POWER THOUGHT OF THE WEEK: Networking Power Self-Assessment, Part 3

Power Thought of the Week with Patricia Parham, Ph.D.

Referrals

You know that people understand your business when they make referrals. These are based on familiarity and trust – trust that you will deliver the quality of products and services promised dependably. Close relationships with members in your network lead to referent power, e.g., you gain from the reputation of those with whom you associate and they gain from being associated with you. Be a wise choice and choose wisely, for it is true that “birds of a feather, flock together.”
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POWER THOUGHT OF THE WEEK: Networking Power Self-Assessment, Part 3

The Rapid Growth of Manhattan BNI

By Bruce Newman
U.S. Mid-Atlantic Bureau Chief
(New York, New Jersey, Pennsylvania, Delaware, Maryland, Washington, DC, Virginia, West Virginia)

I recently caught up with Todd Hallinger, executive director of the Manhattan BNI. What caught my attention and made our conversation so noteworthy is the rapid growth of Manhattan BNI chapters from none in 1996 to 49 chapters with close to 1,000 members at present.

How long have you been involved with BNI?

I started as a member in 1993 and became an assistant director in the beginning of 1994 when I started helping J Lance Mead, the Westchester executive director. In 1996, my partner, Michael Brathwaite, and I purchased the Manhattan territory and started its development. Currently, we have 49 chapters with close to 1,000 members. Within three years, we expect to have 75 active Manhattan chapters.

I heard that BNI did not originally believe that BNI groups would succeed in New York City. Why did you disagree with that assessment?

BNI has still not caught on in most cities mainly because of its cost and reliance on commuters. Requiring commuters to attend and participate in early morning meetings every week has proven to be a challenge. One of the reasons why we have been successful is because we have such a large and diverse population within a small geographic region. It’s important to realize that our 49 chapters are within a 1.5 mile radius of each other and tap a population of over 6 million. This year we opened the first Harlem chapter as well.

There are very few chapters in inner cities relative to suburbia. In the 90’s, technology helped fuel BNI's rapid growth to the 39 countries, 110,000 members and 5.5 million referrals that generated $2.2 billion in new business last year. There are currently 211 chapters and 4,100 members in New York State, alone.

The rapid growth of BNI was also helped by the publication (and adherence to) a series of networking books by Dr. Ivan Misner, BNI’s founder.

In part, as a result of our model, chapters in other cities are beginning to duplicate our success. For example, Philadelphia has shown dramatic growth and now has 15 chapters.

Why have you been able to grow so quickly?

Foremost, we’ve hired very good people. Our two executive directors and 13 assistant directors are responsible for visiting each chapter every 6-8 weeks and supporting them as best we can. We try to coach networking and long term relationship building. We have also utilized technology to develop a website that has dramatically improved how we run our organization and its exposure. Our website lists all Manhattan BNI chapters and members and provides information on each of them. We also regularly access the data on the website and encourage each chapter to create its own independent website.

What training do you provide?

Each chapter has three leadership positions: the president, the vice president and the treasurer/secretary. These chapter leaders receive training twice a year and have their dues waived while serving. We also have a member success program [MSP] run by assistant directors for new members. This includes a crash course on how BNI can help them grow their business by providing tools for productive networking, information on Manhattan BNI and how to use our website.

There are many other networking organizations available. What makes you different?

The two biggest things that separate us from our competition are our agenda and that we require a weekly networking meeting. This is the hallmark of BNI. The only way to gain trust is to attend the weekly meeting. All members must adhere to our strict but fair attendance policy or they are asked to leave.

Most of our competition doesn’t require that people attend their meetings – just that they pay their dues. As a result, a group that boasts 25 members may only have 12 people that regularly attend. Sometimes, they start strongly but people don’t get much business so they drop out.

We’re also at the low end of the fee scale. We charge $430 for the first year and $330 for each successive year. Breakfast is an additional expense - usually around $800 - $1000 depending on the chapter and the location. We don’t have corporate memberships. We encourage most people to pay individually since they are more apt to participate if they have to pay for their own membership.

