100 to you.
Denise: And a lot of people don’t think about their networking that way.
Denise: So, I made a really conservative rate of $25.00 an hour. So, the total time cost of networking for this particular example is $3600, and that’s extremely low. That’s extremely low.
Denise: Then what we need to add on to that is, what is the cost of the membership?
Denise: So, maybe you belong to the Chamber or you belong to a BNI or an H7 or Rainmakers. How much does it cost you for that membership every single year?
Denise: So, let’s add that together. That’s a grand total cost of your networking of $4000. So, if I said to you, have I got a deal for you, I’ve got this networking group. I want you to join this networking group. We do luncheons every single month, we do after-hours, and it’s going to cost you $400.00. And you’re like, well, that seems pretty reasonable. I could probably make $400.00 back.
Denise: But, that’s not the cost of your networking. The cost of your networking is $4000, so if I said you can join this organization and we have all these networking opportunities and all you have to do is write me a check for $4000. You’d probably tell me I’m crazy.
Denise: You say there’s no way I can invest $4000 with you.
Denise: But yet, that’s what you’re doing when you’re doing your networking time, so I want you to really think about it.
Denise: I want you to think about how much time do you actually spend networking and not just at the event. But all the follow up activities that go with it, all the emails, all the coffee meetings.
Denise: I want you to also think about what your hourly rate. And get very clear about that as well, and do this calculation on your own for every networking organization that you belong to.
Denise: And then you’re going to have to weigh, what’s the return on your investment? Are you getting enough on the other side of that to cover your $4000 cost.
Denise: So, I tell you this, for a couple of reasons.
Denise: One is I want you to really take your networking seriously, because it’s not just wandering around passing out your business cards hoping you meet the right person. It’s costing you money.
Denise: You need to have a strategy and a plan in place when you’re networking to make sure that you are getting a good return on your networking time.
Denise: The next thing I want to talk about is, how much does your networking make you?
Denise: So, we’ve already talked about how much it costs you, but do you know how much you really get from each one of your memberships or your networking activity?
Denise: So, here’s a little spreadsheet that I put together and this is something for all the students that go through my class, the one that Ryan referred to, this is the one of the first things we do is, you have to track where your referrals are coming from.
Denise: You have to keep track of them, because if you don’t, well, there’s a lot of reasons, and I’ll share some of them with you, but you don’t know, if your, if your activities are actually paying off or not.
Denise: So, let’s particularly look at the column here that says service or product. And then let’s look at who’s giving you referrals.
Denise: So, first of all, if you track, and this is basically, you’re going to every referral you get, you’re going to put the date you’ve got the referral. You’re going to put the name of the person who referred you, or, I’m sorry, the name of the referral, you’re going to put their contact information in.
Denise: Then you are going to put what product or service that you provided them or that they were referred to you for and then who gave you that referral.
Denise: So, if you put your product in service in here, you know which products and services are making you the most.
Denise: So, when this is, uh, uh, a spreadsheet I put together for a graphic designer. So, if you look at this, you can see that our directory makes this graphic designer $500.
Denise: She probably wants to have more referrals to directories, right? If you look at it, you see that a flyer makes this graphic designer 75. Fliers might be a good foot in the door.
Denise: But really her time is better spent on a directory, or her time is better spent on a program design.
Denise: So now, you’re starting to see, when you’re asking for referrals and who you want to work with, this graphic designer is probably going to try and gravitate towards more people that are going to want directories and program design.
Denise: And when she’s not working, that’s what she’s going to tell people she’s looking for, so she’s not going to go out there and say anybody who needs graphic design. She’s going to say, I really like to work with people that put directories together every year, do you know someone you could introduce me to? Because that makes her the most money.: 00:12:57: She’s going to have to do a lot more flyers to get to that $500.00 directory. So, the first thing when you track your referrals is, one you put the referral in the spreadsheet. That helps you not lose track of referrals.
Denise: I know that you, I get referrals from emails, Facebook Messenger, text messages, voicemail and I need to have a place to put them all.
Denise: Second is, I tracked my service or product that I’ve been referred to. I track how much money it made me, so I know which ones are paying off.
