My Networking Group Isn't Producing Referrals--What's Wrong?

Welcome to Day 4 of our Referral Clinic and Blog-a-thon!  We asked advisors to send us their toughest referral challenges. Now we're featuring the best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by Victor M., an independent advisor in Brentwood, Missouri. Well done, Victor!

Networking expert Bob Burg is going to take on Victor's question.  Bob is a frequent speaker at financial services conferences and is the author of Endless Referrals: Network Your Everyday Contacts Into Sales.

Question: "I've been involved in a BNI group for nearly three years and have not been getting referrals. I've tried presenting myself as an asset manager for larger 401k rollovers, as someone who can help people just starting out, or someone who can open an IRA in a flash at tax time. Nothing seems to work. My fellow members are not sophisticated and are from every profession. Should I throw in the towel rather than renew my membership?"

Bob Burg's answer:  Referral-exchange groups such as BNI (Business Network International) are a goldmine when worked correctly, so let's look at a few things you might do in order to dramatically increase your odds for success within this organization.

While the following thoughts will encompass more than just your question (and some of these you might already be doing correctly) it's taking it all into consideration holistically that puts the odds in your favor.

The first mistake many advisors make in a group such as this is having unrealistic expectations. While the printer in the group can expect immediate business and referrals, the Financial Advisor cannot expect that. Not that it cannot or never has happened, but the odds are certainly not in your favor, and for obvious reasons.

So, know that it will take some time within these types of groups to develop the "know you, like you, trust you" relationships that will elicit the referral business (and direct business) you desire.

To do this, do what you would always do when cultivating networking relationships: add value to their lives. How? By referring business to them, providing them with information (not financial) that can help them, providing them with information (yes, financial, but not intended to directly sell your services) that can help them, and more.

Next, make sure that the message you give every week during your one-minute stand-up introduction is succinct, to the point, and benefits-oriented. Depending upon how you approach your business, make your benefit statement either very general ("I provide a system for people to create and manage wealth") or specific (I work with families who'd like to easily finance their child's education.")

Then, provide what I call a "How to Know" statement. What this does is to help your fellow group members to identify your prospect.

Note: Any technical information you provide here will be detrimental to your goal. They don't need to know or hear any technical terms—they don't understand them, and they don't WANT to understand them. :-)

An example of a good "How to Know" statement that a person who sells copying machines might give is: "If you're in an office and notice a copying machine with a wastepaper basket next to it filled the rim and overflowing with crumpled up pieces of paper, that's a good sign that copying machine has been breaking down a lot lately and that's typically a good prospect for me."

Notice that there was no talk about the copying machine itself, the "bells and whistles" or anything else? It just showed how to identify a potential prospect.

That's what you want to do with your "How to Know" statement. You are simply teaching your fellow members—your potential referral sources—how to be on the lookout for good prospects.

Next, once you've established a relationship with a fellow group member and you are certain that he or she knows you, likes you and trusts you, you can invite that person to coffee for the express purpose of obtaining referrals from them.

Remember, your referral exchange organization is simply one more profit funnel for you, and the relationships with its individual group members need to be developed and cultivated just like any other relationships.

I hope this helps. Good luck.

Got questions or thoughts about today's challenge or Bob's response? Post a comment.

Comments

[Steve Levy]

Bob-
I started a BNI chapter two years with five other "core" people. Statistically, we are the largest and most successful BNI chapter in the area. Because I handle "high net worth" clients (over 500K), it's axiomatic that numerically, I will not get the same amount of referalls as the Dry Cleaning to your door lady does. Nevertheless, I do get my share of referrals. Why? By doing exactly what you suggest- referring business; doing "dancecards" on a weekly basis so I completely understand their business, and listening intently for key words that help facilitate easy referrals. I agree that having a "how to know" statement is important. When I first joined the group, I tried to be the consummate investment "expert" by using industry jargon no one understood, nor cared to understand. Now, I keep it simple. "I help baby boomers aquire and protect their wealth, so they can live the life of their dreams." I try and drill down regarding specifics. For example, yesterday at the meeting, I stated that a great referral for me this week would be for everyone to focus on friends, family members, or colleagues that have or may be considering changing jobs. Impending layoffs or some change in their life is something else where I concentrate my efforts. Also, I ask them to listen to their friends when the market is plunging (like yesterday) and then they can suggest a meeting with a financial expert for a free consultative review. At the end, I believe in the BNI mantra of "givers gain." You reap the benefits if you truly try and help others build their business. It takes time to build trust in a group like BNI. I have made some great friends and closed a decent amount of business over the past two years.

[Sam Ramirez]

Mr. Burg,

I've had the opportunity to work with a number of advisors who are members of BNI groups. I agree with you, those that have been most successful have given it time and patience.

I've also asked my advisors to find ways that they can add value for their groups. For instance, we are currently coordinating a seminar on Identity Theft for one of the BNI groups that will be sponsored by the advisor, he has asked each member to invite a couple of guests. But my point is that he has earned the trust of the group and they are excited to participate in an event like this. In addition those in the group that he frequently passes referrals to will benefit for themselves.

How do you feel about the value-add approach, of trying to help the group with important topics like this?

