In any given week, I must get 3-4 invitations from various social networking groups asking me to join their network - all with the guise of easily making new connections and referrals. With the economy contracting, many professionals see these as a way to "get their name out" without spending any money. But there is a cost... a big one.
It is true that referrals are the highest quality lead you can get because they come from a trusted source, and it is true that many businesses generate 70-80% of their deals through referrals and past customers, but you need to dig a bit further. You see, there is such a thing as "perceived" value and "actual" value. The perceived value is that you can join these social networks for free and instantly say "who you are" and "what you have to offer" and thousands of people will rush to you and use your service. Therefore, the more time you spend emailing others, the more relationships you will make, and this will lead to many deals. Again that is the "perceived" value. The "actual value" is something quite different. Social networking can be a drug. You think that you are making all of these connections every time you send out an email, but the fact is you end up wasting a lot of time on it, especially when most people scan it very briefly as they are sifting through the hundreds they get each month. Now to get me wrong - the idea behind it is good, the problem is the results are something else. The fact that you have connected to a web designer in Pakistan, or someone in human resources for Kraft in Kansas, or perhaps a real estate agent somewhere in Florida is fine, but do you have the time to wait for one of these very long shots to know someone in your area that might someday use you? Now is the time you need to focus on what works...referrals. Specifically, non-competing business professionals in your area that are willing to refer you to anyone they know, in exchange for you doing the same thing. Acquiring local referral sources has and will always be the most efficient way to grow your business in the long run. What do you think has more value, you spending 10 minutes building a relationship with a wedding coordinator in some other state that might know someone, someday, that might move to your city, and might think of you or...you spending 10 minutes building a relationship with a local lender, insurance agent, painter or other service provider that is meeting the same people you want to meet in your area every day? That is actual value. Yes, the economy has slowed and you probably have a lot more free time - invest it wisely. Don't allow yourself to have the attitude, "I will just wait for the economy to turn around." Build relationships with those people in your area that will recommend you to everyone they know. It will benefit you now, and exponentially when things improve.
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