Group therapy

Can leads groups pump up your business?

by Doug McPherson   Wouldn’t it be great to saunter over to the leads store, stroll down the aisle, and pluck the juiciest, freshest one off the shelf? If only it were
that easy.

There aren’t any leads stores, but you may have heard of leads groups. These organizations act as a way for business people to meet and exchange leads, often during breakfast or lunch meetings.

A group usually contains professionals from several industries–an insurance salesman, attorney, printer, real estate agent–and can have from 10 to 100 members. Each member pays an annual fee to be in the group, and these fees can range from well under $100 to several hundred dollars. Most leads groups meet weekly, and each member in attendance advertises his business to other members to educate them about his services so that leads can be shared.

Leads groups generate only business opportunities. If a lead from a group member turns into a sale or listing, remember that only licensed real estate professionals can be compensated for a referral.

But do these leads groups really work? And are they good for REALTORS®?

You get back what you put in

Shelli Howlett, executive director of Business Network International (BNI) for Dallas-Fort Worth, Austin, and San Antonio, says leads groups can substantially increase your income, but only if you invest the time and effort to develop referrals from them. The most important part of finding a group to join is to learn the quality of the business professionals in that group.

"They have to be serious about growing their business," Howlett says. "The size of the group is not always the most important factor. Find out who the members are, and if the group appears to be focused on its objectives."

Before you commit your time and money, Howlett suggests asking the group’s director these questions:

• How long has the group existed? 
• Is the group affiliated with a national or international organization? If so, how long has that organization been around?
• What are the director’s qualifications for leading the group?
• How many members does the group have? 
• What are the membership fees and are they refundable if you quit?
• How often are the meetings?
• What are the rules? (Some groups will kick you out if you miss a certain number of meetings; others require you to provide a minimum number of leads to members.)

If a leads group looks promising, ask to try it out; many groups allow a free visit. Then take your time to assess your impressions to see if you and the members can help each other.

But be careful what you wish for. Sometimes leads groups can be too effective. "It’s not an easy task to keep up with over 20 people who are out promoting your business," warns Howlett. 

Twenty extra people promoting you and your services sounds good, but annual BNI dues are $315, and results take time. Nevertheless, Susan Petty, an agent with Coldwell Banker Real Estate in Dallas, is sold.

Her leads group meets weekly from 11:45 a.m. to
1:30 p.m., and she can miss only three meetings during a six-month period. Petty says her results justify such a commitment.

"I highly recommend it," says Petty. "One year I figured that about 20% of my business came from the group."

Leverage what you already have

But not everyone is impressed with leads groups. Jim Schneider, CEO of Schneider Sales Management Inc., a sales consulting company in Englewood, Colorado, believes leads groups don’t work that well. Schneider has helped real estate professionals refine their sales and marketing techniques for more than 25 years.

"I don’t see them getting a lot of business," Schneider says. "It’s kind of like they say in advertising, you don’t really know which half is working and which half isn’t."

Schneider thinks people would be better off leveraging third-party endorsements they get from former clients. "If you get an article in the paper or speak to groups who then send letters praising the speech, you should use those to generate more business," he says.

Even Howlett acknowledges residential real estate is a good occupation for developing your own referral system. "REALTORS® know all kinds of people–mortgage brokers, homeowners-insurance agents, inspectors, handymen, remodelers–they can refer business easily," says Howlett. 

But these groups can augment your own referrals, if you shop around for the right one. Invest the effort to find a group whose members match your needs and decide for yourself if leads groups are worth your time.

Happy shopping!

Photo © Stockbyte.

home   current issue    top 10    resources 

discussions   contact us   search

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.