Are Referral Groups Still Worth Your Time?!?

Short answer:  Maybe

Longer Answer:  It Depends on You and Your Group

With the rapid advance of online networking opportunities I felt it worth the time (ha) to revisit whether or not analog (offline) referral/networking groups were still a valid option for sales professionals.  In other words, have referral groups 'jumped the shark?"

There are two factors to measure when honestly evaluating participation in a referral group:  You and the group

Questions for you to answer:

Do you know how to sell and/or have any professional sales training?  

If not, you almost certainly would benefit more from paying for and attending almost any sales training before joining a referral group.  One of the true cancers that afflicts many referral groups is that they are a 'refugee camp' for salespeople that don't want to sell or (in some cases worse) don't want to admit they are in sales.  If you are one of those people, please don't be a networking vampire (that salesperson that takes and never gives) and join a group that has people that love to sell and identify as such.  You will have a terrible experience in the end.

Do you have the time?  

If you are struggling to make quota as it is and/or have an overbearing Sales Manager micro-managing your every day...a referral group might be a tough sell if it occurs during the 'sales day.'  In cases such as the above, you are probably better off getting your regular prospecting pipeline under control and into production before adding another task.

Know this:  Every referral group that has any significant membership represents a MASSIVE time commitment in order to get results.  That time commitment can absolutely pay off, but, it is far from guaranteed.

Do you have contacts and are you willing to share them?

 If you are starting out in your sales career (Congratulations by the way!) and/or have just moved to a brand new territory...a referral group may not be the best option.  The challenge is this:  What do you have to offer the group?  If you don't have a network you are quite the speculative addition to the group.  Established groups that miraculously have an opening for you and just as miraculously are willing to take a flyer on a brand new sales rep are few and far between in my experience.

Are you open to introducing your customers and network to new sales professionals?  If not, don't waste your time and the groups (see networking vampires above).  There is nothing wrong with developing an awesome referral pipeline for yourself without being a member of a referral group.  In some cases, it is easier and far more effective.

Those are some basic questions for its time for the referral group!

Questions about the group:

Are their members in the group currently that are in industries that are likely to refer you?

Not an in/out question, but, it is absolutely critical.  If there are current members that are in your 'contact sphere' (already selling to your customer base) long have they been in the group, are they open to considering referring to you and how serious are they about the group (are they making real $$?).

If there aren't current members in that mode...would you be able to load in to the group several of your own relationships and just leverage the group membership to have those current relationships increase their referral production?  This can be absolutely awesome.

Does the group embrace the sales profession and selling?

Prospecting (See Jeb Blount's fabulous book Fanatical Prospecting) is tough, even in the referral zone where I love to reside.  If the group is in denial about the realities of sales, turn around and sprint for safety in the real world.  I am sure (hopefully) that you already have plenty of friends so don't be a member of a support group...only commit joining a group that is as serious, ore more, about your profession and how it really works.

Groups that don't like sales...almost always pass crap referrals and have significantly more 'drama' between members as it is a continuous personality game.

Is the group professional and does it have standards for membership?

I don't recommend considering a referral group that has the 'can you fog the mirror' standard for accepting new members.  If there isn't an interview process, at a minimum, that does a credible job of vetting new members...that is a bad place for you to be.

If the membership is exclusive to professional categories (almost always the best idea), how do they make sure that you aren't stuck with bad members that don't make meetings or contribute in any real way?  In other words, how do the cull the herd?  If they don't have measurable ways to monitor performance...removing members always gets nasty and that makes for very, very, low ROI for you and the group.

Is the group part of a larger organization or independent?

Pros and cons for either in my honest opinion.  Larger organizations, like many religious denominations, offer some increased oversight and problem solving.  They also can make you the victim of a bad actor in your region and your group branding is dependent/affected by the larger organization for good or bad.

Independent groups offer less oversight, but, more freedom.  They also tend to offer less training and support, but, that is not a universal rule.  I have seen some amazing independent groups in my day that have been far superior to larger (even international) organizations.

It all comes down to the group and to you.  Evaluate both, brutally and directly, and you will have a decent shot at determining if the massive time investment is worth it.  Like any investment, it pays to diversify.  Don't forget to invest in other forms of marketing and you will have a better chance of referral groups paying off.

In conclusion, I am not pro or con to joining referral groups.  I just counsel my clients and you the reader to take a serious look at the ROI.  Don't buy on emotion in this case.

All the best,


I am a speaker, author and consultant on all things #referrals and #sales. Passionate about integrating predictable referral marketing with sales results. Husband, Dad #blessed

One of my favorite descriptions of what I do: 
"If you are really serious about learning word of mouth marketing, and are really serious about gaining more referrals on purpose rather than by chance, then Mike is your goto resource. "How much money have you made?"
Victor Clarke, Be Better Do More

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