Synopsis

Larger networking groups can generate exponentially more referrals than small ones. A chapter of 15 members will typically pass 50 referrals per month, while a group of 30 members typically passes 150 referrals. Critical mass for a BNI group is about 20 members. So size matters, but it’s not the only factor in the number of referrals generated.

The other major factor in the number of referrals generated by a group is whether it’s a “strong contact” or a “casual contact” network. A “strong contact” network, like BNI, not only focuses on passing business between members, but allows them to establish credibility and develop profitability as well as the visibility that a “casual contact” network like a chamber of commerce can provide.

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Complete Transcription of BNI Podcast Episode 072 -

Priscilla Rice:
Hello everyone and welcome back to the Official BNI Podcast, brought to you by networkingnow.com, which is the leading site on the net for networking downloadables. I’m Priscilla Rice coming to you from the beautiful Live Oak Recording Studio in Berkeley, California. I’m joined on the phone today by the Founder and Chairman of BNI, Dr. Ivan Misner. Hello I did. How are you?

Ivan Misner:
I am doing great, thanks.

Priscilla:
And where are you today?

Ivan:
I am at BNI headquarters this week. The book tour starts this month for my new book, 29% Solution. I am here right before the book tour starts.

Priscilla:
That’s great. I think we should have a podcast of the book.

Ivan:
We should. That’s a great idea.

Priscilla:
What are you going to share with us today?

Ivan:
Today we’re going to be talking about generating referrals. It’s based on an article that I wrote for entrepreneur.com. And it I talk about the fact that it is certainly true that larger networking groups can generate more referrals exponentially. It kind of depends on the type of referral group. For example, in strong contact groups like BNI, studies show that a group with 40 members typically generates more referrals per member than one with 25 members.

That really holds true from smaller all the way up to larger groups. For example, a group of 15 members will on average pass about 50 referrals per month total. In a chapter of 30 members, they will pass over 150 referrals a month total. So that when you get to 35 or 40 members, you are pretty consistently passing over 200 referrals, as a rule, depending on the group at the age of the group. So the size of the group definitely makes a difference. And it stands to reason that with more people in your group, the more databases you have access to and the more contacts you have access to and more organizations when you are working with a larger group. The same thing happens with casual contact organizations like chambers or other organizations when you are working with a larger group, it gives you more exposure and diversity in your contacts.

The difference is — and this is where it gets a little complex — is that a hundred member networking group, a chamber or something like that, will not necessarily pass or referrals than a 40 member BNI group or a 30 member BNI group. The reason for that is that strong contact networks like BNI tend to focus on generating referrals for their members and it is very structured with the time for passing referrals. On a referral basis, you’re likely to get more referrals from strong contact network than a casual contact network. Let me see if I can put it in perspective for the listeners. I have talked a lot about what I call the VCP process. Visibility, credibility, profitability. You first have to be visible in a community. People have to know who you are and what you do. Then you have to establish credibility. Only then does it lead to profitability or people know what you do, that you are good at it and they can pass referrals to you.

Chambers tend to be great at establishing visibility, but it takes time to establish credibility because you’re only meeting them once a month. Whereas with groups like BNI, establishing credibility is a little bit easier because you’re meeting them every single week, having testimonials, and going deep into those relationships. So it’s a little easier to get to the credibility to turn into profitability for your passing referrals. Both are important.

I don’t want to undermine or downplaying the value of groups like chambers because without visibility, it doesn’t lead you to the next two of credibility or profitability. There are so the size of the roof is important particularly in a strong contact are going to be a night. The size of a group or chamber is important, but you can’t compare the two. You can’t compare a hundred member chamber to a 30 member chapter of BNI because you talking about apples and oranges sizes important but it really is different organization.

Priscilla:
It sounds to me like the winning combination is to join both and towork both into your schedule.

Ivan:
Yes. I think joining both is really important. It’s part of diversifying the kinds of networks that you belong to. And despite the built-in structure and focus on referrals that strong contact referral groups like BNI have, at the casual contact groups like chambers could do a lot of exposure to many many others. So it’s a combination of the kinds of groups that really helped to make a difference in terms of the amount of business you are going generate.

You know, when you pay to join a networking group like PNI or a chamber, you have to remember it’s just the admission price. It gets you in around more opportunities can come your way, but it doesn’t entitle you to referrals. It’s not enough to simply show up. You have got to really participate and do the things necessary to make the group successful.

But the chapter size of a BNI group really can make a difference, and it is one of the reasons why we often talk about building the membership. We find the critical mass is around 20. Are you groups hit me, that is when things really start to come together. The groups of 30 to 40, that is where they are really powerful. I’m talking about 30 to 40 who are showing up regularly in meeting regularly. That’s when you’re passing more and more high-quality referrals. That is the number that the chapters really should shoot for.

One of the reasons why they tend to pass more referrals is when you get into 30 or 40, more and more contact spheres get filled. When you fill contact spears, one referral can sometimes be two or three referrals. You come in with one referral — let’s say somebody is getting married. You have three or four referrals. You’re a referral for the florist, a referral for the travel agent, a referral for the jeweler or maybe the photographer. So you might have one wedding with two or three referrals. The more contact spheres you can fill in, the more referrals you’re going to pass. A chapter needs to get into the 20 to 40 mark in terms of membership.

Priscilla:
Also there are more guests invited with more people in the group.

Ivan:
Sure. The more guests that you have the more likely you are to have people join. But you have to remember that you can have a lot of people show up but if you don’t run a great meeting, they are not going to join. Running a really good tight meeting where people see it is not a coffee klatch or a social group- that it is really a group about passing business. That is really critical to the profit.

Priscilla:
That is really good information. I appreciate that. I am a member of a fairly large group, almost 40. We are always working on increasing our referrals. We have a large amount of passed business, but the referrals are down and that is something that we are working on.

Ivan:
The size of the group does oftentimes make a difference in the number of referrals that are being generated. Like I was saying, in a group of 30 members is definitely going to be passing over 150 referrals. That is pretty consistent. That is why we talk about building the size of the chapter, preferably to 30 or more.

Priscilla:
That is great. I think we may be out of time. Do you have anything else that you would like to share with us?

Ivan:
No, that is all I have for today. Thanks a lot, Priscilla.

Priscilla:
Okay great. Thank you so much, Dr. Misner. I just want to remind the listeners that this podcast has been brought to you by networkingnow.com, which is the leading site on the net for networking downloadables. Thanks for listening. This is Priscilla Rice and we hope you will join us next week for another exciting episode of the Official BNI Podcast.

 

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