The Network effect – for your personal growth

B2B, compounding, Networking, relationships

If you search Wikipedia the network effect is how the value of the good or services increases with the number of participants. Companies which operate on this kind of a phenomenon grow in value exponentially. Think Amazon. The more the participants on the market place that they have created, the more the customers whose needs will get fulfilled and they will buy more, more often. This is positive feedback loop with more consumers on the marketplace, more the people who will want to sell on the Amazon Marketplace. The growth of these kind of companies is exponential.

In case of B2B having connections with people and keeping relationships alive is a big positive. While social media helps getting connected to people, it does not help build relationships. So while I may have a 1000+ connections on Linkedin, my relationships would be very limited.

You build relationships by giving first. By doing that you invoke the reciprocity principle espoused by Robert Cialdini in his book Influence. What is however even more important, is to keep the relationships alive. People keep moving. They changes places, they change jobs. When they do that, they get connected to more people. To emphasise the value of your individual network, Joe Polish runs Genius Network which is a network where super successful entrepreneurs network and master mind.

The more people you know, the more people who fall into your network. I have had introductions to people because of my relationships that I cultivated over years. Those connects in turn helped us get even bigger, because now there were more people who got connected to us and invited us to work with them. Such people who can connect you to such major influencers can change the trajectory of your business completely. The more pf these kind of people you form relationships, the more influencers you get connected to indirectly.It was typical to the definition of the Network Effect I spoke about earlier. This kind of exponential growth is compounding over a period of time.

You have to however be patient. “Rome was not built in a Day” applies to building relationships as well. Also not everyone you “give first” will reciprocate and you don’t know the timeline when they will reciprocate, if they ever will. But you keep doing this work on a consistent basis because when the critical mass is reached, there’s a sudden explosion in the kind of business you can grow.

Till next time then.

Carpe Diem!!!

Return on Relationships

Business, Partners, relationships

Relationships are all about building bonds which are generally based on trust. Once people start trust you, they also open up and share things with you. As the trust grows, the bonds grow stronger and people start wanting you to also succeed.

Return on relationships is a concept I learned from Dean Jackson. He’s one of the most fundamentally sound people and can cut through the problems and reach the core reason extremely quickly. You can listen to his podcasts on Morecheeselesswhiskers.com or Cloudlandia or Ilovemarketing.com. He talks about return on relationships from the vantage point of how many customers come back to you for more and refer other customers to you.

My concept of partnerships or “riding the elephant” are all about relationships at the core. Nothing in business moves if you don’t build relationships. How good your relationships are is measured by the fact if you get a lot of your business with repeat customers or you get referred a lot to different people.

There used to be a saying – its not what you know but who you know that is important. There has to be an extension to that statement – its not what you know but who you know, who is willing to refer you, that is important.

So you may have a lot of connections on social media platforms like Linkedin, but if they are not willing to refer you, then they are unimportant. The onus of getting people to refer you is your responsibility so that you program them to think about you when they come across something in which you excel. Getting referrals on a consistent basis is the best way to get business, because you don’t have to invest your time in convincing people to look at you.

Have a look at how much of your revenues are happening because of business coming in from the cold versus repeat customers and customers that have been referred. The lower the first part the more profitable your business.

Till next time then.

Carpe Diem!!!

Force multiplier effect of Riding the Elephant

Affirmative action, life time value, Marketing, Marketing Stamina, Networking, Partners, relationships, Riding the elephant

While I keep writing about this concept, I am amazed myself by the amount of benefits that “riding the elephant” can have for you, if you nurture the elephant well. The elephant is very loyal and friendly creature if you take care of it and feed it with bananas. But if angered it also tends to go o a rampage and destroy things.

So if you nurture the elephant then while you can take 5 small steps, it can take one large one, so if you are riding it, you can cover a larger distance through the forest versus on foot. Also other wild animals won’t attack you when you riding the elephant.

Some of this is also true with hitching your bandwagon with a large partner (like an OEM) your market reach expands at an amazing speed. These large companies have massive growth agendas so they have big plans to execute and go out in the market. Once they start trusting you they will also take you along with them. You will need to do networking within these companies. Being large it is difficult to navigate through the matrix structure, but if you are determined, and take affirmative action you will be able to find your way. It may take time, so you need to have marketing stamina to last in the market.

As a small company you may not have the bandwidth to fund that kind of a growth, but with the help of the partner you can actually get the volume of business to fund your growth.

There’s once challenge though. Since the partner wants to grow rapidly they will expect you to comply with their demands in terms of the margins you make. These situations you have to manage delicately. What can help is knowing the life time value of a customer. So you know how you will make money from the customer in the long term.

If you know how to manage relationships, this is one of the best ways to grow your business.

Till next time then.

Carpe Diem!!!

Relationships make a difference

books, life, relationships, Sales

When I was starting out in sales I read a book – What they don’t teach you in Harvard Business School. It was authored by Harvey McCormick. I was very impressed with the achievements that he mentioned in the book.

I have forgotten most of the book, but one sentence that has stayed with me has been – All things being equal people buy from friends, all things Not being equal they still still prefer to buy from friends.

That one statement keeps ringing in my mind from time to time. It has been a guiding statement whenever I interact with anyone.

I try to ensure that I make long term relationships by being straight and upfront in whatever interaction I have with people. Not only with prospects and customers but even with vendors and everyday people.

When you build these kind of relationships you can be sure that you can pick up the phone and call people when you want and they will also answer your phone. Also because you have dealt straight with these people you aren’t scared when connecting with them.

Its also similar to the philosophy of giving first that Joe Polish talks about. When people trust you and know that you will be transparent in your interactions, they are also open to interact

Does that mean that I have not been tricked and taken advantage of because of this philosophy, absolutely not. But the amount of times I have been duped is way smaller than the amount of times the relationships have helped.

My advice would always be to play the long game and build relationships which can last you a long long time.

Till next time then.

Carpe Diem!!!