Episode 239: Bigger Is Better

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Synopsis

Today Linda Macedonio, Executive Director of BNI Rhode Island/SE Mass, joins Dr. Misner to explain why bigger is better for your BNI chapter.

In one region of Massachusetts, the average of the top 5 chapters was over 50 members and the average business generated per member was $34,000. The average size of the  bottom 5 chapters was 19 members and the average amount of money generated per member was 12,000.

Chapters that double their size consistently triple the number of  referrals in their group.

So why does this work? It has to do with the 80/20 rule.

Chapters with fewer than 25 members spend 80% of their time inviting and recruiting new members just to stay alive and only 20% on building relationships and passing referrals. Groups with more than 25 members can spend 80% of their time on passing referrals.

Larger chapters also have more and stronger power teams, so one referral can go to multiple people.

Let us know how much business your chapter is generating and how big it is.

Brought to you by Networking Now.

Complete Transcript of BNI Podcast Episode 239 -

Priscilla:
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 am Priscilla Rice, and I am coming to you from Live Oak Recording Studio in Berkeley, CA. I am joined on the phone today by the Founder and Chairman of BNI, Dr. Ivan Misner. How are you and where are you?

Ivan:
Hi Priscilla. This week, I am in Hawaii, visiting the BNI region here and doing a presentation for the new book that came out. We have with us a guest from the other side of the country. She is from Rhode Island. Her name is Linda Macedonio. Linda, welcome to the podcast today.

Linda:
Thank you very much.

Ivan:
Linda has been an Executive Director in Rhode Island and Massachusetts since 1998. She became involved in BNI as a member first. Almost all Directors were members first. She was representing her bookkeeping business. She currently oversees about 60 chapters and 1500 members. Over the years, BNI has helped her overcome her shyness. Linda is very nervous for this. She was a contributing author to Masters of Networking. If you have a copy of that book, she did the shy bookkeeper piece in that book. She’s also a contributing author to Masters of Sales. Linda really enjoys helping people in BNI and helping them achieve success. She is a great Director for the organization.

Linda, welcome to the podcast. You have an interesting topic. Bigger is better. Do you care to explain that to everybody?

Linda:
I would be happy to. As BNI Directors, oftentimes, we are talking to chapters and to members about growing their chapter. Sometimes we actually get feedback where they think we want them to grow the chapter to help BNI and this presentation was actually designed by Reed Morgan in Tennessee. It makes the point that when a chapter is larger, it is helping the members more than it is helping BNI as a whole.

What we did is we ran some number showing the financial return on investments for the members and kind of showing them by numbers that it is a numbers game and that bigger really is better.

Ivan:
You have some numbers that you are going to share with everybody, right?

Linda:
I do. I want to clarify that even though we talk about the chapter and the numbers, it’s never sacrificing the quality of the membership and the system just for the sake of a larger chapter.

Ivan:
Listen, you bring up a really good point. It’s not just about the number of people, the number of warm bodies, but quality people. You have to be focused on bringing in quality members into the organization. Otherwise these numbers don’t hold up, unless you are talking about quality people.

Linda:
Absolutely. We share that information as well. We do have some data from a few regions. One particular region, looking from the top 5 chapters and looking at the bottom 5 chapters of that region. The average of the top 5 was over 50 members per chapter. It was about 18 or 19 members in the smaller chapter. The difference in the amount of money generated per member per year is tripled. It’s under $12,000 per year for a member in the smaller chapters for the money that they are making compared to almost $34,000 per member per year in the larger chapters.

Ivan:
Let’s just recap that for everybody. I think it is important for people to hear this. This is a region in Massachusetts where they top five chapters in that region, a big area, the average number of members is about 50 members per chapter. They were tracking the amount of business they got, and they tracked that the average amount of business per member was almost $34,000. The bottom five chapters in that same region averaged about 18.5 members, and their average was under $12,000 per member. It was almost 3 times difference, certainly over two times the difference between the top five chapters and the bottom five chapters.

I think that is probably indicative of many regions. I think in your region, the numbers are similar, at least twice the amount of business is generated in a group that has 30-40 members compared to a group that is around 15 members. Is that your experience?

Linda:
It has been. There is another statistic with that regarding visitors. In the larger chapters, they have about 2.5 times the number of visitors come to their chapter. That is additional exposure for the member. Visitors will oftentimes make referrals of themselves or others. I think that also contributes to the amount of money that the members are making.

