Wherever You Go, Networking Makes You Grow There's a reason referral networking has become a marketing strategy worldwide: It works.
By Ivan Misner
Opinions expressed by Entrepreneur contributors are their own.
Imagine being dropped off in a foreign city with nothing but a few hundred dollars and being told that the only way to get home is to start a business and make a lot of money--in six days. Well, you don't have to imagine it. Just watch the BBC television show The Last Millionaire.
In this reality show inspired by Donald Trump's Apprentice, 12 of the UK's most successful young entrepreneurs pair off to compete in a series of challenges. They're taken to cities around the world where--without their accustomed luxury, without the aid of their companies, colleagues or friends, without access to their bank accounts, often without even knowing the local language, culture or customs--they have to build a business from scratch. The team that makes the most money in a week gets to go home; the rest go on to compete in another city. The last surviving pair are pitted against each other to win the honor of not being The Last Millionaire.
In one episode, the final contenders, Natalie and Lucy, were flown to Hong Kong and lodged in a cheap hostel. They were each given the equivalent of a few hundred U.S. dollars and told to create a product and sell it in five days. They could recruit student helpers from a list they were both given, but otherwise they were left pretty much on their own.
Natalie called the student contacts for help. Lucy, however, went to an internet café, typed "business networking" into the search engine and called the president of one of Hong Kong's local networking chapters, wrangling an invitation to attend the next meeting.
Minutes after giving the group a 30-second presentation on her business goals, Lucy was networking with members and getting referrals for contacts that would design, produce and sell her T-shirts. Among those referrals were the largest manufacturing agent in Asia and one of the top manufacturers in Hong Kong. A couple of days later, her new business was off to a great start.
Want to know who won? Lucy, of course. Her earnings were 16 times her startup money, and more than four times what Natalie made.
Think of it; in a time when markets worldwide are struggling, an ambitious person with good business sense can build a profitable enterprise in less than a week--with a little help from some business networkers. To people who are not familiar with the power of networking, that is astounding. There's not a more vivid testament to the power of referral networking--at least, not on television.
Networkers should know about the power of relationship networking by now, but I'm still regularly bombarded with questions that reveal how much myth and misinformation there are about networking as a marketing tool:
Is referral networking truly effective, or is it just a way to pick up the occasional new client?
Can networking be considered a legitimate business strategy? Aren't direct mail, billboards, even phone book ads more important?
The truth is that referral networking is becoming an accepted and important marketing strategy in businesses worldwide. There's a very good reason for this; it works. It's a cost-effective way to get in front of new clients, and it's a much better way to keep a business prosperous over the long term (because it's built on mutually beneficial relationships between you and your fellow business owners). Referral networking is powered by the oldest and most enduring principle of human society--Givers Gain--the idea that the good you do will eventually come back to you in one form or another.