What is the general composition of each group?

Most of our groups are comprised of small business owners and sole proprietors. We have several large companies – most notably, banks, brokerages, insurance and mortgage companies, but they are usually comprised of sales people and account executives, not senior staff.

We have a niche. We’re not the top end of the networking rung. Instead, we have sole proprietors, partnerships and small businesses and that’s who we cater to. It doesn’t mean our members don’t know or interact with executives, just that they are not typically our members or our target market. Since our members know these contacts, we encourage their inclusion as a referral over time.

Each week we try to train a sales force - not to make a sale but to talk about what they do; that’s the goal of our set agenda in which everyone plays an active role. BNI employs a long term strategy whose effectiveness gradually increases over the first 8 to 18 months. This is the period of time that people need to gain trust. Essentially, it is a function of trust over time, repetition and a constant presence. We call this the confidence curve.

Our average number of members per chapter is 21. We have 30-40 members who have been with us for over 10 years. 33% of our members have been with us for over five years. Our most productive chapter [Ch. 12] generated $1.3 million in referrals in 2007 and approximately $1.8 million in confirmed, closed business in 2008.

How do you differ from other BNI chapters?

Because we have 49 chapters within 1.5 mi. radius, we do have issues with people chapter shopping. This dramatically differs from most BNI regions that usually have only one chapter in a town. We also average 5 guests per chapter a week because of our large population.

We encourage dress codes and push the chapters to hold meetings at more upscale locations – not diners – such as nice restaurants, conference rooms, banquet halls, etc. to encourage professionalism and attract more upscale members. (Manhattan is a whole different world).

The bigger the rolodex, the more success you will have in BNI. We prefer successful professionals with a large database of contacts interested in sharing referrals to the person who is just starting out and more interested in acquiring leads.

What industries fueled your growth?

We look at four broad groups – health care, real estate, events and finance. Legal is also strong. Real estate and finance have been particularly strong in New York. We currently have a waiting list for realtors, mortgage brokers, financial advisors and insurance agents.

How do the chapters promote themselves?

Besides their website, they also get a listing on our website. We have also advertised on Craigslist.org and Crain's for Business. Word of mouth has been our most important method of promotion. It’s very effective and mutually beneficial to bring in people with whom you have a business relationship.

We encourage members to visit and substitute at other chapters. This can help different groups learn about various successful methods and strategies.

Do you have any final thoughts on BNI or networking in general?

Based on my experience I would have to simply say that “givers gain”. Our agenda and BNI's networking books are the major components that have made BNI and Manhattan BNI the world's largest network organizations. BNI has also been helped by a perceptible shift in the acceptance of network marketing as a viable tool for business growth. Whatever networking vehicle you use, the most effective one is one in which you generate trust by learning about what other people do, what they care about, and how you can help them.

Bruce Newman is a consulting guru and the Vice President at The Productivity Institute, LLC (http://www.prodinst.com/) which provides prodinst by matching the specific consulting needs - for products and services - of any company to rated outstanding consultants with the specific knowledge and expertise to meet those needs. Any company that wishes to improve their productivity can sign up for this free service and be contacted by up to five rated outstanding consultants. Also available is an informative blog and free newsletter. ________________________________________________________

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The Rapid Growth of Manhattan BNI

Good Customer Service Alone, Does Not Mean Referrals

Networking Success with Dr. Ivan Misner

Ivan's section is sponsored by qAlias.com

Many entrepreneurs are under the impression that if they just provide good customer service, people will refer business to them. Just like that. However, they only have part of the picture. Sure, customer service is important. But, good customer service is just a prerequisite...it’s a minimum expectation.

Think about it. Would you refer somebody to me if I provided lousy customer service? Of course not. You’d end up looking like a dope in the eyes of the prospect. Your own credibility would suffer.

