{4:12 minutes to read}  The biggest challenge referral groups face is that until the right ingredients have come together to create a dynamic and well-built group, that “referral machine” isn’t quite ready to work at its maximum production level.

Whether a race car or a quality refrigerator, until something is fully and completely built, it can’t be expected to yield the output that it’s designed to produce. A race car can’t be partially slapped together and be expected to win the race. Often, though, this is the thinking when people join referral groups. They start to focus on the output — getting referrals — before the “referral machine” is fully built.

A referral group hits a magical tipping point when it reaches 25-30 members. If it’s a tightly knit collective of synergistic professions (e.g., everyone is in a commercial real estate related business), the number can be as low as 8 to 10 members and still generate a high yield in terms of referrals and favorable introductions. However, most referral and leads groups are a mix of a variety of professions, and in these types of groups, a critical mass occurs when the group nears 30, and the referral “output” takes a quantum leap. 

So what is the focus for a referral group in the low 20s, or even under 20 people? Most members of these groups will prematurely focus on getting referrals. After all, this is a referral group, isn’t it? As a rule of thumb, referrals will triple when a group doubles its membership. So build the machine before expecting the output! Expect referrals to flow only after the “referral machine” (a 30-person team) is completely assembled.

When a group is under 25 members, I coach my clients on the following strategy:

Instead of honing in on bringing referrals for each other as a way to bring value (i.e., make a deposit) to the group, the members need only to shift their focus to inviting visitors in professions not yet represented in the group.

Let’s say there is a Financial Advisor in my referral group of 18 members. I can bring value to her in one of two ways: bring her a referral in the form of a prospective client, or I can bring a visitor (i.e., a referred relationship) in the form of a Trusts and Estate Attorney as a candidate for membership in our group. The former referral is one prospect. The latter is a potential gateway to a stream of prospects.

One way to focus on growing membership is the “onesy-twosy” approach. If the group has 12 members, and there are 2 or 3 guests (aka “member candidates”) in attendance, the energy is kind of “ho hum.” However, if the group picks a special day where everyone brings their VIPs to meet each other, the entire dynamic changes.

If there are 12 members in the group, and each one brings one or two VIPs to that special event, there will be 24 or more people in the room! This creates a buzz that results in a higher percentage of visitors who want to become group members. This means more leverage and potentially more success.

Here’s how I recommend structuring these special VIP days:

By doing this, the group focuses on building a complete and powerful synergistic networking team of 25 to 30 members. At this point, the “referral machine” is fully built, the sweet spot is found, and the energy in the room is electric. This is when attendance increases and referrals become the most natural order of business.