[Roy Larsen]

Bob,

I would have to respectfully disagree with your assessment of BNI groups as "Goldmines" for financial advisors. I too have started two very successful BNI groups, both of them getting to 30 members within 2 years. Each was a cash cow for the Real Estate sphere, but the professional services sphere produced results I could have easily acquired without the time invested. I was also a poster child for using every BNI technique known to generate interest including spending a significant amount of time in one on one relationship building. Although I agree with you that a financial advisor should not expect volume, the few I did get were not accounts we would typically embrace. I think most financial advisors learn to be great givers of business but unfortunately in speaking with advisors in numerous BNI and PowerCore groups, most other business people are "takers" and learn little on how to develop realtionships. I would encourage advisors to try the concept, but in my opinion getting even a small amount of decent accounts in the exception, not the rule and most advisors time would be better spent in other endeavors.
Roy Larsen

[Bob Burg]

Hi Steve,

That is awesome! You are a pro, my friend. Congratulations on your success with BNI, which I believe is a really terrific resource for Advisors.

And, yes, Dr. Misner's mantra of "Giver's Gain" really says it all.

Best wishes,

Bob

[Tim Reik]

Regarding the post earlier by Steve: Do you communicate to the group that you only work with 500k and up? Do you have them communicate that to potential referrals? How do you handle it if they refer something under your minimum? I was in BNI for several years and the best referrals I got were from the CPA.

[Bob Burg]

Dear Sam (and, please call me Bob):-),

I agree with you completely. While staying within the format and "System" of BNI, you are creatively finding ways to "add value" and that is always a good thing - a really good thing to do. :-).

And, as you said, it's based on the foundation of the "know, like and trust" factor.

Congratulations on your great work.

Best wishes,

Bob

[Bob Burg]

Hi Roy,

I'm sorry it hasn't worked out for you so far. There seem to be two key things for Advisors who have success within BNI and other referral-exchange organizations.

The first is doing "the right things right."

The second is doing them consistently, over time.

Obviously, as you mentioned, you've done these. However, I also don't know (only because we've never met so I truly don't know) all the circumstances involved.

Because I hear from many Advisors who do attain excellent business from these groups (and knew those who also did so in groups I belonged to when I sold on a local level) I know that these organizations can work.

And, as far as most people being takers instead of givers, if that is so, then your job is to make it in their best personal/business interest to give back to you.

As Dale Carnegie so eloquently wrote, "People do things for their reasons, not your reasons. So, make your reasons their reasons." If they see that by having a give and take relationship with you (meaning, they also have to *give* appropriately to you) it’s going to benefit them and their business, they’ll be that much more likely to seek out the type of prospects for you that you desire to have.

Whichever way you decide to proceed, I certainly wish you the best of success as you continue to serve others and help them create, manage and protect their wealth.

Best wishes,

Bob

[Marty]

Bob,

I feel the BNI groups are what you make of them! I tend to get more out of the one-on-one "dance cards". For example we have a benefits company in the group. At our one-on-one meeting I uncovered that they often identify small companies who do not yet have qualified plans established. Now those referrals are coming to me, and together we are providing a turn key solution (total benefits package). On the one-on-one with a family Law attorney I uncovered that the attorney was working on several ugly divorce cases. In one case the family business was going to be sold off and the assets split, high six figure opportunity. The success I have seen can be contributed to: 1.) Having the right professions in the group 2.) Providing well thought out out 60 sec. commercials that change frequently 3.) Meeting weekly with the members and asking a lot of questions, and listening closely to referral clues 4.) "Givers Gain", have an attitude of helping others first, and you will be taken care of in the end! 5.) Hold a leadership position so you become better known within the group.

Marty

[Bob Burg]

That's superb, Marty. Excellent advice!

Best wishes,

Bob

[Steve Levy]

Bob--
I don't communicate to the group that I handle only high net worth clients because I also do hourly consulting for those under that requirement. CPA's have been the most lucrative source within BNI but that makes sense because they have first hand access to client statements. Nevertheless, I have also found the realtor, mortgage person, and insurance person to be effective referral sources. The key for me has been to not pre-qualify individuals, be on the leadership team, mainly the membership committee, because you can enlist only experts committed and passionate about what they do.

Best,

Steve

[Bob Burg]

Thank you, Steve, for your follow-up remarks. And, everyone else who posted their suggestions, many of which I neglected to cover in my original post.

In fact, if you don't mind, I'm going to share many of your comments from this blog in a seminar I'll be doing next week for one of my client companies. I know the FAs in attendance will benefit from your wisdom greatly.

Best wishes,

Bob

[SM]

While I generally agree with the answer in concept, I feel this kind of networking is fruitless for the financial professional.

I am a 24 year seasoned veteran, and have had memberships in numerous civic, charitable, and business networking organizations over the years. What I have found is that the typical network group member doesn't have the "intimate" relationship with their clients/customers necessary to provide meaningful referrals. Financial professionals know very intimate details about their client's lives. About the only other professionals that have that kind of relationship are CPAs, Attorneys and some Real Estate agents and Mortgage brokers.

Therefore, unless those other professionals are present, the likelihood of doing business beyond the immediate members is remote. We can give numerous referrals to florists, massage therapists, realtors, and other "service providers" without ever getting much in return simply because they don't know their "customers" intimately. The other exception is small business owners who can refer other business owners for retirement and estate planning once they get to know and trust you. I would encourage financial advisors to network with other "business professionals" rather than the "Le Tips" of the world.