How Many Referrals Do You Expect Per Month?

ID-10025778The number of referrals you should expect to receive is dependent on the type of business you’re in and the effort you exert to develop your network. Some professions receive more referrals than others.

For example, a florist is going to get many more than a real estate agent. However, the florist will have to sell a lot of flowers to make up for one real estate sale. Hence, the type of profession can somewhat determine a range in the quantity of referrals.

Having said that, however, the actual number that someone in a specific profession can get varies dramatically depending on their efforts to develop those referrals. This variation depends on how they “work” their networks. You remember the old computer adage “garbage in, garbage out”? It means that if you put bad information into the system, you’re going to get bad information out of the system. Well, one’s networking efforts are very much the same.

The results you can expect to get out of your efforts will be based on the quality of people you put into it. I recently conducted an Internet survey of business professionals in which I asked, “What percentage of your business comes from word-of-mouth or referrals?” Even I was surprised by the results. More than two-thirds of the respondents said they received 70 percent or more of their business from word-of-mouth. Only 14 percent said that referrals accounted for less than 30 percent of their business, and only 2 percent said they got no business from word-of-mouth!

Clearly, word-of-mouth and referrals are critical to the success of many businesses today. The question is, how do you increase it? First, consider professions that are part of your contact sphere. These are businesses that have a symbiotic relationship to yours. Contact spheres are the building blocks of your referral business because they help to build a solid base of repetitive referrals for you. Read “Developing a Networking Contact Sphere” for a more thorough explanation.

Next, you should diversify your networks. That is, you should participate in different kinds of networking groups so that you may have a diverse cross section of businesses and professionals as part of your center of influence. It’s important for you to understand that you must first build the foundation I speak of above before you can have high expectations for developing referrals. Based on research that I conducted at the University of Southern California a number of years ago, I found that the average participant in a strong contact network or a business development network (groups that meet weekly and allow only one person per profession, and whose primary purpose is to pass business referrals) generated, on average, 4.2 referrals per member, per month, or roughly 50 referrals per person, per year.

See Chapter 8 of my book The World’s Best Known Marketing Secret for additional information about the payoffs of networking. Please note that there are many intervening variables to this number. In my study, these variables included such things as length of membership, the profession they represented, the years of experience, the level of participation and more. One thing that didn’t seem to make a difference was gender. Both men and women generated substantially similar numbers of referrals throughout their participation.

To summarize, the number of referrals you can expect will vary depending on your profession and your efforts in the networking process. However, on average, I’ve found that many businesspeople can generate more than 50 referrals per year via their participation in a single networking organization. What makes this number truly significant is that most people would agree that a referred contact is much easier to close into business than other types of contacts. I believe this is the reason that so many businesses say they generate most of their business through referrals and word-of-mouth.

Referral Marketing: Know the Risks, Reap the Rewards

ID-100252028During a radio interview, the host of the program asked me whether I consider referral marketing the “safest” form of advertising. Without the slightest hesitation, I confidently answered, “By all means, no!” He was visibly shocked by that answer. I went on to explain that I believe very strongly in the tremendous benefits that referral marketing can bring. However, there are unique risks associated with referral marketing that aren’t an issue with commercials or other forms of advertising.

When you give someone a referral, you’re putting your own reputation on the line. If your referral partner does a good job, it enhances your reputation. But if he does a poor job, your reputation will likely suffer. As I said, the payoffs of referral marketing are immense—when it’s done correctly. But referral marketing involves a really big risk: giving away a piece of your reputation every time you give a referral to someone. When you tell a valued customer that a friend of yours is going to take good care of her, you must have confidence in that friend.

But what happens if your friend lets your customer down? It comes back to haunt you. Your customer begins to lose faith in you, and because of that loss of faith, you just might lose that customer down the road. This is why it’s so important to develop strong relationships with your referral partners. Once those strong connections are forged, you can rest easy, knowing that when you tell someone a business associate or a networking partner is going to take good care of him or her, that’s what will happen.

