How a Private Equity Fund Uses Social Media for Building its Investment Pipeline and Raising Capital

12/6/2010 by

 

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Most private equity funds (and the equipment finance industry) are well behind the VC industry with regard to their use of social media. Jeff Bussgang, General Partner, Flybridge Capital Partners, calculates that of the approximately 1,000 venture capitalists in the US actively seeking deals, 10-15% blog.  Sarah Tavel, Senior Associate, Bessemer Venture Partners, calls this blogging and posting of internal analyses "venture capital’s freemium model."

 

We think that increasing numbers of private equity investors will devote more energy to their social media efforts. Private equity investing is a relationship business, and the only relationships that really matter are with the relatively small number of LPs, entrepreneurs, executives, and intermediaries.   As more of our personal relationships move online, social media becomes a very cost-effective way to strengthen a firm’s corporate relationships.

 

Among the few PE funds with an outreach in social media I would include Duane Street Capital, 2xPartners, Healthpoint Capital , and Riverside Company. Another I recently learned about is MCM Capital.  Bobby Kingsbury, Business Development Officer, MCM Capital Partners, was kind enough to provide a case study of his efforts in this area. I interviewed him via email:

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Q. What is your social media strategy?

 

At MCM Capital Partners we have implemented Facebook, LinkedIn, an RSS feed, and a weekly blog into our website in order to promote our brand, increase search engine friendliness, expand our deal referral network, and enhance relationships with those already in our network. Additionally, we are tactically using social media tools to augment our communications to our current LP’s, prospective investors, entrepreneurs operating businesses within targeted industries, investment banks and intermediaries.  Each communication method employed and its content is viewed through the lens of "how does this help our firm" and "how does this improve the likelihood someone will find us?"

 

Although we are still learning the intricacies of social media, we have been making extensive use of social networking sites to announce LBO transactions, promote our blog and email newsletter, recruit and evaluate potential CEOs for portfolio companies, as well as develop and create new relationships within the M&A community.  Concurrently, we are using our blog to help with search engine optimization, place new contacts into our CRM (Goldmine), and to differentiate ourselves from other firms in our industry by providing value added content to our website.

 

For SEO purposes, we chose to focus on searches on the following terms: micro-cap private equity fund, leverage buyout, Cleveland based private equity, lower middle market, leverage buyout firm, management buyout, etc. We chose these terms based on relevance and by researching our SEO rank on each search engine, then targeted those keywords in which we ranked in the top 100.

 

We chose to use the top 100 because it was an achievable goal. Given our time budget of 1 blog post per week, and given that it’s most important to be on page 1 of Google (slots 1-10), we thought that moving from slots 100 and below to slots 1-10 was much more doable than moving from slots 101 and above. The largest behavioral jump, measured as a percentage-change, is from the top of page 2 to the bottom of page 1. According to Chitika, a search based online advertising network, going from the 11th spot to the 10th generates a 143% jump in traffic, proving a very small percentage of users click through to the second page while searching online. Ultimately, we want our website to be ranked in the top four for these terms, as the top four terms in a Google search account for 70% of all web traffic.

 

Here are a few of the steps we have taken:

 

Weekly Blog:

 

Embedded in our website through WordPress, we started a weekly blog about four months ago. We use our blog to help with our search engine optimization, automating the addition of new contact information into our CRM, as well as providing value-added content to our readers (LP’s, entrepreneurs, investment bankers, intermediaries, etc.). In regards to search engine optimization, we created 5 blog categories (Best Business Practices, Private Equity Related News, MCM Perspective on Macro Economic Conditions, Investment Perspectives, and MCM Specific News) relevant to our target audiences, as well as a list of at least 20 keyword phrases to be incorporated into our posts. After a blog is written, we use Friendfeed to automatically post the new blog to our company Facebook, Twitter, and LinkedIn pages. The RSS feed helps track new readers and automatically places them into our CRM after readers fill out the required information. In addition, in order to comment on a particular blog we have implemented a form. Visitors fill out the form and their information is again directly placed in our CRM, helping us manage new contacts and track new visitors to our blog.

