Choose Your Referral Marketing Group Wisely....

In September of last year, I created a new company focused on helping small businesses with e-mail, text and social media marketing.  This presented an interesting challenge as we had moved from an area where I knew hundreds of people to a new area where I knew no one.  My family and I relocated from Detroit, Michigan to Fort Worth, Texas.  There's quite an interesting story behind WHY we moved, but you'll have to call me for that....  The main thing was that my wife, Gail, was hired by Power Service Products in Weatherford, Texas.  I knew that starting in a new community would be challenging, but I had acquired some important experience about marketing with the business I owned in Michigan. 

I knew that cold calling in a new community would be time consuming, difficult, and would bear little fruit.   In Michigan, I belonged to a robust chapter of Business Networking International (BNI), and knew that if I could find a similar one in Texas it would be great way to establish new relationships here.  The group in Michigan averaged about 35 members and included a doctor, chiropractor, 5 different attorneys, handyman, photographer, chocolatier and many more!  We met each week to learn about each others businesses and exchange leads.  This group accounted for about 5% of my annual sales, and was easily the best return on investment of any marketing dollars I spent.  

I believe that BNI is a good foundation because it has a formal structure to each meeting and a number of key elements that encourage each of its members to get to know the others.  These elements are:

1. Unique seat within each chapter - There is only one person from each specialty in a given chapter.  Only one tax attorney, one accountant, one promotional products person, etc.  You become the "go to" person for that specialty within the chapter, and competitors are barred from joining.  
2. Application Fee and Annual Dues - These go to support the BNI organization which includes oversight and mentorship of the chapter along with a robust website that better enables members to interact.  People understand that they've made an investment into the group, and that should you not take full advantage of it, you are wasting time and money.
   
3. Attendance Requirements - Everyone is expected to be there every week.  The only way to get to know people is to meet with them on a regular basis.  Missing a meeting is like missing a sales meeting at work, and when someone's not there it means missed opportunities.
   
4. Opportunity to teach your sales staff each week - Everyone has an opportunity to "ask" for new business, and they should attempt to make it as specific as possible.  This helps to guide others to think about people and places that might be good referrals that they haven't thought of in the past.
   
5. Encouragement to meet for 1to1 Meetings - Members are encouraged to meet with you to have a deeper exchange of what each company does and their philosophies.  These are treasured appointments, and would be very difficult to come by through cold calling.  The referral marketing process only works when people know each other better, so they are not only willing, but anxious to meet with you.
   

When I first joined a BNI chapter in Michigan, I had never heard of it before.  I visited one chapter, but they accepted a competing company the week that I first visited, and they encouraged me to visit a different chapter.  I ended up joining the second one I visited, and it worked out great.  In Fort Worth, I approached it differently and visited 4 different chapters before deciding on which one I wanted to join.   Every chapter has its strengths and weaknesses, and it's important to understand how those can affect your membership.  

These are the strengths I found in the chapter I joined:

1. They followed the program.  When you attend a BNI meeting anywhere in the world, the steps you follow should be the same.  This is a proven model for success and if a chapter decides to skip certain aspects of the agenda, then you are not getting the full value of your investment.
2. The chapter had more than 30 members.  Many chapters in and around Fort Worth have 20 to 25 members, and if a few people are missing, then there can quickly be only 15 people at your meeting.  This decreases the amount of potential people you're reaching out to with your sales message.  A larger chapter generally indicates a strong base and commitment of the people that are there each week.
3. The chapter meets in a prestigious location.  The weekly meetings are held at Colonial Country Club.  The conference room has a much different feel to it then meeting in a side room of a fast-food place.  This will be far more impressive when attempting to recruit new members in the future.
4. The chapter has a history.  This is another area where I was spoiled in Michigan having belonged to a chapter that was formed 25 years ago.  There were a number of founding members still in the group, and they provided a strong base from which new people could learn how to maximize their return on investment.  The chapter I joined was formed over 4 years ago, and has matured well.  Other chapters in the area had recently re-formed after folding.  Being a part of a new chapter can be exciting, but I think this is more suited to established businesses in the community. 
5. The number of people absent when I visited was minimal.  Since attendance is so critical, it's important to note how many people are missing when visiting a chapter.  Even at 10%, the numbers can make a big impact.  If the chapter only has 20 members, and there are 4 people absent, then 20% of your potential sales force is unaccounted for.

While this article focuses on BNI, I think the concepts can be applied to any referral marketing group.  There are others that have a similar model of allowing only one person per specialty, but it's important to consider the other elements to gauge how committed people are to their success and to the success of the group.

If you'd like to find out more about my referral marketing experience, please feel free to contact me.