In every city in America there’s at least one business network referral group or BNI-style club.
These are where business owners get together and refer leads to each other.
Membership is usually paid, and restricted to one type of each business per group (so there’s no competition). Regular meetings in these groups are usually mandatory, and you have to show up with leads for each member at each meeting.
Here’s why I think these are a complete waste of time.
Let Me Tell You A True Story
To be clear, I have no need to join your business network referral group. At all.
And I don’t think most business owners need to join one either.
I’d like to tell you why by relating my own story, and the philosophy behind it.
I already rank fairly well in Google for the specific, niched-down things that I do in my own city of Sacramento — web design, WordPress web development, and e-commerce development on top of WordPress.
What joining a referral group does is “fill the gap” for businesses that aren’t currently getting leads through organic search results.
However, getting to the first page takes a lot of work. It took me three years to go from not cracking the top 100 results to being within striking distance of the top. And the more general the search phrases you want to rank for, the harder the climb can be.
The major part of the battle was, and is, creating a boatload of site content that actually helps the people I’m targeting.
The end result is that I’ve been able to attract people to my site, not just locally, but from all over the country.
The fact is that most businesses can get to the same place. Because most of their competitors won’t put in the work needed to get to a good place in search rankings. Most of your competitors aren’t necessarily looking for how they can help their customers make a good decision about who to choose. They are focused on their marketing pitch more than they are focused on helping their customers.
If everyone competing with you is looking for shortcuts, standing out and winning the long-term game becomes that much easier.
The Type of Referrals I Value
When you help your customers, and they are happy, they are going to refer you to other people, because you’ve done such a good job for them.
Maybe you don’t know this yet, but there’s a seriously low bar for customer service in the web design industry. Maybe there’s a low bar for customer service in your industry, too.
A lot of customer service comes down to listening to people, and not trying to upsell them on every interaction you have with them.
So let’s bring it back to the BNI-style groups. Here’s why I always politely decline joining these, and I think you should too.
Nothing Personal, It’s Just Business
When you pitch me on joining your business network referral group, this is what I hear:
You want me to do your job of finding leads for you. And you want me to pay you for the privilege of doing so.
When I ponder the work I’ve done to put myself in a position to where people come to me, and I look at other businesses that have also put in that work and are reaping the rewards, I wonder —
I wonder if you have done the same work. Or are you relying on your referral group to do the work for you?
No offense to anyone who’s ever joined these type of referral groups, but those who know, know.
There are certain patterns that emerge. There are certain industries that are about churning and burning through leads. Leads that come from the personal and professional networks of the other members of the group. Your value to these bad actors are the names, phone numbers, and emails of your personal network.
My philosophy is if I truly believe you are the best person for the job, and I trust you, I will refer you to the people I know, regardless if we’re in a club together or not.
And that’s the way it should always be.
Time Is Money
The final reason I don’t believe in joining network referral groups is they demand a lot of your time. As you know, your time is your most valuable resource. Time is the one resource you can never create more of. Deciding how you spend your time determines the outcomes you have in your business and your life.
The first way that you get robbed of your time in a network referral group is by building other people’s businesses instead of your own.
I don’t know about you, but I feel a lot more confidence in spending my time building my own business, rather than trusting random business owners in a group do it for me.
Instead of working on building your own empire, by joining a referral group, you’re suddenly roped into spending all your time gathering leads for other businesses.
In turn, you are trusting these other businesses to gather equal value leads for you in return. Except this usually doesn’t happen.
Every web designer I’ve ever talked to that joined a BNI-style group has told me the leads they get back are low-quality, bottom-of-the-barrel variety leads that they could have gotten on their own, if that’s what they were after.
All this begs the question:
Why are you trusting people who can’t find enough leads for themselves with the responsibility of finding leads for you?
Because if they were kicking ass with their own business, they sure as heck wouldn’t need you to hunt down leads for them, would they?
Here’s an infinitely better idea. Instead of spending all that time hunting down leads for other people, and going to mandatory weekly meetings, take that time and invest it in your own business.
Take that time and create useful content that will attract future customers.
Take the money you’re spending on your business network referral membership and go to a trade show where all your customers will be in attendance?
Take the time you’d spend trading crappy leads with other business owners and call some of your old customers. They are better sources of lead generation than random people you’re paying money to hang out with once a week.