 

LinkedIn:

 

We are in a relationship based business, and we need to leverage those relationships. Each of us have our own LinkedIn profile and MCM also has a company profile page. I have encouraged each of my colleagues to spend 5 minutes a week building up their network with value added contacts. In five minutes they can add 10 to 15 new connections, which increase our reach and will enhance current relationships. We have added a WordPress blog widget to each of our profile pages and our company profile page in order for our contacts to easily view each new post creating more top of mind awareness for MCM. Any updates or deal closings within our firm are also sent out to each individual and each group in our network through LinkedIn’s own weekly update email. Additionally, LinkedIn has become a great resource to grow our list of C-level talent for our future and current portfolio companies.

 

Facebook:

 

We created a Facebo
ok page for our firm where we post our acquisition criteria, MCM updates, current ongoing searches, recent blog posts, a calendar for visitors to keep track of important dates such as our annual CEO summit and shareholder meeting, pictures of portfolio companies, and we have also added a tab which allows visitors to sign up for our email newsletter under ‘Join My List’. Posting regular updates relating to our business and activities reminds our friends or followers who MCM is, what we do and either to use our services or refer one of their friends or colleagues who might be looking for an equity partner.

 

Monthly Email Newsletter:

 

We send out a monthly email newsletter using Constant Contact to over six thousand investment bankers, lenders, intermediaries, and current and potential LPs every month, keeping them apprised as to types of businesses we are looking for as well as any deal announcements or updates within our firm. We have placed links to Facebook, LinkedIn, and an RSS feed in our newsletter along with a link to each of our personal LinkedIn pages next to our name and email address. We also added a section at the bottom of the newsletter for blog post of the month to help promote our blog. After a newsletter is sent, we click on the LinkedIn, Facebook, and Twitter widgets on the top banner of the email and tweet it, Facebook Like it, and add it to our LinkedIn page in order to reach our contacts that may not have received the newsletter via email. Using Google Analytics, we have seen a dramatic spike in traffic to our site each month the day of and a few days after our email is sent, demonstrating the efficacy of the newsletter.

Email Signature:

 

Everyone at the firm has links to our RSS feed, LinkedIn, and Facebook accounts embedded in their email signature to help create more awareness and again drive traffic to the blog and our social networking sites.

Google Analytics

 

We have placed Google analytics into our website in order to monitor traffic, referral sites, keyword searches, unique visits, etc. I go over the statistics every month to see where traffic is coming from, where we rank with certain key terms, how long visitors spend on certain pages, and who exactly is coming to the website, in order to adjust our SEO campaign, write relevant blog posts, and provide value added content to our website.

What results have you seen so far?

 

While neither traffic nor time spent on our site is the true measure of efficacy of our social media campaign, it indicates we are increasing brand recognition and awareness. The real measure of success while we continue to develop our campaign will be transforming our brand recognition and awareness into an increase in deal flow, attracting new investors and talent to our firm, developing relationships with entrepreneurs in our target markets, and helping separate our firm from our private equity brethren. It is too early to provide definitive metrics on increased deal flow or inbound inquires from LP’s attributed to our social media campaign, but we are confident that social media will continue to play a huge part in the marketing success of our firm.

 

That being said, I will provide a few metrics we have been tracking since the inception of our social media efforts in July of 2010. Our deal flow increased by 150% in total from July to October, but we cannot say it was solely attributed to social media. Clearly there was pent up demand over the prior two years making it difficult to measure the efficacy of our campaign thus far. Further, we have only had two inquires from LP’s, but coming from a base of zero any number is a huge jump. Overall traffic to our site has increased 14% on average each month. Referral traffic, (traffic coming from other websites including our blog, LinkedIn, Facebook, and email newsletter) has increased 119% over the last three months, and visitor’s average time on our site has increased from 1 minute and 32 seconds to 3 minutes and 5 seconds.

 

Some other quick stats over the last 30 days derived from Google Analytics: we have averaged over 51 absolute unique visitors to our site per day (80% of our total traffic came from new visitors who have previously never been to our site), visitors averaged 3.75 pages per visit, and 69% of our visitors came from search engines (Google, Yahoo, and Bing), 18% came directly and 13% came to our site through our blog or social networking sites.

