Featuring guest co-author Beatrice Sparacino

When you give a referral to someone, you give a little bit of your reputation away.  When you give a good referral, it enhances your reputation. When you give a bad referral, it hurts your reputation.  The referral process works most effectively when you know, like, and trust someone. Trust is particularly important; therefore, referrals and trust go hand in hand.

So if trust is important to the referral process, how do you expedite it within the context of networking?  BNI can be an accelerator, reducing the time required to build trust between individuals. One of the best ways to accelerate trust is through regular 1-2-1s. Research involving hundreds of BNI members in Europe has concluded what we’ve believed in BNI for many years. 1-2-1s can have a direct impact on referrals passed within a chapter.

The co-author of this article, Beatrice Sparacino, found this to be the case in her recent thesis from the University of Bocconi in Milan, Italy.

The 1-2-1 process allows members to deepen mutual knowledge and develop better relationships with each other. It is building this personal connection that helps to expedite the referral process.

What’s key in conducting an effective 1-2-1 is that it be structured and social. It needs to be the right combination of both a social discussion along with enough business and professional information to allow both parties to get to know one another better. As they continue the process, they will naturally discover overlapping areas of professional and personal interests.

One of the BNI tools that we recommend to help achieve this goal is the GAINS Exchange. This instrument is a great tool to use in order to get to know people better and to help find overlapping areas of interest.

We know that the quality of the 1-2-1 is important. What’s interesting to see as a result of this research, is the quantity of 1-2-1s is also very important.  As you can tell in the graph here, there is a direct, linear correlation between the number of 1-2-1s conducted and the number of referrals given and received! Those who do three or four 1-2-1s per month both give and receive almost double the number of referrals as people who do only one (or less) 1-2-1 per month.

The bottom line here is that if you do three or more 1-2-1s per month, you will be more likely to give twice as many referrals – and more importantly, you are more likely to receive twice as many referrals as people who do one (or less) 1-2-1 per month!

Once you know someone and begin to develop a level of trust, you are clearly more likely to refer this person. There is a lot of anecdotal evidence to support these findings. For example, Episode 191 of BNIPodcast.com includes a great story about a BNI member named Allen who was very concerned after the big recession of 2008 hit. Allen was in the commercial real estate industry which was decimated by the recession. After he joined BNI, he committed to doing as many 1-2-1s with members as possible. He did so many, that he actually won awards in his region for doing the most 1-2-1s and for having given the most referrals in the entire region that year. But what was most interesting, was that we discovered that by doing these 1-2-1s, he actually generated more business for himself than he had ever generated before (recession or not)!

The Milan study clearly shows hard evidence of what Allen’s story suggested: namely, there is a direct corelation between the number of 1-2-1s carried out and the number of referrals generated: the higher the number of 1-2-1s the higher the referrals.

BNI provides members with methods and instruments to activate this process. But as results show, BNI membership is a little like a gym membership: paying the subscription to get fit is not enough. You need to actually show up and work out in order to get results. BNI functions the same way: the more effort you put in, the better the results.  So – start setting up 1-2-1s with your fellow members today!

We’d love to hear your story about doing 1-2-1s and how it’s helped you in BNI.  Please share your story below – or feel free to comment on the results from this study.

Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chief Visionary Officer of BNI, the world’s largest business networking organization.  His new book, Avoiding the Networking Disconnect can be viewed at Amazon.com.

In the early 1980s, John Naisbitt wrote in Megatrends about the emerging importance of the networking process in society. Later, Tom Peters wrote in Thriving on Chaos that this “process can be systematized.”

When you stop to think about it, these two statements weren’t made all that longago. Networking and relationship marketing is a fairly new kid on the block. From the mid 80s to the 90s, systems and structures began to emerge that shifted a lot of business owners from a single-minded focus of direct selling to a broader scope which included relationship marketing and networking.

There are several emerging issues and trends surrounding the process of networking that are being created out of the need to find an effective way to develop business for entrepreneurs and sales people in this new century. I will address three of the most prominent trends that I believe will become more important in the coming years.

1. Online AND face-to-face networking will both continue to flourish

I’m a proponent of online networks like Ecademy.com and others. I think they will continue to grow successfully and help many of their members; however, they are not the final answer to business marketing or to networking. They are another great tool for people to connect with others (especially outside their local geographic area).

On my Referrals For Life Blog (http://referrals.ducttapemarketing.com), I recently had someone who said: “I don’t know that it is true anymore that referrals are about relationships.” He went on to basically say that technology is changing the rules and that just participating in a website will be good enough. Well, in one word, I’d have to say…. WRONG!

