Small business marketing today is moving from an advertising driven paradigm to one based on networking, connecting, relationship building, and reviews and referrals. Consumer goods better have great reviews on Amazon, and service businesses better have great reviews on Yelp. Then you have review platforms on Facebook business pages and Linkedin, too.
All of those systems are passive. Sure you can work them, try to optimize them, even spam them, but they all require that the customer find you through search.
Proactivity, on the other hand, relies more than ever on face to face, or at least text/email relationship building. There are plenty of folks trying to sell small business on the idea that this can be done through Linkedin prospecting, Facebook video ads, or Instagram storytelling. In fact, I’ve made a good living and helped my clients use some of those tools to excellent results over the last decade or so. You should be using them.
But almost every small business owner or rep I talk to says the same thing. They either need to go door-to-door or else do some form of organized networking. Some of the possibilities include:
- Chamber of Commerce Events
- Service Club membership
- Trade shows and local pop up booth events
- Business Referral Networking Groups.
All of the above hold their own special charms and can work if they are worked hard and with great intentionality. For this post, however, let’s take a deep dive into the world of Business Referral Networking organizations.
Can You Make Money through a Business Referral Organization?
The following are my recommendations for choosing the right group. But first allow me to tell you a few things that will influence my position. I have been a member of three different groups, have attended meetings of the largest group, and have written about this type of marketing in at least two of my business books. So, yes! I believe this is a solid way to generate new business with a very reasonable investment of time, money, and energy.
I am also currently a director for E-TEAM, a brand new division of TEAM, one of the largest referral networking organizations in the US. However, I think you will see that this position is not causing any bias as you review the methods for selecting the right group.
How to Choose the Right Business Referral Networking Chapter
You see, I’m going to focus on the chapter, not the parent organization. So here are the criteria I would use:
1. No less than 15 active members. No more than 35. Some very large groups are very successful, but you rarely have time to give a presentation of your business. Less than 15 is usually a club in distress that is on the way to folding. The exception would be one that is growing under a solid leader.
2. Check before you go as to whether your category is taken or compromised. Some chapters will go to great lengths to divide up categories, so they get everyone to join. You benefit if you have more breadth.
3. When you attend, pay attention to the protocol. All such groups insist on using good networking approaches during the 15 minutes or so before the formal meeting starts. Are the members standing up and actively networking? Do you get greeted by one or more members?
4. Check the membership as they give their 1-minute elevator speeches. Are there power partners for you in the room? In other words, are their individual members who share clients with you? E.g. Real Estate Agent, Mortgage Broker, Handyman, Escrow Company.
5. Now listen carefully to see how much business is being passed. The rule of thumb is four referrals per member per month. So, in a room of 15, you’d expect around 15 referrals to be passed. If less than 5 outside referrals (non-member referrals) , you need to at least ask some questions.
6. Always check two or three groups before you decide, unless you are there because of a strong recommendation or unless the chapter is obviously super strong and perfect for you.
This has been a serious problem and may still be a problem in your neighborhood. I was a part of such a group. It was a really good group, friendly and doing business. Unfortunately, I wasn’t getting a single usable referral. To be 100% honest, the first week I was given a power partner referral that turned out to be golden. Then nothing.
A New Kind of Business Referral Group Is Launched - B2B Only
I happened to get into a conversation with the CEO of TEAM Referral Networking, Kelli Holmes. We discussed my problem. She said she had a solution. A new kind of chapter where all the members were B2B. Essentially this meant that every member of the group was a power partner for every other member.
I attended a local chapter and found the difference to be amazing. The payroll guy, the merchant services gal, and the website developer all had exactly the same client profiles. So did the business broker, the commercial printer, and the business banker.
As I looked around the table at the commercial realtor, the business coach, and the commercial photographer, I realized that every single person could basically hand over their customer and prospect data base to the person next to them, and they could just start calling that list. But instead, the merchant services rep had spoken to their bakery customer about the payroll services guy, and the baker was expecting a call.
The result of that meeting was a decision to partner with TEAM and become a director for this new kind of B2B only referral group. We call it E-TEAM and were opening them throughout Southern California at this time, with plans to expand nationally soon.
We are actively building clubs in the Inland Empire, the Eastern portion of LA County (Covina/Pomona/Diamond Bar) and Northern Orange County. Our plans are to begin organizing additional chapters in DTLA, San Gabriel Valley and WLA in the Fall of 2018.
If you would be interested in joining a chapter of an E-TEAM B2B Referral Networking Group, please call Randy Kirk at 310-910-1848 or email at Randy@TeamReferralNetwork.com. We are also looking for individuals who would like to help build a chapter in their area. For more information please visit SoCalMasterMinds.com/team
Top categories for E-TEAM
1. Payroll service
2. Staffing company
3. Commercial insurance
5. CPA and/or bookkeeper
6. Commercial photographer
7. IT managed services
8. Website/social media
9. Commercial Printer
10. Sign makers
11. Merchant Services
12. Business Lawyer
13. Commercial Realtor
14. Graphic Artist
15. Promo Products
16. Charitable organization
18. Supplemental Insurance
19. Security alarm installer
20. Buildout contractor
21. Commercial HVAC
22. Guard service
23. Business Broker
24. Business Consultant
25. Business Coach