 

 

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Most of our traffic is from new visitors:

 

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Search engines are critical for our traffic:

 

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Q. What are MCM’s professionals’ policies on inbound LinkedIn inquires from:

 

1. people you don’t know at all

 

A. If we do not know a person, but are familiar with their firm and they are currently an employee we will accept their invitation. If we do not know the person or their firm we will check their profile and company’s website to see if we would have a mutually beneficial relationship and accept or decline the invitation accordingly. Complete strangers, when we do not know them and have not heard of their firm will always be ignored.

2. people you don’t know but want to know (e.g. potential LPs)

 

A. LPs or people we want to know who contact us will almost certainly be accepted. We will follow up with a note and try to schedule an introductory call in order to provide more information on our firm.

3. people you barely know (met once for 2 minutes) –

 

A. Same principle as with people we don’t know; we will see how much utility the relationship will have for our firm and accept or ignore the request accordingly.

 

We generally will accept invitations from most firms, as the contact or their network will most likely be beneficial for MCM. What most people do not know is that anyone can look at your network (with the default LinkedIn privacy settings) and then inundate your contact list, with inbound inquires unless you change your privacy settings. At MCM we try and protect our network contacts, and have changed our privacy settings so our con
tacts cannot view the rest of our connections list. We continually manage the privacy settings on our LinkedIn pages to prevent any leakage of personal information and limit access to LinkedIn users not in our network.

Q. Similarly, what are MCM’s professionals’ policies on inbound Facebook inquiries from people in the categories above?

 

A. I would say it is pretty similar to LinkedIn, but at the same time anyone can Facebook-Like our page so it is a little more difficult to manage the contact list on Facebook. I monitor the page a few times a week and receive a weekly email from Facebook updating me on our page activity. Here is an example of the weekly update from Facebook:

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Facebook

 

  

Hi Bobby,

Here is this week’s summary for your Facebook Page:

clip_image007

MCM Capital Partners

49 monthly active users clip_image00814 since last week

72 people like this no change since last week

1 wall post or comment this week clip_image008[1]1 since last week

63 visits this week clip_image008[2]20 since last week

Learn more about how to update via mobile

Thanks,
The Facebook Team

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Q. What tool(s) are you using to pull data in from your social media system into your CRM?

 

A. Each CRM has its own code for forms in order for contact information to be transferred into the database. Sometimes you can manip
ulate the form and other times you are stuck using what your CRM provides which possibly will not encapsulate all the data you are looking to obtain. We use Goldmine, and it was a challenging process to say the least.

 

Q. What is your policy on adding emails to your email database; do you add the emails of everyone you meet/who emails you, or wait for people to proactively register on your site?

 

A. We do not add everyone we meet or everyone who emails us, but we certainly do not wait for people to proactively register on our site. At the end of the day it’s a numbers game, and if we feel the person has an opportunity to add value to our fund they will be added to our database and sent our monthly correspondence, unless they unsubscribe.

 

Q. Who built your website?

 

A. Point to Point Inc., a Cleveland based interactive marketing firm has implemented our blog into our website and is in the process of transferring our entire site into WordPress. This will allow us to make changes ourselves in real time and also will allow me to control and adjust our SEO campaign as needed without having to understand or learn how to write HTML. The changes made are instantaneous and can also be undone if a mistake is made.

 

Q. What other tools/technologies are you using?

 

A. I have created an email archive page using Constant Contact in order for people to view previous communications we have sent. It’s also another way for someone to ‘Join our List’ if they receive the communication thru a social networking site.

 

Q. What steps are you taking for proactive marketing, as opposed to reactive marketing? Are you proactively reaching out to your viewers on a targeted basis?

 

A. Everything we are doing right now with our e-marketing campaign is proactive and we are reaching out to our viewers on a very targeted basis. We know our prospective audience uses search engines and social media sites to find relevant information, so we develop content (onsite and off) that is relevant to both the engines and the users. For example, we have a blog category entitled ‘Investment Perspectives’ in which we share our investment theses around certain industries of interest. The investment thesis gives MCM credibility and resonates with entrepreneurs and the intermediary community, as it illustrates forethought as to the types of businesses we are searching for in a particular industry. We realize with our e-marketing initiatives we are currently thinking a little outside the box given the dynamics of our industry, but I believe we will see a paradigm shift in the not too distant future in the ways in which PE firms market to the deal community.