Denise: Now let’s look at the person who gave you a referral. We especially want to track the people that are giving us referrals. You want to make sure that the ones that are closing, so I’ve sorted this by the referrer.
Denise: I love an Excel spreadsheet because I can sort it in all the different ways that I want.
Denise: So, in this case, and you might, some of you recognize some of these made-up names. June Cleaver gave me the, the directory and the program design. And so, June Cleaver just gave me $800 worth of business. What do I want to do with June Cleaver?
Denise: I want to thank her. I want to let her know exactly whether the referral closed or not. What I did for the referral, and I want to tell her I’d love to have more of those types of referrals, ’cause they’re perfect for me.
Denise: So, now I can circle it back around with the person who gave me the referral and say, if you know more people like that, please send them to me.
Denise: This is leveraging your time. It’s leveraging your time. Instead of saying wow, June Cleaver sent me 2 referrals, now I need to go to my next networking event and meet more people.
Denise: When you’re thinking about what you’re going to do with your day, you’re going to go in here and you’re going to see June Cleaver. I sent you two of the biggest money making referrals that you’ve had.
Denise: You want to send a lot of love June Cleaver’s way. You want to tell her thank you so much for those referrals. Those were perfect referrals for me. If you know anybody else, make sure you send me more referrals.
Denise: If you’re just working your referrals willy-nilly, you don’t know to do that.
Denise: The next thing is, where did you meet the person who gave you the referrals? And this is going to tell you if your memberships of particular networking groups are paying off.
Denise: So, in this particular case, we see that June Cleaver came from BNI. Well, that’s certainly paying off, we also see Ricky Nelson, Ricky Nelson gave me a workbook creation that was $450.
Denise: So, when I add up, and every year, by the way, when you belong to a networking organization, don’t they knock on your door and say it’s time to renew, I need a check, right?
Denise: How do you even know if you should renew that again? Is it paying off? Is it not paying off?
Denise: You think it is. You think it’s not, and that’s what we base our decisions on.
Denise: I think it was OK. I think I made money from it. I think it’s working out pretty well. I’ll write another check or no, I don’t think I got anything from it.
Denise: But yet, maybe you did. You just didn’t focus on it, or you don’t remember it. When you put where you met the person who gave you a referral, when it comes time for this graphic designer to renew her BNI membership, she’s going to go, yes please. She’s going to write a check.
Denise: When it comes to the Chamber, she may say I’m not so sure the Chamber is working out for me.
Denise: However, the first thing you always need to look at when you belong to a networking group is, am I working in the networking group properly?
Denise: If you go on to a Chamber and they have 12 launches a year, and you went to 2, you can’t say the chamber is not working for you. You didn’t do the work, so the first thing you want to do is point back to yourself and say, did I put the work into that particular organization first?
Denise: If you did and it’s still not paying off for you, which you know when you’re tracking, then it’s like, well, maybe I don’t want to renew my chamber membership. Maybe I’ll look for another organization that might be a better fit for me.
Denise: So, this tells you, money, which is what we’re talking about here, ‘cause money motivates us at different levels in different ways as we discussed.
Denise: So, when we’re looking at whether our activities and our time, most importantly, ’cause we talked about the value of our time are paying off.
Denise: We want to look and we want to make sure that we are asking for the things that are making us the most money. We want to make sure that we are reaching out to the people that are referring us the business that we want need, and we’re saying thank you.
Denise: That’s terrific. Who else can you introduce me to?
Denise: Maybe down here, we’ve got Rock Hudson. He didn’t do so well when it came to referring to us, right? Maybe all we need to do with him is sit down and have another conversation about what we do.
Denise: He obviously wants to help you. So, why don’t you just set up a time to meet with him, instead of saying that Rock Hudson he never gives me anything good.
Denise: Don’t just set him aside, sit down with him and say Rock Hudson, thank you so much for the referrals you’ve given me. They didn’t exactly pan out. Let me tell you why. This is why this one didn’t work out. This is why this one didn’t work out.
Denise: Give him feedback on the referrals that he gave you, and he may say, oh, that’s not what I thought you wanted. And he may turn into one of your best referrers. Don’t throw anybody aside if they’re trying to help you.
Denise: You want to make sure that you sit down with them. You have another conversation with them. Maybe they just don’t understand.
