Self-Taught MBA: Small-Scale Network Marketing
The techniques of network marketing can help you get jobs when you need them. I’m not talking about pyramid schemes. Rather, about leveraging the small network of personal and business relations available to every member of your company, much as network marketing relies on a salesforce that ends up only selling a few products to a handful of clients–mostly family and close friends.
On several occasions during a thirty-year career I have faced sales slumps. I find value in tapping every level of my organization, from partners to cleaning crews, for ideas on how to improve every aspect of our business. So when sales slow down, I call everyone to a meeting. I lay out the situation, and then invite every individual in the company to engage in a freewheeling conversation about how we can generate leads.
This meeting often goes astray, and usually does not lead to many great ideas. I hold the meeting on Friday, and totally off point, I conclude the meeting by becoming very serious. I lay out the situation again, and ask everyone to come Monday at 10 a.m. to address the group again, one at a time, with their ideas for generating work. I let them know their jobs depend on it.
Your Employees Will Surprise You
You’ve probably heard advice about tapping your subcontractors for sales leads, and this is certainly a good idea. But I have not had as much success with subcontracts generating leads as employees. I have been surprised with the contacts my employees have in the community, many of which I would have had no access to. This is especially true within minority communities.
In 2007, when work really dried up, my Vietnamese bookkeeper lead us to a large project building a Buddhist temple. Through an Iranian project manager, I learned about a neighborhood preferred by the Iranian community, and bought four lots there. It was during a severe recession, and I got the land at a good price. We built four homes and sold them to Iranian families just as quickly as we had hawked homes in the good old days.
It Can Get Weird, but Profitable
Most recently, I tapped my employees for areas for business expansion. One of our technicians (and the second lowest paid employee in the firm) had once worked for a company that erected and repaired radio antennas. Radio antennas?
On Monday morning, following the Friday afternoon set-up meeting, this low-level tech came to work with a serious expression that contained a well of enthusiasm. He was trying to keep his cool, but it was obvious he really wanted to tell us something. When I saw he was bursting, I said, “Okay, Carlos, I know you’re dying to tell us what you came up with, so please do.”
Carlos had not only showed up that day with just an idea, he had showed up with a job for us. Over the weekend, he contacted some of his old clients at several taxi companies. Taxis use radios, and many companies in a small city about three hours away still operated on an old, two-way system made obsolete by digital technology. Carlos figured these companies would need to upgrade, and maybe now that times were better, a few would be willing to, if we offered a very good price. Of three old clients he called, all were happy to hear from him, and two were interested in getting a proposal.
Carlos then spoke with his friends in the business, including his old boss, and told them he wanted to setup his own antenna tower and radio receiver division in the company, and if they would sign a contract, he could get a promotion. They all offered to help him, and by the time the Monday meeting rolled around, Carlos had a cost breakdown, and a bid with a client ready to sign a tower construction contract if I approved the price.
Carlos had only marked it up 30% and I felt uncomfortable going into a whole new line of work with a narrow margin. We lost that job, but through Carlos’ network and a revised pricing structure, we landed a job with the second company. It turns out radio towers and antennas are fairly straightforward construction with expert subcontractors for every phase of the project. Some tower companies are traded on the New York stock exchanges, so it’s no slacker business.
Eventually even the original client circled back and admitted that our price, as quoted by Carlos, had been suspiciously low. As long as we had a “better” price than the competition, he promised he would give us the job.
Two months later, we have three antenna construction contracts and permits processing, and a new line of business. Carlos stands to make some extra money on commissions, and he now heads our new, “Tower Telecommunications” division.