 

Q. Are you soliciting directly to potential investors and targets who didn’t approach you? If so, how if at all do you use social media to make the cold call easier?

 

A. That is a very good question and one we have talked about internally as we prepare to raise our third fund in the coming months. We are planning to reach out to a number of potential investors and targets using LinkedIn. Sending InMail to potential LP’s with a brief introduction of our firm will break a lot of the ice and also help alleviate some of the awkwardness and unfamiliarity of a cold call. During the exchange of InMail we will be able to determine if our interests align with the prospective LP and proceed accordingly. Going forward social media will hopefully turn what used to be a cold call into a warm lead.

 

Q. How much time (launch and ongoing) and money has the social media initiative cost you?

 

A. We do not track time like a law firm, but the efforts spent to continue our e-marketing initiatives have been significant and are shared throughout our firm. It takes a total team effort to create, edit, post and continually update and monitor our blog, SEO campaign, and social media sites. I have been very fortunate to work with colleagues who understand the importance of our e-marketing campaign and have given it their full support. It has taken a lot of time and we had to learn how to walk before we ran, but I believe it will continue to be beneficial and pay huge dividends on a go forward basis. In the future I could see hiring someone full time solely to work on our e-marketing campaign, as four of our professionals collectively spend on average 15 to 20 hours a week on our social media outreach, depending on the time of the month.

 

Q. Some funds are concerned that increasing visibility will attract inappropriate deal flow, a deluge of job-seekers, and other people who want to suck up your bandwidth. How do you mitigate that cost of being more visible?

 

If we felt that the attention we were receiving was irrelevant or hampering our day to day initiatives, we would take steps to improve our process to make it more relevant to our desired audience. We have not had to deal with an influx of spam-like inquiries thus far, and truly do not anticipate it as we control our connections. Our goal through our entire e-marketing campaign is to gain relevant visibility, but I would be more than happy to spend a few extra minutes a day reviewing the inappropriate deal flow and deluge of job seekers as it means MCM is becoming more visible. It doesn’t hurt to spend a little time answering a few questions or sending an email with our acquisition criteria in order to prevent inappropriate deal flow in the future. You never know where that person may end up that is seeking a job or what deal that intermediary may show you next.

Filed Under: Chapter 26: Marketing, Chapter 28: Business Development

ACG InterGrowth, May 12-14, 2009–world's largest conference for deal industry

3/10/2009 by

I’m looking forward to attending ACG InterGrowth in Las Vegas, May 12-14, 2009. For those not familiar with it, ACG InterGrowth claims to be the world’s largest conference for the deal industry. We expect more than 2,000 middle market M&A professionals (excluding government-owned companies which are nervous to send their employees to Vegas). Participants include private equity professionals, investment bankers, corporate development officers, lenders, lawyers and accountants. The cost of registering goes up after March 16; to register, click here.

ACG was kind enough to invite me to give a keynote talk at the conference on “How to Win Clients, Originate Deals and Raise Capital Using Online Networks“. You can see a preview of the talk here.

ACG just launched a gated online community for their members. I’d welcome feedback from anyone who’s a member.  The ACG online network is going after a market segment that overlaps somewhat Angelsoft.net, Village.Albourne.com, and Finemrespice.com . In the world of investors in public markets, the closest comparables are FT Alphaville Long Room, SumZero, ValueInvestorsClub.com, and Village.Albourne.com.  For a list of online networks for traders, see SFO magazine.  However, unlike all of the competitors I mentioned, ACG has the advantage of decades of experience running a significant trade association.

As a general comment, there are relatively few examples of offline trade associations who have successfully built online networks for their members. For more on this, see Outsell’s report on Social Media in Scientific, Technical and Medical Information Part 1: Social Networking. ACG is aspiring to be the exception, and I look forward to seeing their success.

For anyone in the mid-market private equity world, this is one of the most important conferences of the year. If you’re going, please drop me a note via the ACG online network.

