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Firstly let me say that I’m a fan of networking groups. They’re a great place to meet (local) businesses. They’re brilliant for making friends (in a business context) and getting that moral support, because running a business can be a very lonely affair. And, if the group is a good one you can learn loads from the industry specialists within the group.

But are they a good tool for winning business…I would say not. And here’s why.

Firstly, most networking groups are a business. The person running the group will be earning money for organising the group. Usually this takes the form of a percentage of the weekly/monthly fees that the members pay. This means that there’s an incentive for the group to be big rather than good. Double the membership and you double the organiser’s salary.

Secondly, many of the businesses within the group are micro businesses. Often their biggest concern is selling their own services rather than selling those of the other members and often they are not the ‘lead advisor’ to the client so the chances of them being able to refer-in an accountant or solicitor are almost nil.

Thirdly (or perhaps firstly) you are often obligated to give a referral every week…this inevitably means that the guy in the group supplying stationery or car valeting gets loads of little referrals (business) based on the fact that members are forced to give something every week. I for one don’t want 5 pieces of £100 business every week from a networking group. I want one piece of £50k business every year from the group. But this means that I need to surround myself with high powered people who are both expert and lead advisor to their clients.

Fourthly (or perhaps firstly again) just because I have breakfast with you every week, it doesn’t mean that I like or respect you. I know lots of accountants, lawyers, insurance brokers and for each category there’s one that I think is the best. And it’s he/she that gets all of my referrals, because I work really hard to win clients and if I’m going to refer them to someone you can bet I want it to be the best person that I know.

So, if your networking group forces referrals every week, if it fills seats based on vacancies rather than quality and if the person running the group gets paid for it…ask yourself if the groups can ever really deliver your dream clients to you.