Having been networking for a while, there are clearly different distinct schools of thought on how to approach networking in the most rewarding manner. Power networkers will hold tight and true to their strategy, and telling them otherwise will typically offend them. Which way yields the best results?
We’re going to look at two distinct methods in very broad terms: the sales funnel and the sales pitch.
The sales funnel is a relationship based approach that relies on creating sales people from your encounters rather than customers.
The sales pitch attempts to turn that person you meet into a client.
This will involve math, so if that’s a deal breaker, I will not be offended if you find that back button and get out of here.
Let’s say you attend 3 events per week, each new customer yields $200 and you have enough time in your week to commit to each of these strategies.
First, we’ll analyze the sales pitch. If you’re attending 3 events per week, you can give your sales pitch to anywhere between 12 people and 45 people. For our sake, let’s put this at 24 people that you’ll give your sales pitch to. This would also require either attending new events, or attending events that have enough new people that you can continue with this strategy indefinitely.
Out of those 24 people you make your sales pitch to, let’s say you convert 25% of them to clients. That’s 6 new clients a week, yielding $1,200.
Your new clients may also bring in your clients. As the saying goes, your best referral source is your current customers.
The equation for the sales pitch ends up being Y = Limit as X approaches (weeks in your career) of the integral of ((Number of new contacts per week * conversion rate) + (Number of new contacts per week * conversion rate * X * conversion rate from clients))
With the sales funnel, if you’re attending 3 events per week, it’s reasonable that you’d meet between 3 and 15 new people. Of those new people, if you’re genuinely looking to build a relationship, you can probably sit down with 75% of them and convert 25% to long term relationships.
Let’s say you ended up meeting 8 people. That means, of those 8 people, you’ll form long term relationships with 2 of them each week. That’s 100 new relationships per year. There is, however, a rate of diminishing returns on this, as it is impractical to think that you’ll be able to maintain 500+ long term relationships with people you’ve met.
The equation for the sales funnel is a little more complicated, but it would look something like this: Y = Limit as X approaches (weeks in your career) of the integral of (Number of new contacts per week * conversion rate) * X ^ 1/2
For long term gains, you need to focus on the sales funnels opposed to the sales pitch. Some of those people you pitch to may become sales funnels, but if your goal is the funnel, you’ll end up with more sales in the end.