Want more sales? You need to do more prospecting. To some degree, sales is definitely a numbers game: the more prospecting you do, the more people you talk with, and the more sales you’ll likely make. Not all prospecting strategies are equal, however, just as not all prospects are equal. Some are better (much better) than others.
If you’re looking for more sales from your prospecting efforts, referrals are your best focus. 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 adjust your prospecting to get more referrals? A leads group is a very powerful way, although it’s not appropriate for everyone.
Leads Groups Defined
First, a quick explanation in case you’re unfamiliar with these organizations.
Leads groups—also called referral groups, tip clubs or resource groups—exist for the sole purpose of providing referrals to members of the group. In a sense, each person in the group is prospecting for everyone else. Members typically meet weekly or bi-weekly to pass leads to each other.
Meetings typically occur over breakfast or lunch, usually at the same location each time. Most groups meet at a restaurant, but some will meet at a hotel or country club. Still others might meet at a Chamber of Commerce office or community center.
Most people who belong to a leads group are salespeople, although some are professionals—such as attorneys, accountants and chiropractors—and others might be business owners. As a general rule though, everybody is directly involved in the sales process for their company.
During each meeting, members have the opportunity to share with other members details about their business and what kinds of prospects they’re looking for. At some meetings, there may be guest speakers to help members hone their sales skills.
Most leads groups have a fee, although there are some that don’t. The membership fee may be minimal or it may be substantial. Groups can be non-profit or for-profit. Some even raise money for charitable organizations.
The key for all groups, though, is that members are expected to generate leads for other members on a regular basis. Typically, both leads and sales are closely tracked.
Most groups take their mission very seriously and require a real commitment from all members. Groups typically have attendance and/or participation rules. Members can be fined or even expelled for missing too many meetings or not providing enough referrals. These rules exist to insure that all members are contributing to the group as well as benefiting.
Is a Leads Group Right for You?
Maybe. Then again, maybe not. Whether or not a leads group should be a part of your prospecting plan depends on a variety of factors. Consider the following before saying yes or no.
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:
- advertising specialties dealers
- automobile salespeople
- business coaches
- cell phone dealers
- collection agents
- computer consultants
- financial consultants
- gift basket makers
- graphic designers
- hair stylists
- insurance agents
- interior designers and decorators
- mortgage brokers
- real estate agents
- travel agents
- web developers and designers
If what you do doesn’t appear on this list, don’t despair. There are plenty of other types of businesses that can prosper within a leads group. If your business is very specialized, though, or you cater to a niche market, you may want to consider other prospecting avenues.
A leads group is somewhat time-intensive. You have to carve out roughly a two-hour block of time in your schedule each week. Every week. And if you’re like most salespeople or business owners, your weeks are already pretty full. Will you be able to fit the time for the meetings into your weekly calendar without making too big of a sacrifice elsewhere? Or is your time better spent in other places doing other things that will make a bigger impact on your sales?
Can you make a 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 a sales expert who constantly travels around the world conducting seminars and delivering 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?
As in, do you have any? Like most other prospecting tools, leads groups take time to provide results. If you expect to get lots of leads (and lots of sales) right away, you’re in for a disappointment. It takes several weeks for other members to fully understand your business, get a good feel for you and 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.
Making the Most of Your Leads Group
If you’ve decided to add a leads group to your prospecting arsenal, seek one out (ask friends and colleagues or do a quick search on the web) and attend a meeting or two to get acquainted. If you join, remember that—like any other prospecting tool—your results depend on how well you use it. Simply showing up every once in a while isn’t enough. You need to make a real, consistent effort.
Be on time (or better yet, early) and stay late if you can, to maximize your opportunities to get to know people. Specifically thank group members when their leads turn into sales. Recruit members for your group because, as a general rule, bigger groups are better. Volunteer to help with whatever the group needs. And make it a point to spend time each week actively prospecting for others in your group so you can give lots of referrals. The more effort you put into your leads group, the more leads (and more sales) you’ll get out of it.