This blog is based on an excerpt from our webinar, Cultivating your Network for Maximum Profit, hosted by renowned sales coach Mitch Harris.
Today I’d like to discuss why cultivating your existing network is the most effective prospective method to utilize to maximize your sales. This is a very important topic for several reasons, but the main reason I would say is that when you’re utilizing your existing network you're really looking at the path of least resistance.
Personally I came out of my sales career with a very heavy cold calling background. I was a stockbroker on Wall Street back in the Golden days when it was one-call closing. “A buyer dies” they say, You call someone up with a stock and either their buying or they’re hanging up the phone. High-pressure, 80% employee turnover in the first 90 days, direct cold calling.
I also worked door to door as an office systems and office equipment salesman, canvassing what's called the garment district here in New York City. Basically, there were a lot of old school crabby people who owned showrooms, and I had to walk in through reception areas and deal with people who did not know me and cultivate that and turn them into business.
Make no mistake--cold calling, cold prospecting, and telemarketing are all great tools and I highly recommend them. So by no means am I downplaying that, or saying that is not a part of what you want your game to be. But depending on your situation the straight up cold call or cold prospect may not always be the smartest or most time-efficient way to operate, and it's definitely not the path of least resistance. There is really nothing in the world like nice, juicy, warm market contacts or leads. These are either people who know you and are open to taking your call or visit, or people who are being referred by someone they know, like, trust, and respect.
Studies in this area normally report that one solid referral is the equivalent of seven cold contacts. When considering the amount of time and effort that goes into cultivating one of those leads, that means it can take seven times as long to develop a cold prospect versus a referral. Yet, most salespeople still insist on spending the majority of their time making cold calls! It doesn’t have to be this hard! One of the most common misconceptions in the salespeople I work with is that in order to succeed they have to struggle. It's gotta be this big fight or huge effort that they can overcome and then at the end they can walk through the finish line with their arms up saying “Yes, I did it… I made it happen”.
It's this Idea that getting to the prize has to be difficult and a struggle that holds a lot of salespeople back from making a difference with their existing network. Sometimes the direct path to success and the results you want can be the path of least resistance when you’re operating smart and intelligently.
Here are some other statistics that support the idea that working your network is more effective than your regular cold call.
Only 1% of cold calls ultimately convert into appointments, according to a study by the Keller Research Center at Baylor University.
Around nine out of 10 of top-level B2B decision-makers simply do not respond to cold outreach anymore, reported LinkedIn's Head of Sales Kevin Scott.
Nearly three out of four business execs says that they prefer to work with sales professionals who were referred by someone they know. As communication technology becomes easier, people need to rely more on their networks and who they trust.
Sales people are 4.2 times more likely to gain an appointment if they already have a personal connection with the buyer.
Another great reason to focus on networking instead of cold calling is that it can be a lot more enjoyable! A limiting belief that is common in salespeople is that mixing business with pleasure is a bad thing. While in some cases that is true, there are very often people within your sphere of influence who know you, trust you, like you, love you, respect you, and who want to see you win and get to the next level. Overlooking these opportunities can just steal money and take earnings out of the pocket of so many consultants.
Oftentimes the best avenues can be right under your nose. In my trainings I like to share a story about “Acres of Diamonds”, which is a true story about a peasant Farmer in Africa who sold his farm to become a diamond merchant and found out years later that the farm he actually sold was sitting on the largest natural deposit of diamonds in the entire continent. So I want you to consider that your acres of diamonds could be right in front of you, and you could harness and monetize it simply through effective networking by connecting with people that you already know.
So how do you cultivate and comb through your network to find the perfect opportunities? I used the words “comb through” specifically because this is the kind of thing that you can get micro with and really look at people across the board that you already know. In the next blog (and in the webinar recording), we go through specific ways to comb through your network to get the most value from warm prospects.