In the course of research for his book Business Networking and Sex (Not What You Think), Dr. Misner found that people who had a system for tracking the money they generated were more likely to feel that networking played a role in their success.
Without a system, it’s very hard to tell how successful you are. BNI has developed a protocol to measure referral success in a way that doesn’t inflate the numbers.
Brought to you by Networking Now.
Complete Transcript of BNI Podcast Episode 243 –
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. Hello Ivan. How are you and where are you?
Hi Priscilla. I am doing great and I am in Omaha, Nebraska. It’s my first visit to BNI groups and I am really excited to be here.
Great. What are you doing in Omaha?
I am doing a presentation. I am speaking to members, meeting members, that kind of thing. It’s one of the great things that I do in this business, for me, is to go all over to BNI groups. We mentioned in a previous podcast that one of the reasons why I have you ask me where I am at is I want members to know that I am not sitting in my office in some big ivory tower.
I am out there visiting and meeting members as much as possible. It’s really a pleasure to come out to different regions. If I come out to your region, please come up to me and let me know that you are listening to these podcasts. I always get really excited when I have people come up and say, “Hey, I listened to this podcast or that podcast and it really helped.”
Okay. So what are you going to share with us?
Well, today I am going to talk about an article that I wrote for SuccessNet back in January. You achieve what you measure. Tracking your referrals is really important in BNI. You achieve what you measure. This is pretty close to the new year still. It’s a great time to do some vision making on what you want your networking efforts to yield over the next year. This generally involves setting some goals and objectives. It’s not too late in the year. But you can’t really gauge your success in something unless you measure your progress. Hence, you achieve what you measure.
Now, I have collected a lot of hard data on this topic. I would like to share it in this podcast. Some of it comes from my new book which was just released, Business Networking and Sex. For the record- I think I mentioned this in a previous podcast. For the record, the book is about gender as it relates to networking. But a book called Business Networking and Gender, well, you can hear the crickets chirping now. Nobody is going to pick that up. But it’s about the different between men and women.
In this book, one of the things that I highlighted was tracking business and how that relates to networking success. The book was based on a survey of 12,000 business people from all around the world. In the book, we show a table. Maybe we can do a podcast to that article on SuccessNet online. We had a table that we asked people- they were responding to a question where we asked them if they track the money that they generated and we cross tabulated that by were they successful in their networking efforts.
The chart is pretty darn clear that people who had a system to track their business were more likely to have felt that networking played a role in their success. Even more notably, those who did not feel that networking played a role in their success were almost twice as likely to not have a system for tracking their business.
With the respondents, those people who said no, networking hasn’t played a role in success, 66% of the respondents didn’t have a system to track the money that they generated. 34% said yes, that they did have a system. And the opposite is true of those people who did have a system. A substantially higher number of them had achieved success through networking.
So you achieve what you measure. This isn’t just Ivan talking. We have some hard data on this. I think that is really important. Clearly, those people who do not use systems to track their businesses are much more likely to feel unsuccessful in their networking efforts.
What does this mean to you as BNI members? Well, simply you have to track the referrals you get and the value of those referrals. Even better, you should get your entire BNI chapter to join you in this endeavor. To help you do that, we have developed a thorough description of how to go about that in measuring this process. And either here on this podcast, we can have a link to it or if you go to the SuccessNet online article of You Achieve What You Measure, which was a January 2012 article, you’ll find a protocol. It’s a Word file. It’s the BNI protocol for measuring and tracking the value of the referrals you get. It also tracks some other things like your number of one to ones and the kind of education that you are getting in the BNI group. But the key is that it tracks the referrals.
If you would like to have your best year ever in BNI, then you really want to sit down and track the business that you are getting. This isn’t just advice. I am telling you we have examined it. The evidence is clear that those people who track their business are much more likely to be successful.
Let me just go back to the protocol briefly. In there, we have a description of how do you measure the value of a referral? It’s a little bit complicated but it’s pretty thorough. I will tell you there is no clean answer, Priscilla, in how you measure the value of a referral. How a banker measures the value of a mortgage that he or she sold is a lot different that an attorney measuring the hourly amount that they charge a client. It’s hard to determine a number that works across the board. But we have done that in this document. Although it is not perfect, we urge people to follow this protocol because it’s not only the way we measure it globally in BNI but it’s also the basis of several doctoral dissertations that were done with BNI, mine being one of them but several others and it was the way we measured what the value is of a referral.
I mention the doctoral thing because if a doctoral committee evaluates this information and says that yes, this is valid and replicable, then you know you have some quality control that has been done in the process. This protocol has gone through that, so I recommend that you use that.
Can I interrupt you for one moment?
Sure. Go ahead.
So when you are talking about measuring your referrals, I am immediately thinking that’s easy. You just code your invoices and you are just measuring dollars. But you are talking about something in addition to dollars, right?
No, I am talking about dollars, but here is where it gets complicated. If you are a real estate agent, what do you measure? You sold a house that is worth $500,000. Was that a $500,000 sale? Was that $500,000 in business? The answer to that is no. We feel that would inflate.
We don’t want to inflate the numbers. We want numbers that are reasonably accurate. When we say that we as an organization generated billions of dollars worth of business the previous year for our members, we want that to be an accurate number. So you have to look at different things. We recommend that for somebody like a real estate agent, that they measure the gross commission. That could be anywhere from 1.5% to 6%, depending on whether they are the buying agent, the seller, whether they are the broker. There is a number of variables, but it is the commission.
If you are talking about a service provider, like a website designer, business coach, chiropractor or photographer, it’s what you charged for your services. It’s the hourly rate or the gross amount.
What do you do if you are a contractor? That’s really complicated because if you track the whole job, and most of it is going to pay your subs, there it gets confusing.
That is an issue. That came up recently. But you still do in that case, the gross. If you have a job that was worth $10,000, that’s the job. You say that you have to pay some of your subs. That’s true. But let me ask you a question. When you do recording, don’t you have people that you have to pay?
We all have people that we have to pay, unless you are a single entrepreneur by yourself. Even then, you still have to pay printers, your telephone and other out of pocket expenses. So we could go to net profit. That was one of the things that we talked about at length. That would certainly take into account contractors and every other business.
Here is the problem with net profit when we tried doing it many, many years ago. People don’t like telling you their net profit. They don’t. I know this is a shock. They are going to fib. Some people will tell you they make less than they really do because they don’t want you to know what their net profit is and what their earnings are. Other people will tell you more because they are embarrassed about their net profit. Net profit is a hard thing to measure accurately. People don’t want to give that information.
But a repair by a contractor, the number is what the number is. We understand that there are costs. There are costs to everybody. That real estate agent who gets the commission- is that 100% profit for them? No, they have costs that they have to take out of there. We all have costs. So it’s a complex issue.
We have a several page document that walks you through and tries to explain that. That’s the protocol. Take a look at that and the most important thing is start to measure your chapter referrals. Measure the value. You can achieve what you measure so you want to measure this and set goals for the chapter. Make sense?
Yeah. I think it’s good.
Well, that is my message for today. So listen, if you have listened to this podcast and your chapter has measured the amount of business generated, I want to hear from you. Why has that helped your chapter? Explain to everybody why this is so important. It’s a lot of work to do in a chapter. I want you to explain to everybody why this is so important and why it makes a different. That’s it for today, Priscilla, thanks.
Okay. Great. Thanks, Ivan. That’s it for this week. 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.