Referrals are, and will be for the foreseeable future, all about relationships. Whether they are relationships built online or face to face – they will still involve relationships. People refer people they know and trust. They will not regularly refer someone just because they are listed on a website – that’s called advertising, not networking.

Online networking works, but relationships must still be part of the process. Using the internet to exchange ideas, share knowledge and increase your visibility will be imperative in the coming years. Virtual networking is a trend that is really catching on in many circles. Some people involved in face-to-face networking feel threatened, as if online networking is going to replace their tried and true system.

Those who foretell the demise of face-to-face networking fail to note one important thing… the facts. Face-to-face networking groups continue to expand. The growth rate of my own referral networking organization, BNI (www.bni.com), bears this out. Since the internet first became popular in the mid90s, BNI has experienced a 1,186% growth rate. That is NOT a typo!

The more “high tech” business owners become, the more and more they really need to foster those “high touch” opportunities that face-to-face networking affords.

Virtual networking can be an effective way to increase your business and the internet can certainly be a great tool for staying in touch with those with whom you are currently networking, but I don’t think it will replace face-to-face networking in our lifetime.

Technology flattens the communication hierarchy and provides opportunities to improve your networking efforts – not replace them. I believe people who understand this will begin to effectively utilize technology without replacing relationships to take their marketing to new levels in the years to come.

2. Networking & Social Capital Education

Don’t hold your breath for the colleges and universities of the world to begin teaching networking and social capital. At this point there are only two colleges in the world that offer regular, core-curriculum college courses on networking and social capital. One is at Davis College in Ohio taught by Debby Peters and the other is at the University of Michigan taught by Wayne Baker. That’s it – two colleges!

The college and university systems are behemoths of bureaucracy that are so far behind the curve of small business development that I’m beginning to despair that they will ever catch on. Most professors have never had a real job in the business world and are completely out of touch with what is happening in real life, especially in small business.

I predict that the current trend in networking and social capital education will emerge in the form of private professional training organizations in much the same way that private industry has controlled the educational market on “sales techniques” (another area that colleges fail miserably). Companies like the Referral Institute (www.referralinstitute.com) that are offering a series of trainings specific to the techniques and systems of networking, social capital, and referral marketing are starting to pop up with a very refined and polished slate of seminars and trainings for those business owners who want to learn how to harness the power of word-of-mouth marketing.

3. Small companies will continue to have the edge over big companies relating to business networking

For the most part, big companies are clueless about building sales through the networking process. They continue to teach sales people traditional methodologies while relying heavily on advertising to create buzz. Mind you, there’s nothing inherently wrong with these strategies. The problem is – big companies don’t effectively add referral marketing into the process.

When it comes to developing social capital and the networking process, small business is king. Big business is slow to move out of the mindset of splashy ad campaigns, big dollars spent on traditional marketing, and the same-old, same-old.

If big corporations ever get it, watch out. But so far, they have been slow to act. Even programs like the USA’s “Do Not Call” registry, have not moved big companies into understanding how to train their people to network effectively… yet.

If big business does ever get it, however, they are likely to run over the little guys. They will learn how to develop social capital and will teach their people how to do true relationship marketing. Most big business is just a notch or two above the universities in the “you can’t tell me anything new” department! For now, there are only a few forward thinking big companies who consistently apply these concepts (and I mean very few). For the rest, it is a trend to watch for in the distant, distant future.

When The World’s Best Known Marketing Secret came out in 1994 it was one of the few books in the bookstores that talked about networking. Now there are dozens if not hundreds. An entire industry has been born over the last decade that is now being codified and refined. Over the next several years, you will see more and more about the importance of networking to build your business. It is developing into a science as well as a way of life.

These trends are not just an American phenomenon but an international one. The introduction of “International Networking Week” (www.InternationalNetworkingWeek.com) is a prime example of how this approach to doing business is growing worldwide.

Small business development through the process of building social capital will continue to grow in the global market we are currently experiencing.  No one has a crystal ball, but based on what I’m seeing and what I’ve seen in the past, I believe these are some of the key things to look for relating to networking and referral marketing over the next few years.

Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chief Visionary Officer of BNI, the world’s largest business networking organization.  His new book, Avoiding the Networking Disconnect can be viewed at Amazon.com.

