Steps to Networking – Step 65: Return on investment

Written By Rick Frishman Published April 12th, 2010

STEP 65: Return on investment

In selecting which groups to join or events to attend, analyze whether it is a smart investment of your time and resources. Hellen Davis, President of Indaba Training Specialists, Inc., and author of the 21 Laws of Influence, is one of the most successful networkers we know. She graciously contributed the following gems when we interviewed her for this book.

Davis says, “I only attend organized networking events if I can anticipate a 500% return on my investment (ROI) – for the cost of the event and most importantly – for my time. I learned early in business that networking events can be expensive, especially when you’re first starting in business or are on a limited budget. And I learned that the cost of the event has to be factored in as ROI”, Davis said. “If you’re weighing whether to go to one event that costs $50 or another that is $250, determine which should return a better ROI. Just because an event is inexpensive doesn’t mean that you will get a better ROI. It might be more advisable to spend the extra money and attend the more expensive event rather than two or three less costly networking affairs.

Hard costs

Hard costs are your purchases. What type of hard costs should you factor in? In calculating hard costs, include the price of admission, parking fees and transportation expenses such as gas, vehicle and maintenance expenses. In addition, to get the most out of events, you must well prepared. So purchase all business materials that are appropriate to properly prepare you for the event. Calculate all of the above expenditures as hard costs.

Soft costs

Soft costs are the opportunity costs and the cost of your time. Focus on the soft costs by asking the following questions:

• Is attending this event the best use of your time?
• Who do you hope to meet?
• Do you have a realistic expectation of doing business over either the short or long term?

If you earn $500 per day and will have to spend four hours at the event, your return from attending the event should be – at the very least – $1,250, plus the recovery of your hard costs.

Calculation

At $500 per day, four hours of your time is worth $250.
$250 x 500% yields a ROI factor of $1,250.

If you plan to stay in business, be realistic and select the events you decide to attend by calculating the anticipated ROI. Ask yourself, “Is this the best use of my time? Can I get a better ROI if I spend my time networking elsewhere?”

(Excerpted from NETWORKING MAGIC: Making Connections That Will Change Your Life By Rick Frishman and Jill Lublin With Mark Steisel)


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