Filed Under: Chapter 28: Business Development, Events

How Lawyers Can Grow Billings Using Online Networks and Internet Marketing

1/10/2009 by

I’ve been engaged lately in several projects for attorneys and law firms, with the objective of expanding their business clientele through an online presence. Consider it “LinkedIn and Beyond for Lawyers.” An online presence — in social networks, blogs, webinars — has become more acceptable, even expected, for attorneys in the last few years.

  • LinkedIn, the largest networking site for professionals across industries, has over 750,000 lawyers and legal services providers with profiles.
  • The American Bar Association site lists over 5,000 ‘blawgs by lawyers.
  • Specialized communities are sprouting. LegalOnRamp is an online network exclusively for corporate general counsel to interact with each other and law firms; featuring more-than-cursory articles, a wiki to freely publish documents, survey results and industry data; and an active Ask the Expert section.

Where’s the benefit? The most common question for those starting to focus online is: “What do I get out of it? I created a LinkedIn profile but haven’t gotten any inquiries.” Of course, your results vary with effort. Consider a few common objectives:

  • You want to maintain contact with affiliates and other lawyers that will refer business to you. In this case, a profile for each professional, inserting the bios from your web site, is a good start on LinkedIn. Once these are published, you can request connections to your colleagues already on LinkedIn. Xing is a comparable social network emphasizing Europe and Asia and Plaxo is another recommended service with 40m subscribers, in which you receive updates about colleagues’ change of contact information. You can also publish quick thoughts or new to all your colleagues on these sites, which will complement regular emails and holiday cards. This assumes you have a solid electronic contact database. For this, Microsoft Outlook is a good start, with Microsoft Business Contact Manager or Avidian’s Prophet to enable contact sharing in a midsize firm, or Salesforce for a larger, multi-office practice (see this LinkedIn Question & Answer Chat about the best contact manager for a small to mid-sized firm). Creating your LinkedIn presence can take less than an hour in this minimal approach, with cleaning up your contact database being the major task. However, the result is that people who know and appreciate you will find you more easily, not that new prospects will seek your counsel.
  • You want prospective clients that are evaluating your practice to find a solid web presence. Here, you’ll want to polish your professionals’ LinkedIn profiles to include a bio written in an approachable first person. Change the standard “Ms. Doe is a patent lawyer representing firms of all sizes…” to include specialties (“I have worked extensively with both manufacturing and non-manufacturing technology entities, such as universities and the NIH“) and benefits (“I… help clients execute on strategies to leverage the value of their IP“). Then, add at least 20 links/connections to clients and colleagues; a photo and a vanity LinkedIn URL with your name, and have several clients publish short testimonials for your work (which you can propose in draft form and have them revise). This may take a few hours but puts you into the realm of credible online presence, beyond your web site.
  • You want prospects you’ve met to keep you in mind. For this case, minimally consider a quarterly e-newsletter with updates on law in their industry, and your publicly-known cases. One effective approach is to orient your content by industry of your client, rather than by legal domain — which few lawyers seem to do. A pharmaceutical client, a telecommunications company and an e-commerce startup use different language to refer to their intellectual property needs — one speaks of protecting an new product pipeline, another defending its technology and the third seeing a competitor copy their online brand. For them, it’s insufficient to state on LinkedIn that “I serve all industries” and leave it at that, or to write about patent /trademark activity across multiple industries. Free or for-fee webinars, or local lunches work well, as does joint presentations with complimentary service providers, such as a local private equity fund or networking association.
  • You want to solicit new business interest through your online presence. This is where substantial time is needed, because so many lawyers are attempting the same thing. Only a few per domain of expertise can break through the clutter, so you’ll want to strive for the frequency and depth of content that only one or two other firms can match when you search Google. You can accomplish this by writing white papers that help clients, or being the most frequent and insightful blog on a particular topic such as food and drug law, as well as a public speaker. Also, consider creative and even bold offers, such as Clock Tower Law’s offer of a free trademark registration for a startup. And combine online initiatives with local business development, such soliciting speaking engagements. One of my clients and I are working with a cost-effective outsourced service to find and monitor industry events for speaking opportunities, and having an executive assistant at the law firm propose the practice leader as a speaker.

