Why you should join a referral group and how to choose a good one

If you recently started your own business, you’ve probably discovered how extremely difficult it is to generate sales.  All failing businesses have one thing in common… lack of sales!  Often, business owners underestimate the degree of difficulty and effort involved, and how long it actually takes to become a proficient sales person.  In case you were wondering, here’s what it takes:

  • You must have an expert understanding of the product/service you provide.
  • You must have an expert understanding of the industry and problems your product/service solves and how it provides value to your customers.
  • You must clearly articulate the benefits and value you can provide in a minute or less.
  • You must have a large network of influence.
  • You must exude confidence.
  • You must be professional.

But what if you’re just starting out?  Obviously successful entrepreneurs weren’t born confident, professional or with a large network so, how did they do it?  Well, they recognized what was required of them and what their deficiencies were, and they worked hard to overcome them.

What is a referral group?  Simply put, it’s a group of business owners and sales professionals who come together once a week to exchange qualified referrals, leads, and networking opportunities with one another.  This is a promising premise but it only works if the referral group is properly run.  You could join a local referral group, spend months of your time and large amounts of money in membership fees, breakfast fees, course fees, etc. and still get nothing in return.  To avoid making a bad decision, ask the following questions before committing to a referral group:

  • How do new members join the group?  This is a very important question to ask since it has a direct impact on your ability to exchange referrals.  You need to know that there is a vetting process in place, and that process is rigorous enough to filter out applicants with a limited ability to exchange referrals with others.
  • Who's got the power?  Most referral groups are run by members, meaning the meeting agenda can easily be manipulated (or ‘hijacked’) to suit their own needs.  This leads to friction and lost productivity of the group.  The vast majority of referral groups are run by the members themselves, meaning the agenda can easily be manipulated (or ‘hijacked’) to suit their own needs.  This leads to friction and lost productivity of the group.  Look for a referral group with a decentralized power structure, i.e. no one members is more influential than the others, this makes for a higher performing team.
  • When are membership fees due?  Most referral groups will charge you an annual membership fee as soon as you join (before you get a single referral).  Look for a referral group that charges on a monthly basis, this way, if you decide that the group doesn’t work for you anymore, you can leave at any time without having wasted thousands of dollars.
  • Are there hidden fees?  Some referral groups will make you attend unnecessary and costly courses, or make you pay for attending the mandatory meetings, or even mandatory fundraisers and donations.  A good referral group will only charge you membership fees that were previously discussed and agreed upon.
  • How would this group help my professional development?  Every new business owner could use help articulate the benefits of their product/service.  A good referral group will give you valuable feedback, help you articulate your pitch, and teach you how to maximize your chances for referrals.


Receive business referrals, network with other business owners, and fast track your business growth with the least amount of time commitment.   We use technology to make referral groups much more efficient and much less expensive.  Contact Us Today