 

Networking Is a Marathon, Not a Sprint

The fact is, networking truly is a marathon of an endeavor–it’s most definitely not a sprint.  I have met so many people who practice what I call ‘hyperactive networking’ and they mistakenly approach networking at the speed of an all-out sprint–they want to be absolutely everywhere and meet absolutely everyone and they go, go, go ALL of the time until they soon inevitably burn out, ‘collapse,’ and give up.

It’s a real shame because if these people would, from the beginning, just slow down and take the time to develop a networking strategy and understand that networking takes time, patience, hard work, dedication, commitment, and endurance, they would be reaping great rewards from their networking efforts instead of exhausting themselves with nothing to show for it in the end.

Networking at its core is about taking the time to build genuine, trusted relationships.  Sure, visibility is important, but without building trust right along with it, visibility won’t get you very far in the long run.  You can run around all day long going to networking events and shaking people’s hands, but if you’re not spending time following up and developing trust with the people you meet, then you haven’t really achieved much of anything that will actually give you results from your networking efforts–do not confuse activity with accomplishment. 

So, what are your tactics for pacing yourself in the marathon of networking?  What actions do you take to strategically build relationships?  I’d love to hear from you so please share your thoughts and ideas in the comment forum below–thanks!

Classic Video: One Simple Rule for a Winning Approach to Networking

I have been doing video blogs for quite a few years now and a while back it occurred to me that some of the videos I’ve previously posted focus on timeless topics that deserve to be revisited and not buried way back in the video blog archive.  For this reason, I decided to occasionally feature a “classic” video blog from my blog archive and today I am sharing the sixth one–”One Simple Rule to a Winning Approach at Netwoking.” In this video, I talk to UK networking expert Charlie Lawson about the Networking Disconnect which commonly hinders the success of many who attend networking events and mixers.

Charlie explains that the Disconnect can be avoided all together by following one simple rule that will get your networking approach and intent geared in the right direction.  I’ll give you a hint–it involves big fish and coffee. 😉

After watching the video, come back and comment about your experience(s) with the Networking Disconnect (trust me, we’ve all had some experience with it) and what you think about the advice Charlie offers in the video . . . looking forward to hearing from you!

Being Your Own Chief Networking Officer


CNOIf you work in an organization, you might be familiar with the increasingly popular position of chief networking officer (CNO).  The CNO is the person who handles many corporations’ business networking and community-related activities.

The role or position of CNO has changed over the years.  In the past, the CNO could have been the person responsible for such things as running the computer or IT department, or for computer-related functions in general, because networking was thought of as a matter of electronic connection.  CNOs are still tech related, but these days we’re seeing many executives with that title in charge of completely different functions, handling business networking activities such as these:

  • Community Involvement
  • Internal & External Communication
  • Public Relations
  • Corporate Culture
  • Social Capital
  • Human Resources
  • Diversity
  • Client/Customer Relationships
  • Developing a Referral Marketing Campaign
  • Departmental Collaboration
  • Relationship Advertising & Marketing
  • Improving Vendor Relationships
  • Referral Generation Strategies

As you can see, a CNOs responsibilities can be broad and complex.  However, I believe the two key responsibilities to be: 1) relationship-marketing campaigns and 2) referral generation strategies.  These roles should be top of mind if you’re going to network like a pro.  They should be the principal job focus of a CNO.

First, however, let’s address the thought that’s probably just popped into your head: “Hey, I only have a ten-person (four-person/one-person) organization; how can I afford to hire a CNO to do my networking?

As business professionals ourselves, we remember what it was like trying to get a company off the ground.  And, quite frankly, there never seemed to be enough resources to take care of all the things the business needed, let alone hire an executive-level person.

What I suggest is to create a CNO position in your company and then fill it yourself, at least in the beginning.  In other words, don’t hire a CNO; just take on a CNO mindset.  How do you create a CNO mindset?  Start off by adopting a Givers Gain® attitude.  This gets you in the spirit of finding ways to help others while simultaneously overcoming the scarcity mentality that can creep into your thinking.  Lay out a clear set of guidelines and action items that you’d like the CNO to take, and then fill that position yourself for two or three hours a week.

