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What is a Referral Group?

Written by BRBN

Ever wondered what exactly is a Business Referral Group, and if joining one would benefit your business?

Networking is a great way to connect with local business, but to really form strong business relationships a more structured form of networking is required. This is where a Business Referral Group has it's place in the mix.

What is a Referral Group?

A business referral group is a group of business owners who meet on a regular basis (usually weekly) to refer business between each other. The group offers small business owners an opportunity to establish mutually benificla business relationships.

What type of business gets the most out of a referral group?

Small businesses where the owner of the business can join the group and be an active member often get the most out of a referral group. The main benefit of the group is the ability to create mutually beneficial business relationships. This works best when the business owner is directly involved in the group as a member. 

How long until I start to get referrals?

This really depends on the type of business that you have. A service based business with a low price point should start to see a return fairly quickly. For example, businesses such as hairdressers, massage therapists and beauticians should see receive internal referrals fairly quickly. Other business that have a much higher price point and commitment can take a longer to show return on investment.

To speed up the process, you need to be proactive in the group.

  • be present at each meeting
  • send a substitute if you can't make it
  • do one-on-ones with all the other members to be sure that you fully understand their business
  • give referrals and testimonials to other members of the group

Can other people in my industry join?

There is usually only one person from each category allowed in a referral group, ensuring that the member is not competing with other members. When a member leaves the group, the category is deemed to be open and local businesses are invited to join to fill the category. It is important that when a business joins the group, the category they take up is their main business catagory.

DO I need to come each week?

Yes, you really need to be present and active at the meetings each week. The success of a business referral group is based on mutual trust and respect of the members. Coming to the meetings each week shows that you are reliable and dependable and increases the trust factor required for members to refer to you. Remember, when someone recommends you, they are putting their reputation on the line and trusting that you will not let them down.

If you can't come to a meeting, then send a substitute to stand in for you. This shows that you have respect for the other members of the group.

What do I need to do to make my membership profitable?

To be successful in a referral group, a member must think “What can I do for the group?” rather than “What can the group do for me?” and generally the by-product of this attitude is in increased business through referrals.

Is there a membership fee?

Most referral groups have a membership fee, along with a once off joining fee. Referral groups have become a big business with many privately owned groups and franchisees running referral groups.

What makes Bayside Redland Business Network different?

BRBN is run as a not for profit where any additional money raised outside of the general running of the meeting is given back to the community. This means the focus of the group is switched from a money making operation to a community based business support group.