Denise: I’ve had that happen myself, I had somebody was giving me a lot of referrals and none of them closed and I thought my gosh, what’s going on?
Denise: Here she’s working so hard for me, so we sat down and had a conversation and I realized that she was introducing me at an odd part of her conversation with people and they weren’t connecting with it.
Denise: All we did was just re-engineer what she was saying and when she said it. And it made a big difference in the referrals she gave me. They started to close.
Denise: So, you also want to make sure then, that if someone is trying to give you referrals, they’re working for you, that you sit and have another conversation with them and just don’t throw them aside.
Denise: This is leveraging your time, when you use a tracking sheet like this for referrals.
Denise: We just establish the value of your time. If your time’s worth $100 an hour, $50.00 an hour, $25.00 an hour, you want to have this together so that you can make smart decisions and you can leverage the time that you have, so you know whether BNI is working, Chambers working.
Denise: If you need to do more things in these organizations, you know who’s working to give you referrals.
Denise: So, you’re reaching out to them instead of having to have a lot of new people in your network. Use the ones you already have, leverage it.
Denise: So, the final piece is how to improve your return on your networking and here is, you’ll see it in capital letters, if I could make it, I tried to find some animation.
Denise: Ryan, sorry, you’re the good at that, and I’m not, so I just put it in big capital letters, right?
Denise: This is the number one thing that you can do to get more money in your business, it is, create a clear message of how others can proactively create referrals for you. A clear message.
Denise: 90% of getting referrals is on us, and 10% is on the people out there and we have been raised to think of it a different way.
Denise: Just tell them what you do and it’s their job to go find you referrals.
Denise: But if you don’t tell me what I need to go find you referrals, I may like you, I may want to help you, but I don’t have what I need to work with to go get your referrals. So, you have to be crystal clear about creating your message so that they can go find you the referrals that you want. So, 90% of getting referrals is on you. 10% is on everybody else out there.
Denise: So, I can give you 20 small strategies on how to get more return on your networking, but I’m going to give you this one big one today.
Denise: The first thing you want to be clear about in your messaging is your target market.
Denise: Target market is everything and it is the one thing that people push back on me the most about.
Denise: I don’t want one particular group. I don’t want one particular segment, I can help everybody.
Denise: Well, let’s go back to the graphic design example. Yep, she can help everybody. She sure can. She could do a flyer, she can do a business card, but what makes her money? Directories, workbook creation.
Denise: Why do you want to tell people to go out there and get you anything, when you know what really makes you money, so you want to start with a clear target market. Who do you want to work with?
Denise: I am very clear that I work with small business people. And that’s from experience of working with a lot of other different people and knowing target markets.
Denise: The next thing you want to make sure that people know, is the problem you solve. Not your features.
Denise: And I heard a lot in that our introductions, we’ll do this, we’ll do this we’ll do this, we’ll do this. Features are for sales conversation after you get the referral.
Denise: The problem you solve is what helps me get you the referral.
Denise: I’m going to give you a couple examples here in just a minute, so the next thing you need to tell me is what’s the problem you solve because if I say I need one of your services, and somebody is going to go, OK, so, so, I, I find somebody needs your service.
Denise: Somebody is going to say, OK, so you know, what are they going to do for me? I have to have an answer and I can’t sell your features. You have to sell your features. I’ll sell the problem you solve.
Denise: The third thing is, so what can I look for and listen for? What will they be saying and doing to let me know that they might be a good referral for you.
Denise: And the fourth thing is, what question can I ask them?
Denise: So let me give you a quick couple of examples of how this works, so, I just worked with a gentleman who sells Medicare Supplemental Insurance, which is hot, hot, hot right now. You’ve all seen the commercials and it is the open enrollment period.
Denise: So, here’s what his message is when somebody says, tell me what you do, he starts with this target market, I love to work with people that are over 65. Well, what problem do you solve for them? I helped them avoid financial catastrophe, because if you don’t have supplemental insurance or you don’t have the right insurance, you can end up owing huge doctor and hospital bills which can break a senior citizen when they’re on a fixed income.
Denise: So, he helps people over 65 avoid financial catastrophe. What can I look for and listen for? Well, you can listen for people that are talking about having big medical bills. You can look for people that are turning 65 or over 65 right now, and you can ask them this question, how do you, have you had your Medicare supplement reviewed lately?
