Business networking is vital for business development and success in this interconnected world. Empowering your employees with the right networking skills and tools will help them build more connections, resulting in more sales and revenue.
However, how do you know if your networking efforts are bearing fruit?
Here’s where measuring the ROI of your business networking becomes essential.
Check out this quick guide to measuring and increasing the ROI of your business networking efforts.
Business benefits of professional networking
Professional networking is crucial for building meaningful relationships that can translate into qualified leads and customers.
Let’s look at some benefits of business networking and how it can benefit your business.
Higher reach and visibility
Networking helps you reach more people and increase your visibility. With strategic networking, you get your name out and build awareness about your company and products.
A higher brand and product awareness helps you get into your consumers’ minds. If they consider buying the product or service, you’ll be the first to come to mind.
Meet prospects and generate leads
Business networking opens opportunities to meet prospects and generate leads. You can meet with potential consumers and learn about their needs and problems.
Additionally, you can introduce them to your product, increase awareness, and generate leads.
Drive sales and revenue
You can also leverage networking to drive sales and revenue. In networking events, you can often come across ready-to-buy prospects.
You can educate them about your product and convert them into customers, driving sales and revenue.
Explore collaboration and partnership opportunities
Networking can open up collaboration and partnership opportunities for you and your business. You can come across businesses and professionals sharing a common goal, opening opportunities for lucrative business partnerships.
Suppose you’re a cloud kitchen offering thin-crust, wheat base pizzas. You may meet someone from a beverage company offering cold beverages like sodas and mocktails.
The meeting can lead to a business partnership like McDonald’s and Coca-Cola.
How to measure the ROI of networking for business development?
Measuring the ROI of your networking efforts can be tricky if you don’t follow the proper procedure. To simplify things, we’ve broken it down into three steps with a hypothetical example for better understanding.
Step 1: Calculate the cost
First, calculate the cost of your networking efforts. Now, this step will vary depending on how you network.
For instance, if you send employees to trade shows and networking conferences, you’ll have to incur their traveling, accommodation, and food expenses. In that case, the cost will be high.
On the other hand, if your employees build relationships online and don’t travel often, the expenses will be considerably low.
Let’s say your networking efforts require travel immersion, and the networking expenses come to $500 per month per employee.
Networking cost per employee: $500 per month
Step 2: Calculate the revenue
Once you’ve determined the cost of networking per employee, the next step is to calculate the return.
Let’s say an employee, on average, connects with 50 prospects a month. Of those 50, 15 convert with an average ticket size of $70.
Hence, the total revenue would be $70 x 15 = $1050.
Total revenue per employee: $1050 per month
Step 3: Calculate the ROI
Now that you have the networking cost and revenue, calculating the return on investment (ROI) is super easy.
The formula for calculating ROI is:
Revenue/Cost x 100
Putting the values into the formula, we get:
1050/500 x 100 = 210%
Hence, if the per-person networking cost is $500 and the revenue generated is $1050, the total ROI of the networking efforts will be 210%.
Return on investment: 210%
What is a good networking ROI?
This depends on factors like industry, business type, and networking methods used. While some people have reported networking ROIs of up to 1000%, the average networking ROI is between 50% and 200%.
How to increase the ROI of professional networking?
Here are some tips and best practices to increase the ROI of your business networking efforts.
Set clear objectives
Set SMART goals for your networking efforts. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Let’s understand with an example:
- Specific: A specific goal can be to connect with at least 10 prospects in one month.
- Measurable: You should be able to measure if a connection is an actual prospect that can be converted into a paying client.
- Achievable: The goals you set should be challenging but achievable.
- Relevant: Your networking goals should be relevant and align with your overall business goals.
- Time-bound: Your networking goals should have a deadline, like building 10 connections in the next 30 days or 25 connections in the upcoming quarter.
Devise an executable strategy
Once you have your SMART goals listed, it’s time to develop an executable strategy to achieve them.
An executable strategy is a strategy that not only looks good on paper but can also be put into action in real-life.
For example, if you want your employees to build 10 connections a month, an executable strategy will be to attend at least five networking events and meet 50 potential prospects a month.
Use effective networking tools
Just like a lumberjack needs to sharpen his ax, you need effective networking tools for better results.
The most important tool is a digital business card that allows you to share your contact information instantly and digitally. Other helpful networking tools are social media and good communication skills.
Follow up multiple times
Did you know that 80% of prospects say NO four times before saying YES? The same rule applies to networking as well.
If you don’t hear from a prospect, it doesn’t mean they’re not interested. They just need some extra push, and following up multiple times is a time-tested way of doing it.
So, if you don’t hear from a prospect, don’t be afraid to follow up.
Final thoughts
In conclusion, it’s vital to measure and increase the ROI of your business networking efforts. By accurately measuring the performance and ROI, you can better determine how your networking is performing and fine-tune it for better performance.
You can increase the ROI of your networking efforts by setting SMART goals, following the right strategies, and using useful networking tools like digital business cards.
If you want to create a secure and professional digital business card, QRCodeChimp has your back.
