Eliminate the HIGH COST of cold market business development by having your own community of REFERRAL PARTNERS……
When most people network, they traditionally join industry-related associations and meet people at monthly gatherings. They also sponsor events, serve on committees, attend conferences and trade shows, play golf and host business get-togethers of all kinds.
These networking methods work well for most business people. They can expand their circle of influence, personally market their company and services and develop new business.
That said, one very effective networking method to increase business development is often overlooked: strategic referral groups. For business people interested in having more clients and building more business, being a member of a strategic referral group can be very beneficial.
A strategic referral group should consist of people who do not compete with each other.
These groups are typically made up of motivated business owners, professionals, consultants and salespeople from complementary (non-competing) businesses who target the same or similar markets and clients. Within the group, members have clients or customers that could benefit from services of the others. And each member is well positioned to recommend their fellow members’ services to their clients and contacts.
These groups are a great source of word-of-mouth referrals as everyone in the group agrees to refer each other as the first person to go to for that particular product or service.
These groups meet regularly with the unabashed purpose of helping each other get business. Groups usually meet monthly, but some meet every two weeks or even every week. The professional and focused “climate” in the meetings provides a forum for effective networking and all the benefits that networking brings. In most groups, members agree not to discuss confidential client information and expect non-confidential matters discussed in meetings to remain confidential outside the group.
Members continue to network in between the group meetings by scheduling one-on-ones with each other. Over time and by getting together for breakfast, lunch, dinner or coffee, sitting and talking, and finding out about each other’s business, families, interests, goals, etc, intragroup relationships are further developed and nurtured.
A strategic referral group works best when there is mutual respect between members.
Through rapport, trust and confidence in one another, the group members refer clients to each other, form strategic alliances, promote each other’s company and products, share business opportunities and marketplace intelligence and discuss common challenges and issues. In addition, they learn sales and marketing skills from one another and learn a lot more from each other’s “not-so-successful” ventures.
It’s in members’ best interests to actively promote each other as it keeps the group working as an all-encompassing word-of-moth marketing machine.
Using the group for leveraging each other’s connections, experience and advice and resources saves members business development time and money and provides a superior alternative to attending yet another sales course or reading yet another how-to book on marketing.
A strategic referral group can help you and your business succeed better and faster than you can on your own.
Membership in each group is limited to just one person for a particular type or category of business so that intragroup competition (for business), which would inhibit collaboration, is avoided. And groups are small with a maximum of about ten people to encourage members to invest the time necessary to get to know each other personally and to understand each other’s business, target markets and the value they bring to their clients ― which ultimately results in more leads, referrals and new business for all members.
People often think business networking is about continually meeting as many new people as possible. Influence, advocacy and a strong word of mouth reputation are NOT built in this way. They are built by investing time in building relationships and making the right friends in business. It is these small groups of friends that get you access to the people you want to do business with.
Being a member of a strategic referral group is like having your own personal business development community ― a team of seasoned business professionals who are, in effect, your marketing department and sales force. By working together, the group members can reach a level of business development that could never be achieved alone.
Here are three examples of strategic networking groups:
- Financial Services: Financial planners and advisors, investment planning, estate planning, lawyers, accountants, business and personal insurance agents, private and business bankers, mortgage/finance broker, real estate specialist, recruitment specialist, industry related association representative, industry-related publication editor/journalist/opinion leader.
- Business Services: Marketing consultants, advertising agents, office equipment vendors, insurance agents, business brokers, mortgage/finance broker, bankers, accountants, lawyers, printing services, motor vehicle management, chamber of commerce/business association leader, technology firm.
- Construction Services: A commercial real estate company, an architecture firm, several types of engineering firms, builders and construction companies, a demolition company, a technology firm, a legal firm, a landscape design firm, an interior designer and other related industry consultants.
Every industry has its own entrepreneurs, professionals, consultants, salespeople and opinion leaders who can provide one another with good leads, referrals and introductions and generally help each other get business.
As you identify and recruit members to be part of your strategic networking group, you should always filter your candidates based on the following question: “Would I feel 100 percent confident referring my best clients to this person?” If a potential member of your group can’t pass this test, then don’t even consider inviting them in.
Here are a few more of my ideas and strategies to make your strategic referral group successful:
- A strategic referral group consists of people working in harmony, trying to achieve by giving a bit more than taking.
- A strategic referral group should consist of people who are roughly at the same level of business success.
- All members of the group should explain their motive for joining and their expected outcome for becoming involved.
- All members should make it a priority to attend meetings.
- Trust is the foundation. People recommend, refer and endorse those they trust. You’ve got to invest time in building relationships with the other members of your group.
- All members should take the time to meet with each other 121 outside the group meetings to build understanding and trust. (Limit the chit chat at these meetings. Focus the conversation on the services each of you provide, what problems each of you solve and for what people and the typical results each of you tend to achieve for your clients….And stick to your appointments with each other. Think of your 121s as you would an appointment with your best client. Would you cancel on them?)
- Appoint a facilitator to keep the meetings on track. Elect one member to lead and conduct the meeting. It should be a different member each meeting. The leader has an informal responsibility to make sure that the topics and agenda stay within its parameters.
- Equal smarts. Everyone should feel they can contribute and everyone should feel that they can benefit. If one person is contributing all ― and not benefiting at all ― they will leave sooner rather than later.
- Give an idea. A strategic referral group is about is about sharing and giving. The more ideas, leads, referrals, introductions and opportunities you bring to the group, the more your group members will be compelled to give these things back.
- Come prepared. Keep in mind you’re there to help members succeed and prosper and should come prepared (with an idea/success tip or two) to contribute to the group rather than take from the group. It’s every member’s responsibility to bring “gold” to the meeting.
- Give more than you take. I’m a giver by nature and find that when I give more than I take then I receive more than I expect. This especially works in a strategic referral group where several people can be grateful for your contribution and instead of getting one in return you will get many in return.
- Optional. Each member is charged with bringing a guest — another business owner or a decision maker if the guest is from a larger business.
Having to make cold calls is the price you have to pay for not having a network.
What is the natural strategic referral group for YOUR industry? Who should make up YOUR community of cross referral partners? If you’re interested in having more clients, building more business and moving beyond cold calling for prospective customers, this kind of networking should be a key component, if not the driving force, of your business development marketing efforts.
Don’t forget to grab a copy of my simple and easy-to-read guide “Making The Most Of Your Business Networking Conversations” and it will show you how to turn networking events into real business−building opportunities.