Looking to join a business referral group? Read this first!

Looking to join a business referral group? Read this first!

Copyright 2006 Mike Klassen - Klassen Communications

Chances are you've heard about business referral groups like LeTip, Business Network International and others.

Basically, only one member of a given occupation can be in a chapter. In other words, if I join a chapter as a graphic designer, that chapter cannot have any other graphic designers as members.

Joining one of these groups is often recommended to people as a way to build business referrals. For a time, I was member of one and did enjoy it. But there are some things to keep in mind before you join any type of business referral group.

If you're targeting a specific chapter, visit as many times as possible before signing up. Normally they allow you to attend twice for free. Whatever they offer, see if you can squeeze out one extra free visit. You want to watch how the group operates and how seriously they take what is usually a weekly commitment to attend meetings and bring in referrals.

Pay very, very close attention to which members show up and which don't. If you're a member and not coming, you're supposed to get someone to sub for you. Some members will be too lazy to do it and that's bad for you. After all, that's your "sales force" and a low number of members each week isn't a good thing.

Also, are the subs members of other local chapters of the group? That's good because then they can spread the word about you in their chapter if there's no conflict with a person doing what you do in that chapter. You can also visit their chapter if they don't have someone who does what you do.

If you have a choice between multiple chapters in your area, ask the vice-president in each chapter for statistics like attendance, referrals given and referrals received. They track that and if they don't want to give you that info, run away. You want those stats to be able to compare which chapters actually produce results for their members. That's kind of hard to do in only a few visits. By looking at the stats over a number of months, you get a better picture of how they operate.

Of the people who show up, how many actually hand out a referral, how many give a testimonial and how many just say "pass"?

If you don't have a referral to give, you're supposed to give a testimonial...something positive about another member. For example, "I referred a client of mine who needed tax help to Samantha. The client called me this week and was thrilled with how Samantha took the time to visit his office and answer every tax question he had." But some members won't say anything other than "pass." That means they don't have a referral, a testimonial, or even something useful in general to share. Those members aren't going to work very hard for you.

Who in the group would be your "power partner"? This is the person (or people) who has a natural relationship with your type of business. For example, the real estate agent and the mortgage rep are going to be great for each other, but perhaps no one else.

Where is each person's referral coming from? The mortgage person getting a referral from the real estate person is too easy. You want to see what sort of referrals are given between people who seemingly have nothing in common occupation-wise.

Now you need to ask yourself some questions. Do you know enough people to bring in quality referrals? I dropped out of my group for a few reasons. One was that my clients were starting to come from outside the area and it was harder for me to bring in quality, local referrals. I found I had less and less to contribute to the group.

Another reason to leave was that some members in my chapter were too lazy. It had become a weekly social time for them, not a place to do business unless it dropped in their lap.

And here's another reason...I found that the people in my chapter either didn't have connections with the type of clients I needed, or couldn't accept in their own mind what I charged. This was in the days when I was a freelance copywriter.

I remember giving my 10-minute promotional talk to the group and laying out for them what I charge. They were stunned. They had no idea rates could be that much for <gasp> writing. I knew at that moment it would never work out with that group. Their mindset was all wrong. They can't do a good job of convincing others to use you when they can't wrap their own heads around what you do and what you charge for it.

There's only so much education you can give them before you realize it's a lost cause.

I'm not down on business referral groups. When it works, it works extremely well. In fact, I've heard and seen some amazing stories about how well it can work.

But it's not just a matter of showing up and hoping for the best. There are many things to consider before you join in terms of what you can contribute and what others in a specific chapter will be able to offer you. Take the time to investigate thoroughly!

About the Author: Mike Klassen runs Klassen Communications, providing layout and design services for direct market clients. Visit: www.mikeklassen.com He also maintains the Freelance 101 Blog at freelance101.blogspot.com/

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