My networking company BNI has nearly 6,500 locations in more than 50 countries around the world, but it wasn't always like that.
When I started that first group, I wasn't even thinking of BNI as a business. I already had my own company. I just needed a way to round up more business for it. At the time I owned a management-consulting business that focused on human-resources issues. Business was good enough to let me invest in a house, but no sooner had I move in than I learned I was losing my biggest client whose business, unbeknownst to me, was in serious financial trouble. Banks are funny about home-mortgage loans. Mine felt I should pay every month. I had to bring in more business, and do it fast! What was the best way to do that?
I looked at my options. Advertising? It's a necessity for many businesses, especially retail, and it can be very effective -- but my market was very limited and hard to target with advertising.
I tried direct mail. The experts say a 2% response is considered good in a direct mail effort. As a business consultant, I got zero.
I could put together a massive public-relations program, but as a small business, my costs and limitations were a lot like those of the advertising scenario.
I could lock myself in my office with caffeinated drinks and a telephone and start cold-calling people to ask for their business. I know how to cold-call. I had trained whole marketing departments on how to do it. What's more, I worked with them so long that I knew I never wanted to do another cold call, ever again. There had to be a better way to generate more sales.
The answer ended up being fairly obvious to me. I realized I was already getting most of my new business from referrals and speaking engagements. I knew that my highest-quality, longest-lasting, best-paying clients were those who had been referred to me by other clients. So I began contacting my remaining clients to get referrals.
Then I started really thinking. Of all the kinds of business that came to me, the best business came in by referral -- and yet I had no reliable way of increasing the number of referrals I received outside my existing clients. Like most business people, I got referrals through an informal network of business acquaintances, but mostly as an afterthought. If the opportunity arose, and if the thought occurred, one satisfied business client might say to something to his own client or an acquaintance. Then she might or might not call me. And I may or may not know that he had sent that person to see me.
What I needed was a networking system designed from the ground up to help entrepreneurs generate referrals through a structured program, something not taught in colleges and universities anywhere in the world. Through a lot trial and error I developed a formal system of referral development in a structured environment. We tested every new idea and concept in those first groups, keeping what worked and eliminating those things that did not. Within a year, we had 20 groups established in Southern California. It was at that point that I realized that I had struck a chord throughout the business community. Apparently, I wasn't the only one who wanted and needed referrals for their business.
But it wasn't all smooth sailing. One of my first lessons is what I call the "leaky bucket syndrome" of learning. When you train someone how to do something, a little information leaks out. When they train someone else, more information leaks out. By the time you get to the third or fourth generation of trainees, you've lost half the information. When someone gets only half the information there's a sense that something's missing. What do they do? They start putting their own content in. The problem is that it might not be good content. We learned early on to write everything down and to develop "train the trainer" material so there was consistency in the system and so that the program could be scalable. This became even more important as we spread across the country and eventually the world.
Another important lesson related to creating a uniform vision for my members and directors to rally behind. Something simple, yet memorable, that also fit our mission to generate referrals for one another. We needed something that was compatible with the systematic training.
I understood that the way to build a business through referrals was by helping other people build their business. I knew that instilling a healthy, positive vision throughout our organization would have immeasurable benefits. I kept looking for a vivid, succinct way to express this vision. Finally, I found it: Givers Gain®. This simple, two-word condensation of the Golden Rule resonated with me and our members. From that day forward Givers Gain has been our universally understood, easily remembered corporate philosophy for getting and giving referrals. It has been inculcated throughout the organization in every country we have BNI chapters.
BNI began as a classic example of necessity being the mother of invention. But it grew and prospered because of scalable systems within the framework of a clear philosophy. These are important lessons for entrepreneurs today.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.