Joining a referral group is an effective way to generate new business and expand your network. But only if you join one that will meet your needs and is set up for success. While most referral groups operate with similar ideas—getting leads and more business—how they go about that can vary greatly. Before joining a referral group, it's important to ask the organizers the following questions:
1. What is the goal behind this referral group?
It's critical to your success within the group to understand its goals and objectives before joining. All referral groups expect members to refer people to other members. They’re based on networking. However, some referral groups also work as business coaches for one another. They’ll give suggestions on how to grow your business. There may also be a mentor component. Get specific about the group’s goals and what you can expect to get out of it. Speaking of, make sure you ask…
2. How many referrals can I expect to receive and how many am I required to make?
While most groups focus on generating leads, some are more exacting in what that means than others. Some groups have strict requirements about how many leads you bring in or referrals you make. If you don’t meet the minimum number, you may be asked to leave/resign. However, if you can meet their requirements, you will likely receive more leads in a group like that than in a group with lower or undefined expectations. Still, an aggressive leads group may be stressful. Make sure the group's purpose aligns with your business goals and lead-generating abilities.
3. Who are the members of the referral group and how are they recruited?
Get to know the members of the group and make sure they are the type of people you want to be associated with. Are they reputable and trustworthy? Do they have a good track record of generating business for other members? Are there industry limitations of one person per industry? This is important because if there aren’t limits, referrals for your industry could be split, resulting in lower chances of converting the leads to business. Make sure you ask how members are recruited. Is there an open call or is it invitation only?
4. How often does the referral group meet/How often do I have to attend?
Find out how often the group meets and whether the schedule works for you. Also, consider the location and time of day of the meetings - make sure they are convenient for you to attend. Most referral groups keep to the same schedule as they have attendance requirements. Make sure you inquire about those as well, particularly if you have a non-traditional schedule. Some groups will revoke your spot if you can’t meet the attendance requirements.
5. How many members are in the referral group?
A referral group that is too large or too small can impact its effectiveness. A group that is too small may not have enough members to generate sufficient referrals, while a group that is too large may be too competitive. Again, the composition matters too. Are you the only lawyer in the group, for instance? Is the referral group closed to new members, outside of replacing current industry professionals or can anyone join assuming their profession is not already represented? For example, is it closed except to fill the vacant insurance professional’s position or can anyone join?
6. What are the membership fees?
Referral groups often require members to pay a fee to join. Make sure you understand the fees. Some are expensive, especially if they cater to a higher-level executive or business owner.
7. Will I have to track my success manually?
Referral groups are designed to make getting leads easier but that doesn’t mean that the group has the necessary tools in place to help you track success. Some referral groups have referral tracking software. This makes it incredibly easy to see where your referrals came from and which ones eventually turned into business opportunities. The software can also help you track the return on investment of each lead that converts and thus help you determine if your referral group is worth your time investment as well.
Some referral tracking software also gives you insights into the leads that are converting for other business professionals in the group as well. That can help you measure the number of leads you’re receiving versus other members of your group. It can also track how many referrals each member is making. If the referral group you’re considering doesn’t have tracking software, you’ll want to consider using your own. Without data, you won’t know if your time and monetary investment is worth it.
Referral groups can be an excellent part of building a solid referral network. However, make sure you perform your due diligence to find a group that matches your goals and one that you can adhere to its established requirements. Just as they’ll be auditioning you, you want to audition them. The members will become a large part of your business life and you want to make sure you feel comfortable referring business to them as well.