The number of referrals you should expect to receive from your BNI group is dependent on two things: the type of business you’re in, and your expertise—not just at your business, but at asking for referrals. (Length of membership also plays a part.)
A florist will get more referrals than a real estate agent, but a successful close of business is worth more to the real estate agent.
So how do you increase your referrals relative to the profession that you’re in?
- Participate in your contact sphere (businesses that have symbiotic relationships with yours).
- Diversify your networks: join more than one kind of group.
- Educate the people in your networks about your business and how to refer you.
Brought to you by Networking Now.
Complete Transcription of BNI Podcast Episode 073 –
Hello and welcome back to the Official BNI Podcast, brought to you by networkingnow.com, the leading site on the net for networking downloadables. I am Priscilla Rice coming to you from Live Oak Recording Studio in Berkeley, CA. I am joined on the phone today by the Founder and the Chairman of BNI, Dr. Ivan Misner. Hello, Ivan. How are you today?
Doing great, Priscilla. Thank you.
Where are you located?
I am in Los Angeles at BNI HQ this week.
Great. What are you going to talk to us about today?
Today we are going to talk about anticipating referrals. If you are in BNI, you may have some expectations on the amount of referrals that you might be getting. I wanted to talk about that a little bit. The number of referrals that you should expect from your group is really dependent on two things: the type of business that you are in and the expertise that you have in getting referrals and developing your networking after the referrals.
The type of business and the expertise that you have are really the two keys. Some professions receive more referrals than others. For example, a florist is going to get a lot more referrals than a real estate agent. The florist will have to sell a lot of flowers to make up for a real estate deal. The type of profession can sometimes determine a range in the quantity of the referrals.
Having said that, the actual number that someone in a profession can get varies dramatically depending on their effort and their expertise to develop the referral. It depends really on how they work in their BNI group. Remember the old computer adage of garbage in garbage out. If you put bad information into your computer, you get bad information out. One’s networking efforts are very much the same. The results that you can expect to get out of your efforts are based on the quality of the relationships that you develop within your BNI group.
I recently conducted an internet survey. I surveyed professionals on BNI.com and I asked what percentage of your business comes from word of mouth referrals? I was really surprised at the results. More than 2/3 of them responded saying that 70% or more of all their business was from word of mouth. Only 14% said that referrals accounted for less than 30% of their business. Only 2% said that they got no business from word of mouth.
Clearly, word of mouth and referrals are critical to their business. The question is how do you increase it? How do you get a larger share for the kind of profession that you are in?
Here is one thing. I have talked about it in other podcasts. First, you really have to participate in your contact spheres. Contact spheres are groups of business professionals who have symbiotic relationships. They are compatible non-competitive professions. I talked about it a little last week with wedding contact spheres. There is the financial planner contact sphere and many others. You want to build your contact sphere and that will increase the amount of referrals.
Second is diversify your networks. You want to—we talked a little bit about this briefly last week as well. You want to join groups like a chamber and BNI and maybe a service club. You want to make sure at your meetings – and this is really important – to educate your members on what it is that you do.
Based on research that I conducted at the University of Southern California a number of years ago, we found that the average participant in a BNI group generated about 4 referrals per person per month. Roughly 50 referrals per year. The problem with that statistic is that some people may the thinking I got less than that or some may have gotten more than that. That is the problem, of course, with statistics.
Did you ever hear the old adage that if you torture the data long enough it will confess anything? There is a little truth there. You look at the statistics like this and it is the average. It’s the average number of referrals that is 50 referrals per person per year. The problem with that is exactly half of the participants got more and exactly half got less. It’s an average and some people may be getting less than that and others more.
The key is that is a pretty consistent average within BNI. There are other networking organizations that I have looked at. There are a number of variables to this number which include things such as length of membership. That is one that a lot of people may not think about. The longer they are in a BNI group, one of things we found is the more referrals they got. The profession they represented was important but interestingly enough, regardless of the profession, the longer they are in, the higher number of referrals they get.
It seems like the years of experience, the level of participation – for example, members who have been active, maybe on the leadership team, have been on the membership committee or visitor host, tend to get more referrals statistically than those with very little activity in the organization. So how much they participate is important. The length of time is important.
One of the things we have found that was completely irrelevant was gender and age. They tended not to be a big factor in how many referrals one might be able to get. The key was really participation and length of membership. Those really made a huge difference?
Can I ask a question? When you talk about length of membership, there is another aspect to it that may come up, which has come up a little bit in our group. That is the possibility of growing stale to the other people in your group. If the same number have been meeting for a very long time, listening to your 30 second infomercial and seeing you every week, sometimes even having used your service, you may feel a little bit dead in your relationships. Do have any response to that?
That is why it is very important every week to come up with a different 60 second presentation. You really need to change it up. The biggest mistake that people make is coming in and doing the same thing week in and week out with their presentation. Oftentimes, they will do the same memory hook week in and week out. Memory hooks are really a lot less supported that focusing on some aspect of your business and talking about it.
So you think that’s the best?
Yeah. You really need to change it up and the more you change it up, the better. Your goal every week is to educate the sales force or referral source, not close the sale. Does that make sense?
Yeah. I have always felt like if I don’t get referrals, that is a reflection on myself that I haven’t done my job in the group. Not necessarily the responsibility of the group.
You know, you are not going to get a referral every week, but the truth is that if you are not getting referrals very often, it is your responsibility as a member. That may mean that you are not educating them in the way to give you referrals. In the book, Truth or Delusion, one of the things that we said in there is:
Truth or Delusion? If you are not getting any referrals from your network, it is your fellow members’ fault. The answer to that is delusion. It is all your fault. If you are not getting referrals, there is probably a reason for it. You really need to look at what that reason is. The overwhelming majority of the time, it is that they are not being educated in a way that makes it easy for them to give you a referral. The easier it is for them to give you a referral, the more likely you are to get a referral.
That is why every single week you have to change up the material. Focus on one aspect of your business and really spoonfeed your business to them and teach them how to refer you.
That is great. I think you are totally right about some professions being easier to refer than others. A handyman joined and he must have gotten ten referrals. Everyone had been storing up their handyman referrals.
And he has to be good because those referrals will go down real quick if he is not good at what he does.
That is great. Do you have anything else that you would like to add before we end this podcast?
To summarize, the number of referrals you get will depend on the profession you are in and your ability to network effectively. On average I found that many business people can generate as much as 50 referrals per person in a networking group like BNI. What makes the number really significant is that most people believe that a referred contact is much easier to close business with than an advertising contact. For this reason, some businesses really want to focus on the referral aspect and the word of mouth aspect for their businesses because it is a very cost effective way for you to build your business.
And lots of fun as well.
Yes, BNI is not only a great way to build business but a great way to do business.
Thank you. I think that is it for this week. Thank you so much, Dr. Misner. I want to remind the listeners that this podcast has been brought to you by networkingnow.com, the leading site on the net for networking downloadables. Thanks for listening. This is Priscilla Rice. We hope you will join us next week for another exciting episode of the Official BNI Podcast.