 

5 Ways Your Network Can Promote You

I’m currently in Asia doing a number of speaking engagements and yesterday I had the pleasure of speaking at the BNI Japan National Conference.  Today, I’d like to share with you an excerpt from the speech I gave where I explain the following five ways in which your network can promote you:

  1. Display your literature and products
  2. Make announcements for you about your business
  3. Endorse your products and services
  4. Provide you with referrals
  5. Introduce you to people / arrange meetings on your behalf

5WaysSlide

This is content straight from my book Business by Referral and if you’d like to learn about the additional ten ways your network can promote you (which I share in the book but not in this video), click here for an article I wrote specifically on this topic. 

If you have any favorite tactics which you’ve personally found to be highly effective when it comes to putting your networking circle to work for you, please share them in the comment forum below.  Thanks!

Quantity Is Fine, But Quality Is King

Photo Courtesy of stockimages at FreeDigitalPhotos.net

Photo Courtesy of stockimages at FreeDigitalPhotos.net

One of the biggest misconceptions I’m aware of in regard to networking is the notion that it’s an “all you can eat” affair.  In other words, people go to an event, work the room in an effort to meet everyone there, and then judge their success by the number of cards they accumulate.  Although I see a certain superficial logic in that, there’s only one fatal flaw with this kind of thinking:  it assumes that the more people you meet at an event, the more successful your networking efforts are–and that’s simply not the case.  Instead, the quality of the connections you form is much more significant than the quantity of connections you make.

Businesspeople unfamiliar with referral networking sometimes lose track of the fact that networking is the means–not the end–of their business-building activities.  They attend three, four, even five events in a week in a desperate grasp for new business.  The predictable result is that they stay so busy meeting new people that they never have time to follow up and cultivate those relationships–and how can they expect to get that new business from someone they’ve only just met?  As one of these unfortunates remarked to me, “I feel like I’m always doing business but rarely getting anything done.”

I certainly agree that meeting new people is an integral part of networking, but it’s important to remember why we’re doing it in the first place: to develop a professional rapport with individuals that will deepen over time into a trusting relationship that will eventually lead to a mutually beneficial and continuous exchange of referrals.

When meeting someone for the first time, focus on the potential relationship you might form.  As hard as it may be to suppress your business reflexes, at this stage you cannot make it your goal to sell your services or promote your company.  You’re there to get to know a new person.  A friend of mine told me something his dad always said: “You don’t have to sell to friends.”  That’s especially good advice when interacting with new contacts.

This certainly doesn’t mean you’ll never get to sell anything to people you meet while networking; it does, however, mean that you’ll need to employ a different approach.  Networking isn’t about closing business or meeting hordes of new people; it’s about developing relationships in which future business can be closed.  Once you understand that, you’ll stand out from the crowd with everyone you meet.

When you’re networking like a pro and treating new contacts as future referral partners, you’ll absolutely blow away any competitors who still feel compelled to meet as many people as they possibly can.  Why?  Because when you call your contacts back, they’ll actually remember who you are and be willing to meet with you again.

If You’re Only Talking Shop, You’re Selling Yourself Short

Photo courtesy of stockimages at FreeDigitalPhotos.net

Photo courtesy of stockimages at FreeDigitalPhotos.net

People often think that networking is all about talking business and exchanging cards, but that’s a definite misconception.

In a networking group, you should talk about more than just business. A referral relationship is more than just, “I do business, you do business, let’s do business.” A much better approach is to find common ground on a personal level, then relate your business to it.

The longer I’ve been involved in networking, the more I’ve seen the power of personal interests in making connections. Networking is about building personal relationships. If you remove the personal from the equation, you limit the amount of business that can happen.

In one networking group I worked with, I introduced an exercise called the GAINS Exchange, in which people share personal and professional information about themselves. Two of the participants in this group had known each other for more than a year but had never done business. During the exercise, they discovered they both coached their sons’ soccer teams. They quickly became close friends and were soon helping each other conduct soccer practices. After a few months, they began referring business to each other–two guys who had barely spoken to each other the first year because they seemed to have so little in common.

