Why Your Networking Group Doesn’t Work

Why Your Networking Group Doesn’t Work

Have You Had This Experience with Networking Groups?

Do you belong to a business networking group? If so, you most likely have had to wait 6 – 12 months to get a quality referral. Then finally, you were referred because something you said triggered an obvious connection the person referring you had to someone they knew. You diligently follow up on the introduction and to your delight the person may actually need your product or service. Yipee!

But Do The Math

I’ve had this experience, and my initial reaction is happiness, then a little confusion. I think to myself, why didn’t this person introduce me to that person 12 months ago? Did they not trust me at that time? Did they think I might be an axe murderer? Did it just not occur to them? I then do the math.

The Traditional Networking Model

OK, I’ve paid $1000 in membership fees (which includes breakfast at the diner) and I’ve spent about 4 hours a week on 7 am group meetings, one-on-ones, lunches, coffees, emails to “work the group” and to try to establish “long term relationships of trust.” At about 200 hours per year at an estimate of how I value my time at $100 / hour, that means I spent $21,000 in time, energy and money in the last 12 months. But the good news is, at least I got that one referral and it turned into $20,000 of revenue for my business.

$20,000 / (($1000 + (200 hrs x $100)) = 0.95 Return on Investment

The bad news is I didn’t even break even…. so forget about the good news.

There Must Be a Better Way

This isn’t working. It’s too inefficient and a negative return on investment ! And it doesn’t have to be this way. What if I just asked the right people with the right connections (probably only about 10% of the people in my current group) to introduce me to my specific target customers that they may know? Will they introduce me? Will those introductions turn into business?

This Is How I Think It Will Play Out

If I get together a group of people with a large measurable group of local contacts and I ask the group as a whole to introduce me to one of my target customers, if someone at the table knows that person, I think they will make that introduction if several factors are satisfied: (1) They don’t think by making the referral it will damage their relationship with the person they are introducing to me (i.e., they think I’m probably not an axe murderer), (2) They do think by making the introduction they will obtain a benefit, such as:

  • May get a reciprocal referral from me.
  • May obtain business from me.
  • May help cultivate their relationship with the referrer’s contacts which may result in increased business for themselves.

OK, I Got The Introduction, Now What?

So let’s assume I got the introduction because I seem like a nice, competent person (they didn’t think there was a risk in introducing me) and I promised to introduce them to people I know in return. The big question is, “Will this introduction turn into business for me?” Well it now only depends on three things and three things only.

  • Do they have a need for my product or service?
  • Can they pay for it?
  • Do they want to do business with me? Did we hit it off?

Without those three things, it was a nice introduction that went nowhere. But… (there is always a but) if I get introduced to 10 of these people, based on my experience, I know I’ll close at least 1 sale. I also know that sale is still worth $20,000 to me and if could get those introductions in 1 month (by asking the right people) vs. 1 year, my cost in time and money would be closer to $1000 giving me a 20:1 ROI. Much better !


It does not matter how long the referrer (giver) has known the person asking for introductions. You don’t need that “long term relationship of trust” (even though it sounds so nice – like a big hug) to get that introduction, as long as the referrer does not distrust the person asking for the introduction and the referrer perceives they will receive some value from making the introduction. My father always told me “it doesn’t hurt to ask.” He was right, and if you ask the right people, you are likely to end up with much better results.

Jonathan Rosen is the Founder of Collaberex, a B2B Lead Generation / Business Development company https://collaberex.com/team/jonathan-rosen/

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