Denise: Now those are easy things you can teach me. I’m looking for somebody over 65. I’m looking to say to them, you know what, I know somebody that can help you avoid financial catastrophe. I’m looking, will you look and listen for people who are over 65 talking about high medical bills, talking about they’re getting tons of things in the mail right now. They’re so confused about what’s going on with Medicare and their health insurance, and then just ask them, have you had your Medicare supplement reviewed lately?
Denise: Now, I’ve just created or not created a referral for you. I can remember that so easily for him. I’m constantly sending him referrals. I work with seniors over 65. I help them avoid financial catastrophe. If you hear somebody that is confused about their current insurance coverage or they’ve had big medical bills, please ask them if they’ve had their Medicare insurance reviewed lately.
Denise: That’s it, that’s all you have to say. I’ve everything I need to help you now.
Denise: Let me give you a second example.
Denise: So, a realtor that I’ve worked with, so this realtor, they, you know, usually it’s anybody or everybody that buys, you know, wants to buy or sell a house, right?
Denise: So, we narrow down his target market. He loves working with families that live in apartments that have young children. He was raised in Chicago, never had a backyard, had to play on cement the whole time. He really feels strongly that children should have a home. So, his target market is families that live in apartments that have children.
Denise: What’s the problem he solves? I put children into their first backyards.
Denise: What can I look for and listen for? I can look for families that are living in apartments that are saying that the kids, we’ve outgrown it. The kids have too much stuff, I’d love for my kids to have a place where they can ride their bikes safely. Those are some of the things he can teach me to look for and listen for, and then the question that I can ask for him is, have you thought about purchasing a home?
Denise: Then they’ll tell you yes, no. We love staying in the apartment. We thought, we want to purchase a home, we don’t think we can. Then give all those answers that all I have to do then is, say, you know what, talk to him. He’s put a lot of people in your situation into homes.
Denise: I have everything I need. I didn’t start selling his feature so he’ll meet with you and then they’ll look at your credit and then he’ll determine if he can help you, and then you’ll go look at houses. Features.
Denise: What’s the benefit? He’s gonna help put your children in their first backyard.
Denise: So, when you’re doing your introductions, I want you to think about what you did at the beginning, and Ryan, I wish we had time to do them at the end.
Denise: I want you to think about what you did at the beginning and I want you to clear up that message. I don’t need to know all your features.
Denise: When you’re out networking, this is what you say when people ask you what you do. You don’t go on.
Denise: You say, I work with families that live in apartments that have small children. I love putting children into their first backyard, so if you know anybody that is outgrowing their apartment, they want their kids to be able to play in the backyard, ride their bicycles safely, just ask them, have you thought about buying a home lately?
Denise: All you need to say.
Denise: Now they have everything.
Denise: First of all, they start thinking about who do I know, ’cause you’ve been very clear, you’ve painted a picture in their head, so they’re going to start thinking about who do I know. And then it’s going to stay in their head as they start to go out into the world.
Denise: They’re going to see those people, and they’re going to be able to refer them to you, because you’ve been so clear about how they can help you, and they have that picture in their head.
Denise: So, I’m going to finished up, being respectful of the time.
Denise: Let’s connect. So, here’s how you can get ahold of me.
Denise: I do have a free Facebook group you can go into. It’s called Road Map to Unlimited Referrals. If you want to look that up on Facebook, Road Map to Unlimited Referrals and answer a couple questions, I’ll let you in.
Denise: I do free training on a regular basis in there, live trainings. Right now, it’s referral season and I’m doing a whole series on how to make sure that people know what to look for and listen for when there are those Thanksgiving dinners those Christmas events?
Denise: So, go on over and join my Facebook, Road Map to Unlimited Referrals.
Denise: So, Ryan, I’m going to turn it back over to you.
Ryan: Awesome, we only have a couple of minutes left here, but I’d like to give folks an opportunity if they have any questions for Denise before we wrap up today.
Ryan: All right, Denise, it looks like you opened a fire hose and everyone just kind of taking it in.
Ryan: So, let’s give Denise a hand for her presentation today.
Denise: Thank you.
