Tip Club Tips
By D.B. Frandsen
"Any type of networking is beneficial, but the best form of marketing is word of mouth," explains Holly Christensen, owner of Lexington Mortgage in Provo, Utah. Christensen knows, as most small-business owners do, that getting in the door is the first step to being able to show what you know and what you can do. Having referred leads can increase successful appointment rates by up to five times. To help her establish a regular and reliable source of referred leads, Christensen has organized a tip club, through which she gains up to 20 percent of her leads.
A tip club brings together a group of people on a regular basis (usually weekly or semimonthly) whose main interest is in obtaining and giving prospective leads. Members trade information on businesses in the area and recommend new products, ideas and services. But most important, they exchange referred leads with each other. The referrals can be anyone that another member of the group might be able to help.
There are several ways to locate tip clubs. Chamber of commerce offices may keep lists of them. You can also check with local associations, or just ask around. Anyone who needs referrals on a consistent basis is likely to be a tip-club member.
After you've found a club, evaluate it in terms of how well it will fill your needs.
- Are there other businesses related to yours? Other members should benefit from your referrals as well as you from theirs.
- How many referrals must each member give at the meeting? Many clubs require that each member give at least three leads per meeting. The three leads you provide could be for the same person or for three separate individuals.
- When and where do they meet? Most tip clubs meet for lunch or breakfast. Meals are generally purchased on an individual basis by each member.
- Does the club charge dues? If so, what do they cover?
Once you join a tip club, be a good member. Say "thank you" for the leads you're given, especially if a sale follows. Buy breakfast or some other gift or token of your appreciation for whoever gave you the lead. Always have relevant leads to give, and be loyal to other members of the club.