Ivan:
This has been a consistent number from the beginning of the organization, that chapters double their size from 15 to 30 will triple the amount of referrals that are generated in the group. That is a pretty consistent number over the years. Having dollar numbers to go with it, like you have done, and Patty tracking in Boston and Reed tracking his numbers, I think just gives credence to what we are saying in that bigger truly is better, as long as the bigger is quality members. Yeah?

Linda:
That’s true.

Ivan:
You have a few reasons why you think this works. Do you want to talk a little bit about that?

Linda:
I do. I think most people have heard of the 80/20 rule. This actually can apply in this case as well. Typically chapters that are under 25 members will spend about 80% of their time on inviting and recruiting and in some cases, just for the chapter to stay alive. Then only 20% of the time is spent passing referrals. To flip that, chapters that are over 25 spend about 80% on building the relationship, passing the referrals, generating the dollars and 20% of the time on inviting or recruiting.

Ivan:
That makes sense to me.

Linda:
Yeah, I think that kind of speaks volumes in where the focus is depending on the size of the chapter. Another piece with that is the contact spheres, it really does make everything easier for generating referrals and business. Again, bigger is better in that regard.

Ivan:
For contact spheres, we use the terms, both contact spheres and power teams in BNI. Contact spheres is a group of professionals who have a symbiotic relationship with each other, just for the listeners, in case you don’t know- like a lawyer, an accountant, a financial planner. They all refer business to each other. Contact spheres is the group of professionals who could potentially be symbiotic to you.

The power teams are the groups of business professionals that you have a relationship with. Within BNI, you are going to have a formed power team. The point I think you are trying to make, Linda, is the more power teams you have in a group, the more successful that chapter is going to be in generating referrals. Correct?

Linda:
Correct. We have actually noticed that it seems that probably close to 70% of the business that is being done in a chapter, especially with the stronger contact spheres and power teams, are coming from within their own power team or contact sphere.

Ivan:
You know, one of the reasons for this is that sometimes one referral can be for two people. If you have a really strong power team, and you’re talking about a wedding power team, if somebody comes in with a referral for somebody who is getting married, that may be able to go to the caterer, the florist, the photographer. It might go to two or three people. Sometimes one referral can go to two, three or four people. The stronger your chapter, the bigger the group, the more likely you are to have power teams that are bigger, where one referral can go to multiple people. That is one of the reasons why you see that. There is a real logical reason for the increase in the amount of business generated.

Linda:
Absolutely. That is exactly what we found. It comes down to working smarter, not harder, and that there is strength in numbers.

Ivan:
Listen, I think you have given a pretty compelling argument on the return of investment, what’s in it for a member to bring a chapter up. We talked about groups of 30, 40 or 50 members. It’s really at 20 members where there seems to be a critical mass point, where things start to come together. When you get groups that are around 30 or 40 members, that’s when the numbers begin to almost grow exponentially. Would you not agree?

Linda:
I would agree. One way to look at it as well is every member is attending a 90 minute meeting. Would you rather make $12,000 or $34,000?

Ivan:
I think most people would rather make $34,000. No doubt about it. Groups that have that size membership are definitely doing that. This is really helpful information, Linda. Is there anything that you would like to add before we wrap up?

Linda:
No, I think we have pretty much covered everything. I appreciate you having me on the podcast.

Ivan:
Listen, it’s my pleasure having you on. You’re a great Director for the organization and I think you are one of those classic examples of somebody who has come into BNI and was nervous about standing up and doing presentations, as you were. Yes?

Linda:
You knew me when.

Ivan:
And you now stand up and do public presentations at BNI conferences. You have done this podcast. It’s one of the things that I really love about BNI. You see people who develop a skill set that maybe a few years ago, they didn’t think they would ever want to or could do. I think you are sort of the poster child for that in the organization.

Linda:
Well, thank you.

Ivan:
Well, listen, we really appreciate what you do, Linda. This was great information. For those of you listening, just a recap. Groups that are 40-50 members are passing two to three times the amount of business and generating two to three times the amount of referrals. It isn’t just in these two or three regions that we are talking about. It’s multiple regions. It’s all over the world. It’s a consistent number. Linda, thanks for bringing that to our attention. We appreciate it.

Linda:
Thank you very much.

Ivan:
If you are listening to this podcast and you’ve had a similar experience, we would love to hear your comments. Drop us a note here on bnipodcast.com and let us know how much business you’re generating and what the size of your BNI chapter is. Thanks a lot. Priscilla, back to you.

Priscilla:
Okay great. Thank you so much, Linda, and thank you, Dr. Misner. I would just like 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. Thank you so much for listening. This is Priscilla Rice and we hope you will join us next week for another exciting episode of The Official BNI Podcast.