Knowledge
Business networking and B2B sales: an anti-guide
Business networking and B2B sales: an anti-guide
Over two hundred networking events. Nearly a decade of animating a community of entrepreneurs. Thousands of conversations, some of which led to something concrete, and the vast majority of which ended in an exchange of business cards and polite smiles.
From this perspective I can say one thing: networking can be valuable, but not for the reasons you most often hear about.
Does business networking really work?
Knowing the right people can help and make many things easier. Steve Ballmer met Bill Gates in a student dorm and joined Microsoft. The founders of Facebook met at university. The founders of the UFC reconnected at a school reunion and then sold the organization for 4 billion dollars. These are beautiful stories. But they are exceptions.
At the TechMine events I organized over the years, people did indeed get to know each other and set up joint companies, someone hired someone, someone became someone’s client. But wherever there is a group of people of an entrepreneurial character, there is a chance that some initiative will arise. Networking does not create it. It creates the circumstances.
People taking their first steps in networking often live with the conviction that it is enough to “meet the right people” and success will knock on the door by itself. That will not happen. Networking, or even “knowing the right people”, is not the magic key to success, as many organizers of such meetings claim.
Why networking does not work as a sales tool
Many people advertise networking meetings as a way to win clients. The organizers themselves often position their events this way: “you will meet interesting people you will do business with”. The truth is that to meet a potential client you do not have to go to a conference. It is enough to function in any environment where your target audience may be found. You can go play football, attend management training, join a tennis club. Wherever you have exposure to people, some share of them may turn out to be potential clients.
Business networking as a sales tool has three serious limitations.
Randomness. You usually do not know who is taking part in the event, and even if you know the list of participants, you will not determine whether those people have needs your offer satisfies. You may be in a room full of people, but depending on what you sell, only a small percentage of them are real client material. And in that thicket you still have to find them, without wasting time on blind conversations that often come down solely to quickly diagnosing who can sell what to whom. If instead you had a well-developed ideal customer profile, you could reach the right people without relying on chance.
The deterrent effect. Many people associate networking with a field for selling. As a place where I can sell something to someone, and someone will try to sell something to me. Hardly any of us likes being sold to. That is why many valuable people avoid networking events. They might feel like chatting with someone casually, having a laugh, complaining a bit and changing the scenery a little. But they do not, because they do not want to be under fire from people who came there mainly to promote their companies.
No scalability. The greatest limitation of networking as a sales tool is the practical impossibility of building repeatable, measurable and scalable sales. Even if a whole group of networking acquaintances is working for you, you are relying on luck and coincidence. Statistically someone will probably turn up, but you will never know how many clients, when, what kind, for what and for how much will appear in your company.
The glass ceiling of contact-based sales
Many entrepreneurs who grow their company relying mainly on contacts and referrals from existing clients at some point reach the maximum of their capabilities. A glass ceiling appears. Sometimes it is one million, sometimes ten million in revenue, depending on the industry and how much business luck the owners had.
Only betting on a more systematic building of sales makes it possible to break through that ceiling. Networking, referrals and contacts are not enough to build a sales systemthat will work predictably.
What happens when an entrepreneur bets exclusively on networking
One of my clients started his company precisely with networking. Straight after university, not knowing a better way, he joined an organized networking group and started participating very actively. He did not limit himself to the weekly meetings of his own group. He would get up at three in the morning and drive several hundred kilometers to other meetings of this type. In total, networking activity could consume several days a week of his time.
In this way he built the seed of a company to the level of low hundreds of thousands in turnover.
When he bet on building more predictable and scalable sales, within two years he increased revenue tenfold. And he left the networking organization, which was a big surprise to its members, because he had been one of the most engaged participants.
Networking in a foreign market: the case of expansion to the USA
Another example. An acquaintance, the owner of a software company of about a hundred people, decided it was time to expand to the United States. He went rather all-in, because he even decided to move there permanently for a couple of years. His plan? Build relationships on the spot. Get to know the business culture. Build contacts.
We met after about six months. He was flying to conferences (a ticket can cost 1,500 dollars, plus flights and hotels), showing up in coworking spaces, taking part in local events. He often sat at a table with owners of competing companies from Mexico or Romania. Everyone was trying to sell something to someone, and there were fewer potential clients than sellers.
The experience he gained was valuable. He developed in business terms, met people. But it had no bearing on sales at all.
Building business relationships versus sales
Networking is sometimes used as a synonym for building relationships. Yes, relationships can be helpful. If you like someone, you will more willingly listen to what they have to say. But that is usually where it ends. People do not buy because they know and even like someone. They buy because trust has been built and they believe the right results will be delivered. A relationship alone, even the best one, will not make someone buy from you.
Recall all the relationships you have built in your life and set that against how many of them translated into your sales. How many times have you commissioned something from someone just because they were an acquaintance, and not because you believed in the value of their work? How many times have you learned that an acquaintance used your competition, even though they knew exactly what you do?
You can build relationships at networking events, tell each other funny stories or go to parties together. But if you do not prove that there is real value behind your offer, no conscious person will buy from you or recommend you further. Credibility and trust are the main currencies in sales. In this context networking can be one of the prospectingchannels, not the foundation of sales.
To sell, you do not have to have a relationship built at all. If you do your homework, do good reconnaissance and develop a resonating value proposition, you can interest people in your company even if they do not know you.
What good networking really is
I understand networking as an opportunity to exchange experiences, get to know new points of view, confront my own thoughts and look at things from a perspective I would not have noticed myself. Sometimes we hear a single sentence that prompts reflection or concretely helps with growth.