Good customer service is part of what the prospect expects when you refer him to me. If you’re recommending me to him, I must be something pretty special, right? And if I want to keep that customer coming back, I’ll need to give him more than the minimum expectation of simply good customer service. I’ll need to provide great, outstanding, memorable customer service to really stand out.

On several occasions, my colleagues and I have discussed the point, which I made in my book, The World’s Best Known Marketing Secret, about how people were under the delusion that good customer service alone was enough to enable people to build their business through word of mouth. We shared stories about people we’d met over the years who had gone out of business by just sitting back, and waiting for good word of mouth to rescue them. This got us thinking and talking about all the other delusions people had about networking and referral marketing…including the misconception about customer service we are talking about here.

People don’t refer business to you because you meet their minimum expectations. They refer you because they expect you to do a good job which, in turn, enhances their relationship with the person they are referring. They may not even be doing business with you, so customer service may not be an issue with them personally—but of course they expect you to provide outstanding value to the prospect. They want the prospect to come back to them and say, “Thanks for sending me to Joe Trueblue. He had just what I needed, and the service was great. You sure know some outstanding people!”

Your referral source has a strong interest in making sure everyone comes out a winner. She knows that when the happy customer comes back to you again and again, you’re more likely to send business her way when the need arises. The great service you provide to the customer comes back to you in the form of a stronger relationship with your referral partner.

One of my colleagues is Bob Burg, author of Endless Referrals, and here is his take – on what it ‘takes’ – to consistently receive referrals:

We all know of companies and salespeople that couldn’t stay in business, despite having superior products. We’re also familiar with companies and salespeople that were remarkably successful with just an average product.

Of course, having an excellent product is important. However, technology today has made that commonplace and expected. In order to have qualified prospects “beating a path to your door,” you must be able to network and to market yourself and your product or service in such a way that it makes people want to do business with you and refer you to others. You need to provide them with such a great buying experience that they know they made the right decision. However, to get them there in the first place, it’s the networking and marketing that’s most important.

Being in a referral group like BNI is one of several important parts of an effective word-of-mouth marketing plan. One of the things these groups emphasize is that you need to be very specific in what you do and in how your product or service is uniquely valuable. If you use general terms, you’re at the lowest level of competitive effectiveness. And if you say, “customer service,” that’s not what people are buying.

Another of my colleagues, says that you don’t sell the process – you sell the result:

Talking about what you do does not motivate people as much as what happens to their client or friend as a result of what you do. I used to sell copiers, and I never met anybody who was buying good customer service. They were buying the ability to make photocopies quickly and reliably. They weren’t shopping for customer service, because that’s a prerequisite. It’s part of what creates that end result.

As I have pointed out for many years, unhappy customers are eleven times more likely to talk about your business than happy customers. Good customer service only reduces negative word of mouth; it doesn’t necessarily increase your business through positive word of mouth.

Now, it is important to keep this in mind: If you provide outstanding customer service, AND your referral partner has experienced that as a customer, it can definitely increase the number of referrals you receive. As already mentioned, good customer service is a prerequisite for cultivating your referral network…but great customer service to a referral partner can be a jump start!

Referral networks and other referral settings often feature third-party testimonials, in which someone who has used your product or service (in this case, your referral partner) tells the group, “I’ve used Moe’s products, and I’m here to tell you, they’re the best I’ve ever found.” Hearing it directly from someone they know is often enough to get people to believe it and act on that belief.

I often tell people that testimonials are a very important part of the referral process, especially within referral groups. Never underestimate the power of the third-party testimonial. When you stand up and say, “I’ve used this person, and you should use this person too, because . . .” and then go on to explain why, it makes a huge difference in how people view that service provider. Your experiences become my experiences. This, of course, makes it much easier for people to refer that provider…even if they haven’t personally used his services yet.

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Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI (www.bni.com), the world’s largest business networking organization. His latest #1 bestseller, Masters of Sales can be viewed at www.MastersBooks.com. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company (www.referralinstitute.com). He can be reached at misner@bni.com .

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Good Customer Service Alone, Does Not Mean Referrals