The Networking Referral Trap

Look, I get the appeal of business networking.

It’s a better way to generate business than cold calling and getting rejected hundreds of times. And it’s a good strategy if you’re not at the stage of business where you can be spending $2,000/mth on ads.

The idea of generating referrals is attractive, which is why you’ll put up with idiots who love to shove their business cards in your face, and those who pitch you every chance they get.

You see the potential of growing your business after meeting some decent people at networking events, chamber events and mixers… and maybe even come across the passionate few who swear by the networking model.

With a burning desire to generate more business, you decide to join membership groups like BNI, TEAM Referral Network, ProVisors or Bx Networking… and feel excited about the new possibilities.

A few months go by…

You grow tired of listening to the same 30 second pitches around the room, and feel the frustration building over time…

Somehow, the referrals leads you’re getting are mostly tire kickers instead of quality prospects.

Your results are hit and miss…

Networking doesn’t seem to be working for you as well as you thought it would, and it starts to feel like a waste of time especially if the referrals felt forced and artificial.

You don’t see a great ‘Return on Effort’…

And wonder if your time and money can be better spent somewhere else.

The reason why the idea of “referral leads” from business networking sound so appealing is because we immediately associate “referrals” to “warm leads”.

I mean, who doesn’t LOVE referrals and word of mouth business?

No business owner in their right mind objects to that!

For some reason, our brains automatically translate “referral leads” into “prospects who are ready to buy” because deep down that’s what we all want.

Most people don’t realise, they are actually 2 different things.

We dream of prospects banging down our doors with their credit cards in hand.

The truth is, just because prospects came from a referral, it doesn’t mean they are ready to buy, or that they are a good fit to do business with us.

And that’s why we fall into the trap of faux thinking because a recommendation from someone we know doesn’t mean they are ready, willing and able to buy from us!

It’s the networking referral “illusion”.

We find out the hard way after we’ve invested our time and money only to realise it’s not as easy as it sounds.

Here’s the problem with networking referral leads that no one talks about…

You don’t know whether they’re tire kickers until you spent time talking to them.

Because the fact is… most business networking results are hit and miss.

Their success and quality is dependent upon various factors that you have no control of:

  • The quality of the people in the room and how they show up
  • How each person see business relationships (transactional or relational)
  • Whether they genuinely want to help you and the group succeed

While the big promise of business networking groups is to help you “generate referrals and new business”… You can’t help but feel that their big promise falls short.

It can feel like a roller coaster of emotional highs and lows…

The excitement when you get a referral, then the disappointment when you find out (the hard way) that they are not a quality prospect for you.

Look, I’m not saying business networking doesn’t work.

Not at all.

If you invest your time building genuine relationships with people, it can work very well for you if you end up connecting with the ‘right group of people’.

But the reality is, business networking falls short for a lot of people because it’s not the type of marketing strategy that you have a lot of control over since 50% of your success is entirely dependent on other people.

More often than not, networking referral leads are still teetering on the “cold” side even if they came from a “connection”…

Which means you end up wasting time talking to prospects who are not a great fit for your type of work.

Networking referral lead quality ultimately comes down to 2 things:

    1. How well you can communicate and articulate:
      • what you do
      • the problem you solve
      • how you’re different
      • who your ideal prospect is

Most people struggle with their “networking pitch” and “messaging”.

2. How well other people:

      • understand your business, your niche and your industry
      • the problem you solve
      • know, like and trust you to refer you
      • can clearly articulate what you do and the problem you solve to others

That’s A LOT of variables to get right in order for other people to refer you quality prospects.

Membership based networking groups like BNI are supposed to train you on how to educate people in the room to give you referrals…

They train you on how to bring you up in conversations so you can make better connections.

But a good majority of people in networking groups don’t do it that way.

Half the time, people just give out your card if they come across someone who they think “might” need your help, which means that referral to you is still cold.

So you still have to spend time talking to them, figuring out whether you can help them and whether they’re in a position to buy from you.

At the end of the day, people are people.

People default to their habits (good or bad)… or are not committed enough to changing their own networking behaviours and how they build relationships.

This is why networking results can be unpredictable because you have no control over other people’s behaviour or how they show up.

Because of that, your networking success rate maxes out at 50% even if you do everything right on your part.

When you get a referral lead from your business networking efforts, you still gotta work to try and convert that ‘cold’ referral lead into a sale.

That’s a difficult task unless you’re a trained salesdog and love hardcore closing, pressuring people to buy and overcoming objections.

If you’re anything like me, you probably prefer to sell your services in an ethical way without being salesy or pushy, and do it in a way that leverages your time.

Instead of playing referral leads roulette, where it feels like a crapshoot not knowing what type of prospects are coming to you…

There’s a better way.

A smarter and more effective way to get prospects to qualify and identify themselves as a quality prospect to you, before you spend time talking to them.

A better way to control how people come into your world.

I designed a way that allowed me to filter out price shoppers and tire kickers while attracting 5 Star Prospects to me without needing to sell myself.

So when they showed up at my door, they’re asking “When can I work with you?” instead of “How much do you charge?”