Business Development Through Online Networking

Business networking serves many purposes: general marketing, sales prospecting, recruiting, job-hunting, knowledge exchange, and business development. Of all these, business development is the one that it supports best. In fact, business development and business networking are closely related.

While literature on developing business relationships has existed for centuries (Benjamin Franklin wrote extensively on the subject), the concept of “networking” became popularized in the late 1980’s and into the 1990’s with the publication of books by Donna Fisher, Susan RoAne, Harvey Mackay, and others, and the growth of networking groups such as Business Network International (BNI).

Recently, “business networking” has developed some negative connotations for many people, due to its widespread use in the network marketing industry and the proliferation of “lead generation clubs” or “lead exchange clubs” that focus on impersonal lead referrals, rather than on building relationships. The surge in popularity of “social networking” sites on the internet, though, has sparked a renewed interest in meaningful discussion and research on the value and importance of “networking”, particularly to mainstream businesses.

So why are business networking and business development so well suited for each other?

  • Business development is often a low-risk or shared-risk proposition. We are constantly bombarded with marketing messages, and as a result, we put up defenses against anything that smacks of someone trying to sell us something. Try as we may to overcome it, there is still a “hunter-prey” undercurrent to many sales situations.

    Business development, on the other hand, is about partnerships. You are rarely “sold” in a business development context—there is much more of a sense of coming together, exploring whether or not the relationship may be mutually beneficial, and working together to make it so. The risk proposition is much lower than in a sales situation. Sometimes the only risk involved is that of issuing a joint press release announcing the relationship. Neither company has to invest anything other than a small amount of time into the relationship until an appropriate customer opportunity arises. And even in strategic relationships that require more effort and expense, there is almost always shared risk and a strong sense of partnership.

    This makes business development much “safer” in a business social situation than selling or marketing are. Suggestions of possible partnerships don’t set off the automatic defense mechanisms that trigger when we detect that we are being sold or marketed to. It’s always easier to talk about a partnership than a purchase.

  • The relationship is an end, not just a means. In sales, for all the talk of “relationship selling”, the ultimate objective is still a sale. Satisfied customers buy more products and refer other prospects, but success for the individual salesperson is usually measured in sales, not relationships. For the business development professional, though, the relationship is an end, not just a means, i.e., that signed contract and joint press release mean that you, individually, have accomplished something. You continue to work with that partner to achieve other objectives for your business, but the relationship itself is your primary objective.

    This again fits well with business networking, in which it is essential to see relationships as an end, not just a means. By building relationships with relevant and influential people, you will receive more support in achieving your business objectives, but often, the long-term benefits of a specific relationship may be unclear at the outset. The focus needs to be on the relationship itself, not just the short-term objectives you may achieve with that person.

  • Business development is opportunistic as well as strategic. You probably have a focused list of specific companies you want to partner with, or perhaps of specific types of relationships you’re looking for, but business development is as much about exploring what’s out there and how it potentially relates to your company as it is about meeting the specific objectives you have defined. You have to be constantly on the lookout for new products, services, and companies that would be complementary to yours.

    Heightened awareness is also a key skill in business networking. Not only do you need to be on the lookout for opportunities for yourself, but also for opportunities to connect others based on a mutual interest or pairing someone with a need with someone who can fulfill it. In 2001, the company I was working for did a multi-million-dollar merger that started with a Yahoo Group conversation. Neither of us were looking for that specific transaction, or even aware of each other’s existence. But by simply being in the right place at the right time, and being aware of the conversations taking place and how they related to our companies, we were able to initiate a very large deal.

Business development and business networking are closely related, and networking is a key skill for your success as a business development professional.

But what about online networking? Can people really develop trusted business relationships over the internet? And are these new social networking sites actually helpful in identifying and building those relationships?

In a word, “Yes”.

If you work for a large company, chances are that most of your business development activities are not local, and it is very likely that you already do a substantial portion of your business development work via e-mail and other internet technologies. Business travel has dropped significantly since 2000, down an estimated 15%. Reduced corporate profits are one driving factor, but the Travel Industry Association’s 2003 Domestic Business Travel Outlook (www.tia.org/Travel/TravelOutlook/041603.asp) reported that nearly half of all business travelers used technologies such as teleconferencing, videoconferencing and web conferencing to conduct business instead of taking a business trip by air in 2002. That number is, of course, growing.

Odds are that you’re already using these technologies yourself, and undoubtedly, you’re using e-mail. So, what do these online business communities offer beyond what you’re already doing?

