Is a Leads Group Right for You?If you’re looking for new prospects, referrals are your best source. A person who is referred to you is five times as likely to buy from you as any other type of prospect because they already have some trust in you based on their friend who referred them. So how can you get more referrals? A leads group is one powerful way, although it’s not appropriate for everyone.

First, a quick explanation. Leads groups, which go by various names (referral groups, tip clubs, resource groups), exist for the sole purpose of providing referrals to members of the group. Some have a fee while others don’t. They may be non-profit or for-profit. Members are expected to generate leads for other members on a regular basis. Meetings are typically weekly or bi-weekly over breakfast or lunch. Members have the opportunity to share with other members details about their business and sometimes there may be guest speakers.

So is a leads group right for you? Maybe. Consider the following before saying yes or no:

Your Business
What kind of business are you in? Is it one that has a large potential market or are you highly specialized? The more widely needed your product or service is, the better you will fare in a leads group. People who do particularly well include real estate agents, attorneys, chiropractors, printers, florists, caterers, automobile salespeople, dentists, hair stylists, couriers, computer consultants, accountants, insurance agents, advertising specialties dealers, collection agents, bankers, financial consultants, gift basket makers, graphic designers, web developers, movers, photographers, travel agents, and veterinarians.

Is the group’s meeting time and meeting date (not to mention meeting location) convenient for you? Can you be on time for meetings or will it be just one more hassle in your schedule? Will you be able to fit the time for the meetings into your weekly calendar without making too big of a sacrifice elsewhere?

Can you make the group’s meetings consistently? Most groups are serious and require a real commitment on your part. Members can be expelled for missing too many meetings or not providing enough referrals. As someone who constantly travels around the country delivering seminars and keynote speeches, I can’t belong to a leads group because there is no way I can attend regularly. Will your schedule allow you to make meetings on a regular basis or will it set you up for frustration?

Current Members
Who’s already in the group? If there is someone there who does what you do, you typically will not be allowed to join, since most groups limit membership to one company per industry, e.g. one lawyer, one printer, one florist, one insurance agent, etc. This way, members aren’t forced to choose who to give their leads to. Even if there isn’t someone who does exactly what you do, there may be one or more people who have some crossover. Your ideal group will contain members whose businesses complement yours. For example, if you’re a wedding planner, a group that has a florist and a caterer is a perfect fit for you.

How big is the group? If it’s too small, not enough leads will get passed. If it’s too large, you may feel that you can’t know everyone and they can’t know you very well. Somewhere between 15 and 35 members is where most groups tend to find the most success. Keep in mind that a small group can grow and a large group can experience falloff. Also, with a small group, you can recruit as members people you already know, trust and want to refer.

Every group has its own “house rules” that govern fees, meeting attendance, number of leads that must be contributed, who gets in the spotlight, and many other issues. There’s no right or wrong, and what works for one group may not work for another. The important question is, do you agree with the group’s policies? Since you’ll have to abide by them, it’s important to find a group whose rules you fully support.

As in, do you have any? Like most other sales and marketing tools, leads groups take time to provide results. If you expect to get lots of leads right away, you’re in for a disappointment. It takes several weeks for other members to get a good feel for you and to remember you effectively enough to notice prospective customers for you.

Existing Referral Sources
Do you already get a lot of referrals from friends and clients? If so, then the additional time required for a leads group may not be worth it for you. And if you already have a network of friends that you refer business to, you may not want to join a group because you’ll have to start sending those leads somewhere else. But if the above two items are not the case for you, then a leads group may well be an excellent investment of your time and energy. An investment that can return a steady stream of high-quality prospects for you.