The Benefits of Referral Marketing Groups

Referral marketing groups can be found in almost any city in the United States.  Whether you look to your local chamber of commerce, church, social club or professional networking group, people are four times more likely to buy a product or service when referred by a friend.

Whether you know it or not, you’ve probably referred a restaurant or service at least a couple of times in your lifetime.  According to the Boston Consulting Group, consumers rely on word-of-mouth 2x to 10x more than paid media.  What does this mean for professionals and business owners?  It means that referrals are a key component that aids in the amount of success their business enjoys.

What is Referral Marketing?

Referral marketing is a type of marketing strategy that uses word of mouth and personal recommendations to grow a business’s customer base.  Referral marketing can happen organically, but many companies execute referral marketing programs or join a referral marketing group or networking group in order to bolster sales.  One of the cool things about referral marketing is that it is one of the least expensive marketing strategies a business can implement.

What is a Referral Marketing Group?

Often called business referral networks, business networking or leads clubs, a referral marketing group is a networking group that comes together for the sole purpose of passing referrals. 

Depending on the professional referral marketing group you join, there may be rules in place to help you become more successful within the group.  Commitment is typically one such rule.  The law of propinquity helps foster a good culture within the network and staying in front of your ideal referral partners can help you receive more referrals.

Another typical rule is exclusivity.  While not all networking groups require exclusivity, many do.  They will allow you to join their group on the agreement that you are not to join any other referral networking group (chambers of commerce not included).

Some groups require that you bring visitors or potential members to the group every month, and some are invite-only groups.  Still, others are more result oriented.  This means they follow a highly structured agenda and require that you pass a minimum number of referrals each month.

The Benefits of Referral Marketing Groups

While the rules may sound daunting, there is a reason for their existence.  Often referral marketing groups that aren’t as structured or don’t have automated KPIs in place end up breading a culture of excuses, dependency, and lack of growth.  It can turn into more of a social club than anything else – and while there is nothing wrong with social clubs, what’s the point of joining a networking group if you aren’t making any money?

There are several benefits to joining a structured business networking group.  They are as follows:

1. It can be used to measure customer satisfaction.

If someone learns about you through one of your pre-existing clients, and they purchase from you that is a high compliment!  It means your client was satisfied with your work and wants others to enjoy your products and services too!

• Referral marketing groups often boast a higher conversion than other marketing techniques.

As potential customers are referred to you, they are more likely to purchase your product or service.  Again, according to the Boston Consulting Group, consumers rely on word-of-mouth 2x to 10x more than paid media.

• Oftentimes there is increased customer engagement.

Depending on your industry and your audience, the average person needs a few touchpoints before making certain purchase decisions.  Coupling a referral marketing group with your email campaigns, social media, and digital marketing strategy can help provide those touchpoints further helping the customer make a better buying decision.

• Referral marketing groups can help you expand your market reach.

Whether it’s a customer or one of the other members within your networking group, you can reach customers and clients you may never have gotten in front of!

For example, I had a client years ago who was talking with a colleague who needed my specific services. Her colleague happened to live in Vietnam (a place I wasn’t living at the time).  She mentioned my name, passed her colleague my email, and within a week I had gained a new customer.  I worked with that client for over a year who ended up referring me to other colleagues and friends of hers.  Before I knew it, I had clients in 9 different countries, and it all came about as a referral!

• Referral marketing groups help you improve your customer retention rate.

Aside from building and nurturing long-term professional relationships, customers may be more likely to give you insights into their expectations and motivations.  This can help you gain clarity on how to provide better products and services to all of your clients presently and in the future!

In summary, joining a referral marketing group can be incredibly beneficial for your career and business.  However, buyer beware!  There are many downsides to joining the wrong networking group!  Some of them may end up being a waste of your time and money!  Be sure to explore the best networking group suited for you, your business, and your needs as well as one where you can add value to the other group members!

Personally, we prefer referral marketing groups that are a little more structured but don’t become a time-suck or a part-time job with administrative duties!

About We&Co and The We&Co Huddles

We&Co is a professional co-oping & professional networking business that was founded in Springfield, Missouri in July, 2020.  While there are many professional networking groups in and around the United States, We&Co focuses on creating small industry-specific groups with five to ten professionals who all have the same target audience but offer different products and services.

In essence, professionals come to us when they want to save time while making more money.  These industry-specific groups are pods of professionals who are dedicated to growing their own and their respective members’ books of business.  If we’re completely honest, we aren’t for everyone.  We were created for those professionals who, in the words of Patrick Lencioni, are humble, hungry, and smart.

These small groups of referral partners (called “Huddles) meet up twice a month for an hour and talk strategy on how to become that one-stop-shop for their clients.  If you are a professional who is interested in joining or launching your own We&Co co-op (or “Huddle” as we like to call them), feel free to shoot us an email at info@weandco.org or by joining our 14-day free trial (no credit card required). and a representative will get back to you shortly! It’s fun to be a part of one of the best Membership Organizations in Springfield.

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