Networking groups help build bottom lines
TRAVERSE CITY – They go by many names. Lead groups. Networking clubs. Referral programs. No matter what you call them, professional lead exchange groups are growing in popularity in the region-and, according to some business owners, lending a significant boost to their bottom lines.
Jim Dagwell, owner of Traverse Tax & Accounting, heads up one of several local chapters of Business Network International (BNI), the world's largest business referral organization. He explains the group's premise boils down to one simple idea: What goes around, comes around.
"The BNI concept, founded by Ivan Misner, is based on 'Giver's Gain,'" said Dagwell. "The more you are willing to give freely to help others succeed, the greater your life will be enriched."
BNI chapters consist of local professionals from various segments of business or industry. No more than one member per profession is allowed to join, and participants must represent their primary occupation (no part-time jobs or side businesses allowed). Members meet each week to share leads, exchange referrals and give presentations on their products and services.
While many members strike up friendships or social relationships within the group, the meetings themselves are strictly business. Members are only allowed three absences every six months, though substitutes may be sent in a member's stead. In addition to initial registration fees, participants must also pay annual fines.
This structured format, says fellow BNI member and CPA Ron Harris, helps ensure the group's success. "The way BNI operates makes it unique (from other types of lead groups)," he said.
Max Binkley, president of Northern Business Network (NBN), agrees that attendance is important for referral groups, but prefers a more casual approach to membership.
"We don't charge any fees for participating, we don't require that members bring referrals each week, and we don't mandate attendance or substitutes at each meeting," he said. "We want members to be there, to build trust and relationships, but it isn't required."
That type of relaxed program also suits Michele Mort. A realtor at Coldwell Banker Schmidt Realtors, Mort initially began her lead group as an attempt to open the sixth and final BNI chapter in the Grand Traverse region. After failing to drum up enough interest, she, along with two partners-Jim Poteet of Chase Financial Services and Colleen Mageau of SRC Mortgage-created their own no-cost, low-requirement group called GT Biznet.
"One issue many people had was trying to attend morning meetings," said Mort. "We had a number of single parents who needed to see their children off to school in the morning. So we scheduled bi-weekly meetings at lunch instead."
The format was so successful, Mort reports, that almost immediately she began receiving calls from other professionals interested in joining. "We have members requesting more frequent meetings now," she said, "and we also meet for happy hour occasionally for informal networking opportunities. There's a real sense of respect and camaraderie among our members. I always leave our meetings feeling inspired."
Bruce Falberg of Power Leads, another area referral program, believes social interaction is an important aspect of lead groups.
"That's something that sets our group apart; we create social situations," he said. "Many members meet for an after business beer once a week. We've also gone boating in the summer, and we have a few holiday socials each year."
Ultimately, such groups exist primarily for members to generate new business opportunities. In this respect, Falberg says Power Leads has exceeded his expectations. An associate at Wirt Financial & Leasing Services, Falberg estimates that members of Power Leads have exchanged more than $2 million in business leads in less than one year.
"I've been to other groups in the TC area," he said, "and ours has been the most productive by far in terms of sales volume."
Corey Phelps, head of Power Leads and a consultant at Versatile Mortgage Funding Co., attributes the group's success to the strength of member referrals.
"We focus on warm referrals, not cold calls," he explained. "We expect a member has informed the referral they'll be receiving a call from another member of the group. Our focus is on quality of leads, versus quantity."
Harris has also seen a direct impact on his business, Harris Group CPAs, because of his membership in BNI.
"The amount of people that 30 people know is amazing," he said. "If I sat down and thought about it, I'd guess that 50 percent of my clients were referred to me either directly or indirectly through a contact made at BNI."
Binkley, meanwhile, states that "every member of Northern Business Network has benefited financially by participating in the group" and that his involvement helped his business, V2K Window Décor & More, have a prosperous first year.
Such success stories, Phelps explains, are why lead groups continue to grow in popularity.
"I've been involved with networking groups for more than eight years, and I can attribute 40 percent of my annual production directly to these groups," he said. "When properly utilized, a weekly referral group can replace a full day's worth of marketing in the field. Ultimately, our members enjoy more free time with their families and greater results in their businesses." BN