A member recently asked me if “repeat referrals from one member to another counts as a referral?”  Here’s the answer to the often asked question:

There are several ways one can look at this. Some people feel that repeat “inside referrals” are not legitimate referrals. Others feel that money is money and every referral should count. First, I think you should meet with the chapter’s Membership Committee and discuss it with them. This is a perfect example of helping to “guide” the members in a positive way around an important issue.  On a topic like this, we believe that there should be some local control. The Membership Committee should discuss the pros and cons and make a decision based on their experience. For the record, I have found that most chapters do count these referrals because they are legitimate referrals given for a legitimate reason. The money made from these referrals spends just as well as the money made from any referral. On the other hand – and this is important – sometimes people get ridiculous in giving repeat referrals.

Many years ago, I worked with one chapter that had a member that ordered a ream of copy paper (500 sheets) every week and counted it as a “referral.” The chapter thought this was crazy (and I agreed) so the Membership Committee met and decided that “repeat inside referrals were OK to count as long as they equaled at least $50.” Although this seems a bit arbitrary, it did set a standard that the chapter liked and could live with. It also opened a positive dialog that the members could be involved in to help establish guidelines that fit the nature of their membership.

If your Membership Committee needs guidance on an issue like this, make sure to bring in your local BNI Director to help.

For me, the bottom line is to get the Membership Committee involved and work out something most people like. In my personal opinion I think repeat referrals are valid as long as they are a minimum reasonable amount.  Recognizing members for “continuing” to use each other has a lot of value – as long as it is not abused.

Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chief Visionary Officer of BNI, the world’s largest business networking organization.  His new book, Avoiding the Networking Disconnect can be viewed at Amazon.com

Sometimes I hear people say that BNI has a lot of rules.  We do have rules.  I believe we have the rules we need to run a successful global networking organization.  By the way – ALL the BNI member policies were created and/or approved by our International Board of Advisors made up of BNI members from around the world.  Members created all of our member guidelines and polices.

I can tell you that having hundreds of thousands of entrepreneurs meeting every week all around the world is a little bit like herding cats.  Business people hate rules.  I get that.  But rules serve a purpose.  Hockey without rules would be boxing on ice.  BNI without rules would be a coffee club around tables.  Rules exist to support a process and structure to help the team achieve the results that they are striving for.

If you want to run a successful weekly networking program, there has to be a structured system in place.  In my book, Masters of Success, we interviewed many highly successful people and one of the consistent themes expressed by these individuals, was that successful people put systems in place to help them achieve results.  BNI is a “system” that when done right, yields amazing results.  It does so because of the structure, not in spite of it.

I think the application of the rules is worth further discussion.  I’m a believer in following a system and process (i.e. policies) but we don’t have to apply the policies like Fascists!   Some might think I’m saying that sometimes it’s ok to look the other way, but I’m not. I’m saying that we have to practice “tough love.”

We need to be caring, truly caring, about the way we apply our structure and system.  We need to treat people more like Mandela than Mussolini. Instead of telling a member, “you’re doing something wrong and you’re going to be removed,” I suggest that chapter leadership be clear that a change is necessary. Then ask that member, “how can we help you achieve that goal?” Hold that member accountable in a caring and supportive way.  But accountable nonetheless.

Why accept mediocrity, when excellence is an option? Excellence is an option in BNI.  We can achieve that excellence through tough love in a group.

By the way, if you believe your chapter leadership is too tough or too lenient, volunteer for a spot on the leadership.  Being caring and requiring accountability are skills that take time to master.  Help your chapter leadership be the best they can be by supporting them, doing what needs to be done and/or volunteering to participate at that level.  Criticizing without supporting is destructive.  Supporting without criticizing is constructive.

The consistent application of policy is incredibly important.  Take a moment to watch this very short video about fairness.  It is absolutely hysterical, and right on the mark for the rest of my discussion.

This video is a great example of why policies need to be applied consistently. While people aren’t Capuchin Monkeys, I would argue that people respond to inconsistent rules in the same way – they get mad.  Really mad.

If your group has not been following the program, my advice is to start fresh.  Come clean, tell everyone you recognize that the group hasn’t been following the system and that it might be a reason your group is not achieving the success you’d like. Tell them in order for your group to achieve the success you want to achieve, you’re going to turn the ship and start following the process. Most importantly do so with a supportive attitude.  Be there for those who need and want help. Bring in your Director team to help you make the transition.  Even if you’re in a great group, your BNI Director can help you achieve even greater success.  Above all, consistently hold all your members accountable in a caring way.

Every now and then, I hear some other networking organization say something like, “We are BNI without the rules.”  I LOVE those organizations.  Let the Hockey/Boxing begin!  The rules, when applied with caring and support, are the reason for our success.

Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chief Visionary Officer of BNI, the world’s largest business networking organization.  His new book, Avoiding the Networking Disconnect can be viewed at Amazon.com