Business Development through Online Networking
By David Teten and Scott Allen
Recently, business networking has been perceived negatively due
to its widespread use in the network marketing industry and the
proliferation of “lead generation clubs” or “lead
exchange clubs” that focus on impersonal lead referrals rather
than on building relationships. The surge in popularity of “social
networking” sites on the Internet, however, has sparked a
renewed interest in meaningful discussion and research on the value
and importance of networking, particularly to mainstream businesses.
Why are business networking and business development so well suited
for each other?
- Business development is often a low-risk or shared-risk
proposition. Business development is about partnerships.
You are rarely “sold” in a business development context—there
is a greater sense of coming together, exploring whether or not
the relationship may be mutually beneficial and working together
to make it so. The risk proposition is much lower than in a sales
situation. This makes business development much “safer”
in a business social situation than sales or marketing. Suggestions
of possible partnerships don’t trigger the automatic defense
mechanisms when we realize someone is trying to sell or market
something to us. It’s always easier to talk about a partnership
than a purchase.
- The relationship is an end, not just a means.
By building relationships with relevant and influential people,
you will receive more support in achieving your business objectives.
Often, the long-term benefits of a specific relationship may be
unclear at the outset. The focus needs to be on the relationship
itself, not just the short-term objectives you may achieve with
that person.
- Business development is opportunistic as well as strategic.
Heightened awareness is a key skill in business networking. Not
only do you need to be on the lookout for opportunities for yourself,
but you also need to look for opportunities to connect others
together based on mutual interest (or pairing someone who has
a need with someone who can fulfill it). In 2001, the company
I was working for completed a multi-million-dollar merger that
started with a Yahoo! Group conversation. Neither of us was looking
for that specific transaction or even aware of each other’s
existence. But by simply being in the right place at the right
time and being aware of the conversations taking place and how
they related to our companies, we were able to initiate a very
large deal.
What about online networking? Can people really develop trusted
business relationships over the Internet? Are these new social networking
sites actually helpful in identifying and building those relationships?
In a word, “Yes.”
If you work for a large company, chances are that most of your business
development activities are not local, and it is very likely that
you already do a substantial portion of your business development
work via e-mail and other Internet technologies. Business travel
has dropped significantly since 2000 by an estimated 15 percent.
The Travel Industry Association’s 2003
Domestic Business Travel Outlook reported that nearly half of
all business travelers used technologies such as teleconferencing,
videoconferencing and web conferencing to conduct business instead
of taking a business trip. That number is growing.
Odds are that you’re already using these technologies yourself,
and undoubtedly, you’re using e-mail. So, what do these online
business communities offer beyond what you’re already doing?
- Leveraging of existing relationships. Social
network visibility sites such as LinkedIn, Spoke and Zero Degrees
give visibility into your existing relationships. If you have
a large personal network, it is likely that you know someone who
knows the specific person you’re trying to reach, or perhaps
someone at that company. The challenge is figuring out who that
person is. If your direct contacts participate in these systems
you can easily identify which of your current contacts can provide
you with an introduction to the individuals and companies you
wish to approach.
- Focus. Opportunities to interact face-to-face
with large numbers of decision-makers in your target industries
are probably few and far between—a few conventions a year
and perhaps a professional association or two. But online, you
can be highly focused in your interactions, as there are niche
communities for just about everything you could imagine. Want
to connect with CFOs and other senior financial executives? Knowledge
management experts? Open-source software developers? There are
focused groups for all of these that will allow you to connect
with the right people for your needs without a lot of irrelevant
“noise.” You can also immediately search for and locate
people in a particular industry, role and/or company, which would
be impossible to do face-to-face and even in one-on-one e-mail
and telephone interactions.
- Increased reach. In person, and even in e-mail,
there is a practical limit to the number of people you can meaningfully
connect within a given amount of time. But in an online community
or blog, you can carry on public conversations, potentially reaching
hundreds or even thousands of people with the same effort as a
single e-mail. For conversations that need not be confidential,
such as a discussion of market trends or of companies and products
in a particular market segment, a public discussion will increase
visibility for your company and provide additional assistance
in identifying your potential partners and connecting with them.
Your entire network becomes part-time business development staff
for your company.
- Reduced time and expense. Networking online
allows you to reach more people with less effort, to more quickly
identify and connect with the right people, and to reduce travel
time and expenses.
There are many web sites available to those who wish to explore
online networking. How do you select the appropriate ones for your
business objectives and get started?
1. Clearly define what you have to give and what benefits
you expect to receive from online networking. This may
sound obvious, but it is a critical first step. In order to focus,
you have to know what to focus on. Requests for support and connections
are most effective when they are specific. Who do you want to
connect with? What roles? What industries? And what do you have
to offer? Think not only in terms of your business development
objectives, but also other assets—your contacts and expertise.
Write it all down—you’re going to need it later.
2. Join some general-purpose business networking sites.
This will familiarize you with the practice and help you start
making some connections. Some of the best ones for business development
purposes are
- AlwaysOn
Network
- Ecademy
(or us.ecademy.com for U.S. residents)
- Eliyon
- ItsNotWhatYouKnow
- LinkedIn
- Ryze
- Spoke Software
- Zero Degrees
For more guidance on selecting the appropriate visit
Guide
to Online Social Networks, Social Software, and Business Communities.
3. Create a profile – Remember, much of
the benefit to online networking is that a lot of it is passive
networking—people can learn about you without you having
to be directly engaged with them. For that to work, you have to
set up a profile that attracts connections and gives people enough
information about both you and your company to determine if you
might be a good connection. You don’t have to write your
life’s history, but you should provide details about your
recent professional history and interests, as well as personal
interests which you are willing to make public and use as a basis
for connecting.
4. Participate – These online communities
don’t work unless you work them. You can’t reasonably
expect to derive value from your participation unless you are
also willing to create value. Watch for opportunities to contribute
your expertise to the public conversation or to make connections
between others, just as you would want others to do for you.
5. Focus – Identify the niche communities
where the people you want to meet are active. If you are able
to do this at the outset, you may want to skip the second step
(above). However, your best avenue for finding these niche communities
is to connect with some of the people in the target group in the
larger, public networks, get to know them, and find out where
else they connect. Many of the niche communities will not be as
highly visible as “networking” sites—in fact,
they may just be e-mail discussion lists that are hard to find
through search engines. You find out about them by knowing the
right people.
It’s worth noting that online networking doesn’t just
take place in “networking” sites any more than face-to-face
networking only takes place at networking events. The interest in
social networking technology by analysts, investors and members
has increased the general interest and activity level, but like
many other technology trends, its popularity may fade. The practice
of building business relationships online will not. In fact, it
will increase in popularity to the point that it is no longer considered
a separate practice but rather an integral part of business development
strategy.
The explosion in memberships in these sites and press coverage of
this phenomenon indicate that this technology is getting ready to
cross the chasm this year. The early adopters of the practice will
be the ones who are best positioned to take advantage of that growth,
making now a good time to start.
This article was originally published in the Business
Development Institute newsletter.
David Teten and Scott Allen are co-authors of The Five Keys
to Building Business Relationships Online, and the forthcoming The
Virtual Handshake. Teten is CEO of Nitron Advisors, which provides
institutional investors with access to frontline industry experts,
and Chairman of Teten Recruiting, an executive recruiting firm.
Allen is the leading consultant and industry analyst on building
quality business relationships online, offering training seminars,
teleclasses, and consulting both independently and in conjunction
with several online social networking sites. They offer weekly tips
and a free in-depth guide to online social networks and business
communities on their site, OnlineBusinessNetworks.com.
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