Power of the referral

When money flowed freely in the Emirates, professionals didn't need to rely on networking. But these days, those with strong contacts can have a clear advantage.

DUBAI, UNITED ARAB EMIRATES, Mar 29 : Claire Fenner, Co-founder of Heels & Deals during the Get Connected networking event held at the Address hotel in Dubai Marina in Dubai. (Pawan Singh / The National) For Personal Finance. Story by Lizzy
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When money flowed freely in the Emirates, professionals didn't need to rely on networking. But these days, those with strong contacts can have a clear advantage. Did you hear about the man who told his neighbour about the best place in town to buy Venetian blinds? His neighbour passes on the advice to his colleague, who in turn tells his sister-in-law. Consequently, the man selling Venetian blinds boasts that most of his orders come through word-of-mouth recommendations. So much so that he can now reduce his advertising budget to almost zero. That's just one example of a thoroughly tried and tested method of generating business: networking.

There was a time when reputation alone was the staple of every tradesman worth his salt, long before marketing strategies introduced billboards, radio spots and websites. Fast-forward to 2010, and here in the UAE the practice of networking and referrals continues to be polished and moulded into fine art. This week, Business Network International (BNI), a worldwide federation of individuals from every walk of life, hosted Get Connected at The Address Hotel in Dubai. It was billed as one of the largest networking events to ever take place in the UAE. Hundreds of people packed the hotel's auditorium, eager to improve their bottom line. The approach seems to work.

Last year, the 25-year-old federation, which has eight chapters in Dubai and one in Abu Dhabi, generated US$2.3 billion (Dh8.44bn) in transactions worldwide, according to the group. That figure certainly justifies the Dh4,000 lifetime membership fee. Bijay Rajnikantt Shah, the director of the UAE federation of BNI chapters, says sticking together can help make business interests a bit more recession-proof. "The bottom line is contacts means more contacts," he explains. "Members must also be accountable to each other and commit to meeting each week to pass on their contacts."

Mr Shah says the proof is in the pudding. Last year the group, which has 250 members, generated more than 8,000 referrals, yielding an impressive Dh50 million in business. Group members are encouraged to announce the monetary value of a business transaction made as a result of a referral. In addition, there are no two people of the same profession in any of the nine chapters in the UAE, which rules out any competition conflicts. For example, there can be only one dental hygienist in any one chapter, but another person in the same profession can join a sister chapter in which there is no competition.

Varsha Sirnani is a firm believer in the power of networking. An assistant sales manager for ETA Star Property Developers, Mrs Sirnani, 26, says marketing has taken a 180-degree turn in the post-boom years. Networking has become a reality of business. "Only a few years ago we would set up stalls at exhibitions halls and expect business to come to us," says Mrs Sirnani, who was born and bred in Dubai. "Now there's more focus on networking and helping clients find solutions to their residential and property needs."

Similarly, Clive Power says he has learnt the hard way how to streamline his marketing. After setting up Power Tutoring in December 2006, an educational tutoring centre in Knowledge Village, he hired a sales team and invested in print advertising. Based on his experience, magazine advertisements did little to help generate business, and he was disappointed with the return from his sales team. Six months later Mr Power, 38, joined the BNI, and doing so completely changed his approach.

"By letting other members know what you do and what you're looking for, they in effect do your marketing for you," he explains. "I have significantly reduced my advertising spend and no longer need a sales team. "Nowadays around a quarter of my clients come through referrals." Mr Power, who is from the UK, says he has generated Dh120,000 in business through referrals in the last 12 months. But he's keen to point out the referrals do not replace traditional advertising - they complement them. "I'm now much more selective about which magazines I place adverts with," he adds.

On the other hand, Sean Dolphin, a former BNI member, has yet to be convinced of the full merits of networking. Mr Dolphin, 33, moved to Dubai from Ireland two years ago to join O2 Public Relations, a pan-Arab consultancy. He soon joined BNI, but found most members weren't the kind of clients he was looking for. "However, in saying that, it was worth joining, as they acted as a gateway to a new business," he says. Mr Dolphin, who now runs The Dynamic Zone, a company offering personal advice to high net worth individuals and management training, remains unsure whether rejoining the BNI would benefit his new venture. But he remains open to persuasion.

"There's a lot of commercial and financial sensitivity in my work, so I might have a problem speaking openly about what I do." For others, the art of referral is key to keeping ahead in tough times, as Claire Fenner, managing editor of Easy Living, a parenting magazine based in Dubai, explains. "I launched the magazine in 2008, possibly the toughest time, and have two revenue streams solely from advertising, one being print and the other our website," Mrs Fenner, 34, says. "Through networking, I haven't had to make a cold call since last May, as all my clients have been passed on to me."

Originally from the UK, she is not just a member of BNI, but also the co-founder of Heels and Deals, a networking group for female entrepreneurs that launched last April. In November, Heels and Deals hosted a speed networking event that drew around 600 women to the Atlantis hotel in Dubai. Borrowing the concept of speed dating, members are seated in rows of chairs and given precisely two minutes to exchange contact details and pitch their idea to the person opposite.

Mrs Fenner says feedback was so "overwhelming" that the group plans to host a similar speed networking night later this year. So is networking merely another way to schmooze? No, says Philip Bedford. He has made a business of teaching people how to get the most out of their networking efforts. As one of the organisers of this week's Get Connected event, he is a strong advocate for the benefits of this collegial practice.

Indeed, Mr Bedford, who is from the UK, wears two hats; he is one of the regional directors of BNI, and he's also a franchisee for The Referral Institute, a company that offers a 12-module training programme designed to help individuals and companies generate steady business through referrals. "Referral-based, word-of-mouth recommendation is the ultimate sales programme," he explains. "Put simply, it's a method for getting other people to do your marketing for you - for free."