Networking is also a way to recharge your batteries. Drawing good energy from people who struggle with similar challenges. In real contact, in a small group, people are more inclined to openness and honestly expressing opinions than within carefully moderated statements on social media. If the atmosphere of the event is conducive, they share experiences, controversial beliefs, and even reveal methods they would not talk about publicly.
Being in an environment of dynamic, creative people with an appetite for growth strongly affects the pace and direction of your own growth. As a person and as an entrepreneur.
How to talk at networking events
If you decide on a networking event, then before you go, define your goals. What do you expect? What kind of people would you like to meet? Read the information about whom the event is addressed to. If the organizer cannot precisely name the target group, or it is too broad, I would reconsider taking part.
I would avoid events promoted directly as a way to win clients. These attract most of all people who will try to sell you something, and at the same time deter valuable participants who might want to show up at the meeting.
Ideally the organizer shares the list of participants. Then you can glance at the profiles, locate the people you feel like talking to, and even make contact before the event.
The open question technique
We are all the most interesting topics of conversation to ourselves. Everyone is going through something, has experiences and thoughts they want to share. Instead of asking standard closed questions like “what do you do?” or “is this your first time here?”, replace them with open questions.
At the beginning you do not yet know the person. The question “what is your greatest passion?” may sound strange. Try something more contextual:
“What, of everything you heard today, caught your attention?”
“What made you decide to show up at this event?”
When you manage to open the conversation, ask further questions that let the person expand. If you leave them space, they will naturally want to talk about something they find fascinating. From their perspective the conversation will be interesting, and you will be remembered as an interesting person.
After a conversation conducted this way, people realize that they have actually learned nothing about you. They even grab you by the arm and ask: “So what do you actually do?”. Here an answer built on the principle of Simon Sinek’s golden circle works great: first why you do what you do, then how you do it, and only at the end what the result of your activities is.
I once met a professional networker who, even when the conversation concerned the snow cover on an Alpine glacier, could in the second sentence redirect it to the ergonomics of office furniture, in which he was an expert. If you act similarly, people will avoid you.
Building a network of contacts: the power you already have
Each of us meets people as we go through life. Some in school or university days, some in workplaces, on projects. Most of them will probably never become your clients, but there are certainly those among them who have experiences, thoughts and stories you can learn something from.
We often fall into the pigeonholing trap. Did you once see an acquaintance make a complete fool of himself at a party many years ago? That image probably stayed in your head. The contact broke off, and the image remained. During that time, however, this person may have changed a great deal. They may have experiences and thoughts completely different from yours. How do you know it is not precisely them who will lead you to the missing piece of your business puzzle?
Reaching out to such a person is not the same as chatting up total strangers at networking events. You already know this person. You have a shared history. Even reaching out after years, you are reaching out to someone familiar.
If you look at your own development, you will probably conclude that the significant leaps happened thanks to specific people. Someone recommended a book that changed your way of thinking. Someone told you about a journey that opened their eyes. Someone else told you about a company with a business model you had never thought of before.
Before you start investing time in getting to know completely new people at networking events, consider refreshing the contacts you already have.
Summary: how to approach networking wisely
Networking as the only tool for winning clients will not let you take the company to the next stages of growth. But as a source of inspiration, energy, new perspectives and opportunities that are hard to plan in advance, it can be really valuable.
Focus on growth and on meeting people who can contribute something to your life and business. Look for opportunities to be helpful, not only opportunities to sell.
The value of networking does not come from collecting business cards or pushily promoting your offer. It comes from genuine interest in the other person, readiness to listen and being helpful without calculating what I will get out of it.
Frequently asked questions about business networking
Is networking a good way to win B2B clients?
Networking can be one of many prospecting channels, but it is not a way to predictable and scalable B2B sales. It relies on randomness and coincidence. Even if a whole group of networking acquaintances works for your referrals, you will never know how many clients, when and what kind will appear. Companies that want to grow beyond a certain level need a sales systemthat works independently of luck.
What is the difference between a business relationship and trust in the context of sales?
A relationship means you know and like someone. Trust means you believe that this person will deliver the right results to you. People buy from those they trust to solve their problem, not from those they like. You can have a great relationship with someone who will never buy from you, because they see no value in your offer.
How not to be a pushy salesperson at a networking event?
Instead of promoting your company, ask open questions and give the other person space. People are most interested in themselves. Questions like “what, of everything you heard today, caught your attention?” open a conversation much better than “what do you do?”. When the other person asks what you do, answer by starting with why you do what you do.
Do networking groups such as business breakfasts make sense?
At the very beginning of a business they can be a way to build a first pool of clients. One of my clients grew his company this way to hundreds of thousands in turnover. But when he bet on more systematic B2B sales, within two years he increased revenue tenfold and left the group. It is a tool that has its ceiling.
How do I build a network of contacts if I am just starting?
Before you start looking for new contacts at events, consider refreshing the ones you already have. Friends from university, from former workplaces, from projects. People change. Someone you did not appreciate before may now have experiences valuable for your business. Reaching out to someone familiar is easier than chatting up strangers at a conference.
Which networking events to avoid?
Avoid events promoted directly as a way to win clients. These attract most of all people focused exclusively on selling, and at the same time deter valuable participants. Before registering, check whom the event is addressed to. If the organizer cannot precisely define the target group, it is worth considering whether taking part makes sense.
This article is based on episode #7 of the podcast Droga Przedsiebiorcy (in Polish), in which I discuss the topic of networking more broadly in the context of building B2B sales.
