This is a guest post by John Corcoran of SmartBusinessRevolution.com.
Like many new entrepreneurs, I made a lot of dumb mistakes right after I started my business.
I worked too long hours. I neglected my family. I spent too much time on stuff that didn’t matter.
Most significantly, I knew the importance of spending time nurturing relationships with new potential clients and referral partners, and so I threw myself into networking. I went out to lunches and cocktail hours, met people for coffee, and attended chamber of commerce mixers and get-togethers.
The problem was all of these efforts really started to add up. It was a bad financial habit, and the costs quickly started to spiral out of control.
The cost of acquiring new clients was far too high to sustain. If I had been on Shark Tank, they probably would have kicked me out of the room.
I have made my share of bad financial decisions in the past, so I knew I needed to do something.
Like many things in life, I knew I needed to take a long and hard look at myself and my spending patterns. As Jeff wrote in his great new book Soldier of Finance, “you will find that getting to the real root of your current situation in life requires honest reflection.”
At the same time, eliminating all networking would have been short-sighted. Like Jeff, I depend on referrals, and networking is important to maintaining a consistent referral business. So I couldn’t cut out these costs entirely.
I had to cut back, but the question was where to start. Unfortunately, there was no “one size meets all” solution. I’d have to prune my budget with a scalpel, not a machete.
Here's how I did it.
Get Creative With Cost-Cutting
Before I explain how I reduced my networking costs without sacrificing relationships, I want to tell a story about how I met Jeff, because I think it illustrates a good point.
We actually met through that modern day virtual water cooler – Twitter. We exchanged a few messages and shared a few things for one another.
We both quickly realized how much much we had in common. We shared unusual backgrounds (he’s a soldier-turned-financial planner-turned-author; I’m a political aide-turned-attorney) and we’re both active bloggers and podcasters.
We also both married up. : )
Normally if I live in the same community as someone, then I will suggest getting together for a cup of coffee or lunch somewhere in between both of us.
Since Jeff lives in Carbondale, Illinois, and I live in the San Francisco area, “meeting in the middle” would have meant Colorado.
Mandy would not have been too happy if Jeff had said “honey, I’m running out to get a cup of coffee – in Denver.”
So, rather than passing up the opportunity to make a deeper connection, we made an appointment to get together anyways – via Skype. We set a time that was convenient, then got together for a virtual cup of coffee.
I mention this story because it’s a perfect example of how to save money with networking. The tool we met through, Twitter, is 100% free. Your only investment is your time.
And even though we couldn’t meet face-to-face for a cup of coffee, we leveraged a free tool to get the next best thing.
Necessity is the Mother of Invention – 10 Ways to Slash Networking Costs
As I started to get creative with ways to reduce my networking costs, I found many of the means of reducing networking costs are actually just better practice, overall.
Eating out less frequently is healthier. Using free social networking tools has helped me meet more people, faster. Going to fewer organizations’ monthly meetings means I can deepen my involvement with the organizations that are the best use of my time
To help you keep your own networking costs in check, I created a list of 10 ways you can cut out networking costs that are unnecessary, reduce your costs, or use no-cost alternatives.
Of course, every industry has different customs and norms, so not all these tips will work for every type of job position or business. But these ideas that have worked well for me.
1. Cut Out Gifts. The best gift you can give a client or a customer is to do a good job and to give them good customer service. For people who refer business to you, I find your money is better spent on taking the person to lunch rather than on a physical gift. That way, you get 60 minutes of getting to know one another better, which deepens your relationship. (If a lunch isn’t possible, then at least get creative with your gift-giving.)
2. Cut Out Membership Fees. There are plenty of organizations that I’d love to be a member of, but I really only attend a few of their events per year. I prefer to just pay the slightly higher admission fee for non-members to attend their individual events than to pay an annual membership fee in exchange for a slightly reduced admission cost.
3. Go to Coffee Instead of Lunch. Meeting someone for an inexpensive cup of coffee isn’t all that different from meeting someone for lunch, except it will set you back $2-3 instead of $20. Your networking partner may even appreciate the lesser commitment of meeting for coffee instead of lunch. That is, as long as the person you are meeting up with isn’t obsessed with a particular lunch spot.
4. Show up Early to Coffee Meetings. You know that awkward moment when you meet someone for coffee, and you both end up at the cash register at the same time and you feel kind of obligated to pay for their coffee (and maybe pastry too)? There are times when it’s appropriate to buy someone’s coffee, and there are times when it’s really not necessary.
If you want to avoid this from happening, show up early. Buy your coffee before the other person arrives. You can then say you showed up early “to grab us a table,” and you’ll look like you were just being considerate. (We’ll know better, but it will be our little secret ; ) ).
5. Take Advantage Free Social Networking. Of course, networks like Twitter, LinkedIn and Facebook don’t cost you a dime (except for the time you put in), so take advantage of them. I wouldn’t be writing this for Good Financial Cents if it weren’t for them.
6. Look for Groups with Fee Waivers or Reductions. Some organizations may waive their admission or membership fees if you volunteer a certain amount of time at one of their events, or volunteer on a board or committee. If these organizations have regular networking mixers that would be useful for you, then perhaps volunteering would be a good use of your time.
7. Go for a Walk. Rather than meeting for lunch, meet for a walk in a park, or around a less busy and less congested neighborhood. A walk can be a nice change of pace from more traditional networking meetings over coffee or lunch. Plus, you get some exercise.
8. Meet for a Virtual Cup of Coffee Over Skype. As Jeff and I demonstrated, you don’t need to live in the same city to get together for coffee. In just the last few weeks, I have gotten a virtual cup of coffee with people who lives in Salt Lake City, Chicago, and Tampa, Florida.
9. Ask Your Employer to Cover It. For some jobs, like sales jobs, employers will naturally allow you to expense a meal with a prospective client. Even if you are not in sales or your employer doesn’t automatically allow you to expense meals, you may be able to convince your employer of the value of your networking anyways.
10. Double Down on Existing Groups. Often people think the solution to getting more clients is joining more organizations. I prefer a different approach. If there are organizations you belong to which are good sources of relationships and new clients, try deepening your involvement. Join the board, or a committee, or offer to organize an event. You may find the extra time devoted to these groups is time well spent.
If you implement just a few of these suggestions, you can continue to benefit from the power of networking, without spending money unnecessarily.
What suggestions do you have for saving money on networking? I’d love to hear them in the comments.
P.S.: If you are interested in more tips on networking, I have a new, free 50+ page ebook for Good Financial Cents readers called How to Create Your Personal Networking Plan which I think you’ll love.
John Corcoran is an attorney and former Clinton White House writer who writes about business networking and entrepreneurship at SmartBusinessRevolution.com. For more networking tips like these, you can download his free ebook, “How to Create Your Personal Networking Plan.”