By finding a common interest and starting with that, we can make connections that have a very good chance of turning into business. Try this strategy out for a while and then come back and leave a comment to let me know what your experiences have been–I’d love to hear about them!

The Greatest Referral of My Life

If you’re familiar with BNI, the business networking organization I founded back in the mid ’80s, you may be aware that this year is BNI’s 30th anniversary and we’re honoring it with a celebratory video series.  Today, I’d like to share with you one of the videos from the series which is especially important to me because, in it, I talk about the greatest referral of my lifetime.

Throughout my thirty year career in networking, I’ve been privileged to receive more than a few remarkably noteworthy referrals–and I’ve seen and heard of some truly amazing referrals being passed to others.  However, nothing–and I mean nothing–has come close to being as remarkably noteworthy as this one referral which has changed my life in countless ways for the better and continues to define the center of my life.

After watching the video, I’d love to hear from you about what the greatest referral in your life has been up to this point.  I’m sure you have some amazing stories and I hope you’ll share them in the comment forum below–thanks in advance for your participation!

 

 

10 Tips to Get the Most from Business Networking

We all know that networking requires a significant amount of time, effort, and commitment.  Because of that, we all want to make sure that we’re getting the highest return on investment from our networking efforts.  Below, I have outlined 10 tips that will help you get the absolute most from the time you spend networking for your business.

Photo courtesy of imagerymajestic at FreeDigitalPhotos.net

Photo courtesy of imagerymajestic at FreeDigitalPhotos.net

  1. When asking for a referral from an associate or client, use the phrase, “Who do you know who . . .?”  This is an open-ended question that works well.  Do not alter the phrase.  Ohter phrases have been tried, but none have produced the desired results.
  2. Have someone else tell a group of people how good your product or service is.  This beats anything you can say about yourself.  Ask people who have used your products or services to talk about their experience at the next meeting.
  3. Top business executives insulate themselves from those who may try to sell them products or services.  Through word of mouth you can still increase your volume of business, because you know a hundred people, who know a hundred people, who in turn know a hundred people, and so on.  The great referrals are probably not going to come from a CEO, but from someone who knows a CEO.
  4. If you have an opportunity to distribute your materials, do it.  Bring products, samples, brochures, or a presentation book to the business meetings you attend.  If people can see, feel, touch, hear, or smell samples of the product or service you provide, they are more likely to use you.
  5. Offer a special price or service to the members of your networks.  If you can get the members to use you, they are much more likely to refer you.
  6. Anyone active in networking groups can benefit by developing a presentation book, taking it to meetiings, and making sure it gets circulated.
  7. If your product or service is conducive to this approach, tell the members of your network that you accept speaking engagements as bona fide referrals.  Ask them to pitch you to the program chair of other organizations they belong to.
  8. Meet people outside the meeting context whenever you can.  Write cards or letters, send articles that might be of interest, call to check in, and let them know about local business mixers.
  9. To get good referrals, tell people when they’ve given you a bad referral.  If you don’t, you’ll keep getting bad referrals.  Teach people what you consider to be a good referral.
  10. Monitor the referrals you get.  This tells you how often you get referrals, their source, quality, status, and dollar payoff.  Having this information helps you focus on individuals and groups who are giving you the best referrals.  This allows you to reciprocate with people who are giving you the most referrals.

Do you have additional tips for networkers to get the most from business networking?  I’d love to hear your ideas–please leave your thoughts in the comment forum below.  Thanks!

 

What to Do If You Get a Bad Referral

Photo courtesy of Ambro at FreeDigitalPhotos.net

Photo courtesy of Ambro at FreeDigitalPhotos.net

The best way to avoid bad referrals is to tell people when they’ve given you one.  Tell them tactfully, but tell them!  If you don’t, you’ll keep getting bad referrals and, to be brutally honest, you’ll deserve every one of them.  I continually run into people who say, “Oh, I can’t tell someone that the referral they gave me was no good.”  I say, You can’t afford not to tell them.”  Be direct, and don’t apologize.  They need to know the referral was bad.