Finally, be aware of how others are writing about you on the web. ZoomInfo compiles career biographies of anyone who has had a professional profile published on the web. Two lawyers I tracked shared first and last names (their middle name differed), but very different track records and some information had been confused between them by the automated system. You can fix this by claiming ownership about your data and correcting it. A site such as Vault.com lets prospective employees write about their experience with your firm. One firm I was tracking had a strong presence on Google, ranking 5th when I searched for “NY intellectual property law firm.”  Yet on Vault, the first comment to appear was from a paralegal job candidate who wrote “If you [even] speak English, they will hire you,”  and another candidate said “the place is in shambles.” Not an attractive situation!

In sum, it takes little effort to get online and stay in touch with those who appreciate your reputation. Actually building your reputation online takes more time, but there are intermediate steps that allow you and your firm to match your business development goals with time availability.

For more thoughts, see the powerpoint I’ve posted below about how law firms can grow their revenues with Web 2.0 technologies. This is an update of a presentation I made a little while ago to the New York County Lawyers Association.

How Lawyers Can Grow Billings Using Online Networks and Internet Marketing

View more presentations or upload your own. (tags: sales media)
Filed Under: Chapter 26: Marketing, Chapter 27: Sales, Chapter 28: Business Development, NextNY

Track your competition online

10/11/2006 by

Given Nitron Advisors is in a reasonably competitive industry, I’m very interested in tools like http://competitio.us/. The basic idea is that it’s a tool for companies (or investors) to keep track of their competitors’ actions and features.

I’m not sure it’s got enough differentiation to be a sustainable business, but as a customer, I like it.

Via Techcrunch

Filed Under: Chapter 27: Sales, Chapter 28: Business Development, Miscellaneous, Social Media Sites

Web 2.0 Has Corporate America Spinning

10/4/2006 by

As a followup on my Vistage presentations, here’s “What every CEO needs to know about the array of new tools that foster online collaboration — and could revolutionize business”: BusinessWeek: Web 2.0 Has Corporate America Spinning

Filed Under: Blogging, Chapter 03: Face-to-Face Vs. Virtual Communications, Chapter 12: Future of Social Software, Chapter 26: Marketing, Chapter 27: Sales, Chapter 28: Business Development, Miscellaneous, Social Media Industry

For Job-Hunters: How to Find a Contact Name Inside a Target Company

4/21/2006 by

For Job-Hunters (and Salespeople): How to Find a Contact Name Inside a Target Company

Job-hunters have a number of hurdles to surmount, but one of the greatest is this: how do you get a name inside a target company? When you want to send a letter of inquiry to a company (about a job), you really want to find the right person’s name, in order to contact him or her. If you can’t find the right person, you want to find someone who can put you in touch with the person you seek. Here are ten ways to find a name inside a company you are targeting.

More…

Filed Under: Chapter 25: Finding a Job, Chapter 27: Sales, Chapter 28: Business Development

Relationship Marketing and Business Development in the Professional Services Sector

11/4/2004 by

Notes on the Business Development Institute’s program

Building New Business With Breakthrough Relationships: Relationship Marketing and Business Development in the Professional Services Sector

Wednesday, November 03, 2004

Scott Allen and I spoke at yesterday’s BDI Institute program. Unfortunately, I could not attend almost any of the panels. However, my colleague Veljko Urosevic did take some notes.

Troy Waugh, CPA, MBA

CEO Rainmaker Academy.

  • People spend 80% percent of time training their hard (technical) skills while only 20% working on their soft skills.
  • Discusses the reason why clients leave:

7% leaves because price is too high. ( initially more then 7% says that the price is the reason, but research shows that only 7% really leaves because of the price)

15% leaves because of the technical quality of the service.

68% leaves because of Individual Treatment.

10% other reasons.

  • Talks about two different types of selling: selling products and selling services.

