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Networking 101 – The Costs Involved

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Everybody is looking for the ‘good deal’, the great saving, the best discount! Not only in our personal lives, but also in our business lives, stretching the Rand as far as we can has become a way of life.

Yet somehow, there are so many of us who don’t understand the value and cost saving that we have when we Network. Let’s have a look at a ‘cost on cost’ type of situation (Please note that these calculations were done as at March 2010, when this article was originally written)..

Let’s suspend belief for a moment and say that I don’t Network at all, but rather do ‘cold calling’ – my looking for prospects would look something like this:

I would have to telephonically contact all my prospects either off a data base (ok let’s cut costs completely and say that I contact my prospects from the telephone directory). So each and every hour, I would need to contact say between 15 and 20 people. So in an 8 hour day that would mean between 120 and 160 people. Of these, I would manage to get appointments with say 5% so that would be between 6 and 8 people. So now I have spent an entire day, which at my current hourly rate is R7 600 (never mind the cost of the telephone calls) and I have set up appointments with between 6 and 8 people who may or may not be interested in doing business with me. None of them have met me, there has not been any ‘engagement’ between us and I would usually have to meet them at their offices which would mean travelling time of say 30 minutes either way and then the hour for the meeting. So my 6 to 8 meetings then become 12 to 16 hours at a further cost of R11 400 and R15 200 (never mind the petrol or the toll fees). Add that onto the previous figure and the cost per meeting each person becomes R2 375.00 and R2 850.00, never mind the cost of the phone call and the petrol and at this point you still don’t know if you are going to get any business out of it.

One of the Networking events that I have great success with is Business Engage who have a monthly Hot Tables event (and believe me that this is not the only Networking that I do). In any event, the cost of the 3 course dinner is R265.00 and it takes from starter to end of pud in the region of say 4 hours (at my rate is another R3800.00 and remember I have had a 3 course meal as well which now totals R4 065.00). At each course I meet and engage with 9 different people, who give me their business cards, who have an idea of what it is that I do and who are like minded and keen to do business, that’s in total 27 people (in the space of four hours) and let’s (to keep the figures rounded) say I meet an additional 3 people during the breaks between courses when everybody Networks with everybody else. So now I have met with 30 people over a period of 4 hours at a cost of R4 065.00. The following day I get out the cards that I got the night before and I contact all 30 people (another 2 hours at R1 900.00) and arrange to meet at a convenient coffee shop somewhere between the two of us. So far I have spent R5 965.00) and I have 30 appointments. My travelling time is now 15 minutes each way and because I have set it up at a coffee shop between us I can now schedule 8 meetings, back to back, at the same venue. So now my 8 meetings becomes R5 965.00 plus the R7 600.00 = R13 565.00 = R1 695.63 per person and this includes a 3 course meal or for the entire 30 people = R5 965.00 plus R22 368.75 = R28 333.75 = R944.46 per person, which is a whole lot better than R1 650.00 per person). The other difference of course is that it is no longer a ‘cold call’ but rather a ‘warm call’ and because the prospect has given me a card and because we have met at a Networking event, we both understand why it is that we are there and we get on with the business of business. Those 30 meetings usually are converted into 15 sales, if not with the person themselves, then certainly from referrals.

The most important thing though is that right from the very beginning I have started building a relationship with the individual who potentially has the ability to keep me in work for months (if not years) through their own data bases.

It makes you think . . . .