Be positive, and make sure they know it was the referral they gave that was bad, and not their effort.  If you expect the best from people, you’ll usually get it.  If you expect less than the best, you’ll usually get that too.  The best way to ensure that you don’t get bad referrals is to teach people what you consider to be a good referral. This differs for each person, and especially for each profession.

For example, some professionals, such as consultants, counselors, and therapists, consider the opportunity to give a speech to a business group a good referral.  Others, such as printers, contractors, or florists, normally don’t.  You cannot assume that everyone knows what kind of referral you’re seeking.  You need to be very specific about what constitutes a good referral for you.

An exceptionally effective way of making sure you get good referrals is to monitor the referrals you get.  This helps you in many ways.  It tells you how often you get referrals, their sources, quality, status, and dollar payoff.  Having this information helps you focus on the groups that are giving you the best referrals and to reciprocate with the people who are giving you the most referrals.

Have you had to talk to someone about a bad referral they passed your way?  How did you handle it?  Please share your experience(s) in the comment forum below.  Thanks!

 

Unexpected Referral Sources

Sometimes good referrals come from sources that you least expect.  Many business people I meet want to network exclusively with CEOs and corporate presidents.  They tell me they don’t want to join most business groups, because top executives aren’t members.  If you’re waiting to find a group exclusively for CEOs and top managers, don’t hold your breath.

Even when you find such a group, it probably won’t help.  You see, they don’t want you!  They’re hiding from you.  Top business executives insulate themselves from those they think might try to sell them products or services.  However, if you develop a word-of-mouth-based business, there’s no problem.  Through word of mouth you can increase your volume of business because you know a hundred people, who know a hundred people, who in turn know a hundred people, and so on.  You are potentially linked to a vast network beyond your own, and you never know who may be in this extended network.

The owner of a drapery business told me about one referral he received in this way.  A friend referred an elderly woman to him because the friend thought that he could help her.  The woman, who was in her late seventies, had sought the help of many drapery companies to no avail.  She wanted to install a pull blind on a small window in the back door of her home; she feared that people going by could look in.  The woman explained that normally her son would take care of this but that he was on an extended business trip.  No area drapery company would help her because it would be expensive to come out and install a small blind like that.  The businessman agreed to help her because she was referred to him by a mutual friend and because she was obviously worried about the situation.

About a month later, the businessman was working in his drapery warehouse/showroom when he noticed an expensive stretch limo pull up in front of his commercial building. Curious, he watched as the chauffeur got out and opened the door for a man dressed in an expensive suit.

The man came into the businessman’s showroom and asked for the proprietor.  The businessman introduced himself and asked how he could help the gentleman.  The man asked whether he remembered the elderly woman for whom he had installed the small blind.  The businessman said he remembered her well.  The man said that he was impressed that the businessman did this job, because he knew that there was no money in it.

Photo courtesy of stockimages at freedigitalphotos.net

Photo courtesy of stockimages at freedigitalphotos.net

The woman, he said, was his mother, and she had raved about how nice the businessman was and how he had helped her when no one else would.  She had instructed her son to use the businessman’s service whenever he could.  The son told him that he had a new, 6,000-square-foot home by the ocean.  He asked the businessman to go out and take measurements, because he wanted to install window coverings throughout the entire house.

The businessman told me that it was the most profitable job he had ever received, and it came from a little, old woman who needed a small blind on her back door.  Ironically, the “great referral” you receive is probably not going to come from a CEO, but from someone who knows a CEO.

An architect in Las Vegas told me about a window washer he met in one of his networking groups.  He said he saw the window washer every week for over nine months before the window washer gave him his first referral.  This one referral, however, was worth over $300,000 to the architect!  You never know where a good referral may come from.  It may come from a little, old lady, or a cab driver, or a window washer.  So don’t ignore the possibilities of the contacts that other people have or can make for you.

Do you have or know of a story about a remarkable referral that came from an unexpected source?  Please share it in the comment forum below–I’d love to hear about it! Thanks!

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