Selling

Products

Services

40%

Closing

10%

30%

Presentation

20%

20%

Needs

30%

10%

Relationship

40%

Total

100%

100%
  • Also talked about levels of relationship

Organizational at higher levels of relationship price resistance decreases

Partnership less competition

Transactional

Friendship

Quality Commodity At lover levels competition is fierce

Commodity

  • Waugh also emphasizes the importance of listening.
  • Compares selling with a waiter profession First part is taking the order, Second part is delivering

Third part is making sure customer is satisfied Fourth part is offering desert Fifth part is collecting the check.

( I am not sure was it Waugh or John Klymshyn that said that customer satisfaction is highest priority, and just upon delivering service and maybe it would be better to charge clients quickly because their satisfaction decreases fast once you helped them on an issue)

Marketing Roundtable:

(I do not have much on this).

Participants: Maxine Friedman; Managing Director, Corporate Global Services, CB Richard Ellis.

Craig Levinson; Director of Marketing and Business Development at Brown Raysman Millstein & Felder

Sally Glick, COM at J. H. Cohn. LLP

Kathleen Reichert, VP Global Marketing Communications, A. T. Kearney

K.R.

· believes that because of the tough economic situation relationship importance when doing business decreased. (not sure what she meant with this. To me it seems that in the tough market conditions when you are doing less business and under a tougher conditions you would be more careful to chose with whom you will do business: meaning that relationship importance increased)

· She also believes that formal training is not too effective.

· Senior partners at her company have to get involved in all aspects of the business and on mentoring younger staff.

They talked about the problem of losing business when big players (Rainmakers) leave the company.

Rainmakers are not open on involving other partners with their main clients, because they want to keep the big business for themselves, even though it would be beneficial to the company if other partners had access to the big clients.

John Klymshyn

Move the Sale Forward,

The main idea is that business communication, networking, and connecting with people is a learning skill. It is all about making the connection with people and clients. Not many people feel comfortable connecting and communicating with strangers but the most important part is that it is a learning skill.

· Also puts great importance on listening to others.

-his presentation was the best part of the whole conference. It is easy and interesting to listen to him. Easily gets the attention from the audience.

Rotational Table Discussion

I sat on two tables. First one was Larry Bodine. The topic was using as much as you can from events and conferences. His idea was that in order to get the maximum out of an event professionals need to get more involved: just being there is not the point. You need to take active role in groups and try to get a seat on the board of those groups. It will drastically increase your network; it will give you a chance for public speaking; you will have more information about potential job openings.

Although everyone agreed with Bodine’s point, the major problem for most people, especially for those from smaller cities, is finding the time or not having a group that is near the place where they live.

A possible solution to this, given by Bodine, was starting your own group.

Second table was Stowe Boyd,

· Talked about bloging and the increased importance of blogs.

· Blogs as a tool that is replacing standard media as a source of information. When asked by one person about the quality of information on blogs, truthfulness, and possible misuse for commercial purposes, he replied that he believes that authors of blogs are identifiable and that in the case of false information a certain blog would not be able to get any relevant exposure. ( I am not sure if I explained this as I wanted and if it makes sense)

CASE STUDY; BUILDING THE CASE FOR THE ALUMNI

Cem Sertoglu CEO. Select Minds

Debby Foster, Director of Alumni Relations and Sport Sponsorship at BearingPoint

BearingPoint started with a creation of an Alumni Network. They conducted both internal and external research to determine a potential value of an Alumni Program. Research focused on BearingPoint’s needs, on the experience of other firms, and on vendors to support their program (third party researchers).

All three sides in the analysis came to the conclusion that it is relevant to develop an alumni program.

· Alumni are seen as best source for business

· Lot of contacts and information opportunities to generate new business

· Alumni are great advocates for their former companies.

· Rehiring saves a lot of money. It is much cheaper to hire former employees then to train new ones; they also tend to stay longer on their job positions. Chance of a miss hire much smaller.

· It is important to offer something back to the alumni.

The BearingPoint experience with Alumni Program was great. The program repaid its investment and is able to sustain itself without outside financing.

Filed Under: Chapter 26: Marketing, Chapter 28: Business Development, Events, Social Media Industry, Social Network Research

Business Development Through Online Networking

3/18/2004 by

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.

Filed Under: Chapter 28: Business Development, Tips