  • Leverage of existing relationships. Social network visibility sites, such as LinkedIn, Spoke, and Zero Degrees, give you visibility into your existing relationships. If you have a large personal network, it is likely that you know someone who knows the specific person you’re trying to reach, or perhaps someone at that company. The challenge is figuring out who that person is. If your direct contacts participate in these systems, then you can easily identify which of your current contacts can provide you an introduction to the individuals and companies you wish to approach.
     
  • Focus. Opportunities to interact face-to-face with large numbers of decision-makers in your target industries are probably few and far between—a few conventions a year and perhaps a professional association or two. But online, you can be highly focused in your interactions, as there are niche communities for just about everything you could imagine. Want to connect with CFOs and other senior financial executives? Knowledge management experts? Open source software developers? There are focused groups for all of these that will allow you to connect with the right people for your needs without a lot of irrelevant “noise”. You can also immediately search for and locate people in a particular industry, role, and/or company, which is impossible to do in face-to-face and even one-on-one e-mail and telephone interactions.
     
  • Increased reach. In person, or even in one-on-one e-mail, there is a practical limit to how many people you can meaningfully connect with in a given amount of time. But in an online community or weblog, you can carry on public conversations, potentially reaching hundreds or even thousands of people with the same effort as a single e-mail. For conversations that do not need to be confidential, such as a discussion of market trends or of companies and products in a particular market segment, a public discussion will increase visibility for your company and provide additional assistance in identifying your potential partners and connecting with them. Your entire network becomes part-time business development staff for your company.
     
  • Reduced time and expense. Networking online allows you to reach more people with less effort; to more quickly identify and connect with the right people; and to reduce travel time and expense, both locally and long-distance.

There are many, many web sites available to those who wish to explore online networking. How do you select the appropriate ones for your business objectives and get started?

  1. Clearly define what you have to give and what benefits you expect to receive from online networking. This may sound obvious, but it is a critical first step. In order to focus, you have to know what to focus on. Requests for support and connections are most effective when they are extremely specific. Who do you want to connect with? What roles? What industries? And what do you have to offer? Think not only in terms of your business development objectives, but other assets—your contacts and expertise. Write it all down—you’re going to need it later.
  2. Join some of the general-purpose business networking sites. This will get you familiar with the practice and help you start making some connections. Some of the best ones for business development purposes are:
    AlwaysOn Network
    Ecademy (or us.ecademy.com for U.S. residents)
    Eliyon
    ItsNotWhatYouKnow
    LinkedIn
    Ryze
    Spoke Software
    Zero Degrees

    For more guidance on selecting the appropriate sites for you, visit our
    Guide to Online Social Networks, Social Software, and Business Communities.

  3. Create a profile — Remember, much of the benefit of online networking is that much of it is passive networking—people can learn about you without you having to be directly engaged with them. In order for that to work, you have to set up a profile that attracts connections and gives people enough information about both you and your company to determine if you might be a good connection. You don’t have to write your life’s history, but you should provide details about your recent professional history and interests, as well as personal interests which you are willing to make public and use as a basis for connecting.
     
  4. Participate — These online communities don’t work unless you work them. You can’t reasonably expect to derive value from your participation unless you are also willing to create value. Watch for opportunities to contribute your expertise to the public conversation, or to make connections between others, just as you would want others to do for you.
     
  5. Focus — Identify the niche communities where the people you want to meet are active. If you are able to do this at the outset, you may want to skip step 2 above. But your best avenue for finding these niche communities is to connect with some of the people in that target group in the larger, public networks, get to know them, and then find out where else they connect. Many of the niche communities will not be highly visible as “networking” sites—in fact, they may just be e-mail discussion lists and hard to discover through search engines. You find out about them by knowing the right people.

It’s worth noting that online networking doesn’t just take place in “networking” sites any more than face-to-face networking only takes place at networking events. The interest in social networking technology by analysts, investors, and members has certainly increased the interest and activity level, but like many other technology trends, its popularity may fade. The practice of building business relationships online will not, though—in fact, it will increase in popularity to the point that it is no longer considered a separate practice, but an integral part of business development strategy.

The explosion in both memberships in these sites and press coverage of this phenomenon in the past few months indicate that this technology is getting ready to cross the chasm this year. The early adopters of the practice will be the ones who are best positioned to take advantage of that growth, which makes now a good time to start.

This article was originally published in the Business Development Institute newsletter.