Alf Nucifora
Chairman, Nucifora Consulting GroupThey’re called lead networks. They engage in close contact networking and they’re the hottest thing in town, particularly for small businesses and commission sales reps who survive on leads. Lead network groups are organized gatherings of individuals, normally 10 to 20 to a group, who meeting with the express purpose of passing qualified leads among members of the group. Typically, only one person per profession or business category is allowed in each group, and groups normally meet on weekly basis.
Close contact networking is very effective for companies that operate in a highly competitive environment, such as CPA’s and printers. It is also effective for service organizations, or information-based businesses, such as computer consultants. And it is extremely valuable for new or unusual businesses with which the marketplace is unfamiliar, particularly home-based businesses and those that lack the funds to engage in a serious marketing effort.
Close contact networking is predicated on the belief that there are three primary ways to solicit new business: advertising -- efficient, but expensive; cold calling -- ineffective and expensive; and referrals -- effective and affordable.
Statistics show that 60 percent of leads will close when accompanied by a referral name. That number grows to 90% if a third party actually sets up the appointment. Compare that with cold calling which has a closure rate of approximately one in 100.
Close contact networking began in the early 1970’s, primarily by women as a way to circumvent the good ol’ boys’ network. Today, though, most networks are gender-balanced. There are roughly a half-dozen national networking organizations, including Leads Club, Le Tip, Business Network International and PowerCore. There are about 100 leads groups in Atlanta, and the majority are independently run gatherings. An estimated 1,500 to 2,000 individuals belong to the various Atlanta groups. On a national basis, 50,000 to 60,000 people participate in leads clubs.
PowerCore, one the largest groups in the country, with 100 clubs and about 2,000 members, has 23 groups in Atlanta with a total of 500 members. Groups meet weekly and follow a rigid three-staged protocol:
1. Each person has one minute for a company infomercial, ending in the phrase "a good lead for me is...". The one-minute time limit is good practice for actual sales calling because research shows that the first minute of a sales presentation is often the most important in attracting prospect attention.
2. Two members from each week’s group are given seven minutes each for more lengthy self-presentations.
3. Each member is then given one minute each to provide a referral to the group.
Meetings always start at 7 a.m. and end promptly 90 minutes later.
"Professions and businesses represented cover the gamut from print advertising to auto sales, from business brokers to office equipment, and from payroll services to printing," explained the Atlanta facilitator, Wend Kinney. "The 23 Atlanta groups are organized within context spheres. Members in symbiotic professions are clustered within the same groups."
Close contact networking may well be the right technique at just the right time. It is a return to the proven, yet neglected concept of relationship selling. With the increasing clutter of direct mail and telemarketing as lead generation tools, lead networking may be the answer.
Reprinted with permission of the Atlanta Business Chronicle.
About the author: Alf Nucifora is Chairman of the Nucifora Consulting Group, specializing in strategic planning and marketing services, creator and host of "Power Lunch" (business talk radio, WQXI-AM, Atlanta), marketing columnist in 22 business journals nationwide, Business Reporter, WAGA Channel 5 Eyewitness News, Atlanta, one of Georgia Trend' s 100 Most Influential Georgians, Atlanta's best marketing director for six consecutive years, past President of the American Marketing Association/Atlanta Chapter, past President of the Atlanta Advertising Foundation, former Chairman of the Atlanta Council of the American Association of Advertising Agencies, former Chairman of Earle Palmer Brown and former President and General Manager of Fahlgren & Swink/Atlanta. Please click here to request further information on Mr. Nucifora.
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