Last week Alain Gervais, one of my readers called me to ask me the difference between networking and referrals. He had been  successfully generating referrals and wondered if he was missing something. By the way I love to get feedback from my readers, and love to hear about successes you are having. This kind of feedback makes this task worthwhile.

I explained that like referrals, networking is a powerful business tool that every business owner should use extensively. However networking is more about establishing relationships with people you can count on for referrals to useful contacts or for helpful advice. So networking is a strategy for generating referrals, but that is not its only purpose. Networking takes practice and focus, and is a vital but free business development tool, that is often overlooked and under-estimated.

When I first arrived in Canada, I knew no one and spent much of my time building my network, today I know hundreds of people I can turn to for quality advice, referrals and interesting perspectives when I am testing new ideas. Although sometimes it is hard to quantify the benefits of networking while you are doing it, I believe networking has been one of my most important business building activities over the years.

StreetSmart Marketers know that networking is not a numbers game, but an opportunity to spend quality time in a meaningful conversation with people who can help you and whom you can help in return. Don’t fall into the trap of trying to meet as many people as possible at an event, but rather spend quality time with a select few.

Networking is very definitely a two-way street, you must focus on helping others meet the kind of people they need to meet as well as having them introduce you to people you want to meet. Whenever you part company with a networking partner, make a point of asking, “How can I help you?” or “Is there anyone I can introduce you to?” When asking for referrals, make it easy for people to help you, by being clear about the kind of people you want to meet and why it would be beneficial for them to meet you. This way you won’t leave people guessing what you want.

If you do a lot of networking, remember to keep good records. Bill Clinton recently told the New York Times that for most of his life, one of his final tasks of the day was to make a 3X5 card for each person he had met that day. On the card he would write all the relevant contact information, along with other important information including how and where they met, and any other information he had gleaned from that contact.

If it is a discipline the President of the United States found valuable to keep track of the people he met, it is something we should all do with every contact we meet. Building your database, may provide you with one of your most valuable business assets you own. What’s more it costs nothing to do, but can return huge benefits over the years. Instead of using 3X5 cards, this task can easily be achieved with a good contact manager program such as ACT, Maximizer or Goldmine. Don’t try and rely on your memory. As your database grows, it becomes impossible to remember everything about each contact.