Are leads groups the best use of your time when you’re trying to market and grow your business? Maybe. Maybe not. I used to lead a business networking group, and believe me, it took enormous time out of my week — every single week. Even if you’re not the leader of a business networking or leads group, you’ll invest at least a couple of hours a month, or a week, or however frequently the group meets. And think about it, as a business owner your time is your most valuable commodity.
Not to mention, networking and leads groups usually require membership dues, so there’s that, too.
A leads group should be worth it, or why do it, right?
Let me ask you this: What is the best kind of referral your business can ever get? One from a satisfied customer, right? That’s not what most leads groups are all about.
Leads groups provide opportunities for participants to refer potential business to each other. BNI (Business Network International) for instance, is well known, located everywhere, and has a formalized structure. Chambers of commerce often have leads groups as an option for their members. Look through your local Meetups, and you’ll find all kinds of other configurations.
Weighing the pros and cons of leads groups
There are some positive aspects to getting together with a determined set of people each week, bi-monthly, or monthly. For one, you create top of mind awareness and can become known as “that guy (or gal)” for your professional specialty. Your group can also be a wonderful “safe” place to perfect your 30-second introduction and get constructive feedback on your business.
What are the downsides?
In reality, there lots of professionals who do exactly what you do (nothing is guaranteed). Most business networking and leads groups limit membership to one person per category (insurance, real estate, marketing, accounting). That can seem like a huge plus to an entrepreneur hoping to build his or her sales pipeline. Where it gets tricky is the expectation that the other members of the group will always refer to you. Think about it, the types of professionals that tend to join a networking or leads group are usually go-getters. They are going to lots of events, joining lots of groups, and talking to lots of people — and know multiple professionals who do exactly what you do. When there is the opportunity to refer, there is no guarantee it will be to your business.
There can be enormous pressure to give referrals. Sometimes there are groups (BNI and others) where members are required to pass leads in a very public setting, and are required to earn points for attendance, leads given, one-on-one meetings, etc. I have heard many a colleague lament the pressure to give referrals when there may not naturally be any to give. What ends up happening? You spend your valuable time following up on prospects that may or may not be a good fit for what you offer. You’re left pitching to a prospect that isn’t interested.
On the other hand, there may be little to no pressure to refer. There are a few business networking groups that don’t have quotas their members must meet. In fact, I used to lead a group like that. The problem? While you can network with some great professionals, the lack of pressure to refer can cause some members to take their foot off the gas.
“What is the best kind of referral your business can ever get? One from a satisfied customer, right? That’s not what most leads groups are all about.”
How you should be thinking about generating new business
To be clear, I’m not saying that all forms of networking are bad. Building relationships and strategic partnerships is extremely important — and I don’t think leads groups are the best way to do it. Instead, here are some tried-and-true lead generation tactics:
- Recommendations from current customers. Nothing quite compares to a referral from a satisfied customer.
- Smart networking. Your goal should be to build strategic partnerships, which you can read more about in our previous post, All coffee’d out? Smarter networking yields better results!
- Inbound marketing. Provide prospects with content that provides something of value — helpful, educational, interesting. Demonstrate your expertise and how you can help solve their problem. When they are ready to purchase, you have already created a warm lead — and they don’t feel like prey.