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International company franchises networking groups
By Lindsay Danzell
Contributing Writer
Networking groups, by a general definition, are local and nonprofit. That’s just business as usual. So what happens when a for-profit, internationally franchised business capitalizes on the networking game?
Business Networking International, a for-profit networking organization, says it can enhance business for its members.
BNI has approximately 85,000 members and has grossed more than 4.9 million referrals, resulting in almost $2 billion in sales, since it was founded in 1985, according to company literature.
BNI of the Lowcountry’s 10 chapters see between 10 and 30 referrals per week, said Gail Smith, assistant director of BNI of the Lowcountry.
Members pay $295 annually to cash in on referrals and educational sessions on networking. Local chapters claim in excess of a 20%, and some even claim a 100%, increase in sales based on referrals by joining the organization.
At BNI events, food and alcohol are almost nonexistent. Although chapter meetings have some food, BNI leaders try to keep food out of the focus.
“It’s not about net-sitting. It’s not about net-eating. It’s about networking,” said Kim Hellman, BNI’s Charleston area event planner.
BNI focuses on three points for successful referrals: visibility, credibility and profitability. Professionals cannot give good referrals if they are unaware of a product or service, and they will not give good referrals if credibility and trust have not been established. After visibility and credibility have been obtained, profitability emerges from successful referrals.
“Networking is a contact sport,” said Ivan Misner, founder of California-based BNI. “You’ve got to get belly-to-belly with someone.”
On Feb. 5, BNI initiated a first-of-its-kind weeklong International Networking Week, designed to increase chapter memberships. BNI of the Lowcountry hosted a mixer in Mount Pleasant, drawing a crowd that overflowed into the parking lot.
BNI of the Lowcountry consists of 150 members in 10 chapters. Each chapter limits membership to one person or business from each profession, essentially keeping any referrals within the confines of the chapter.
Since BNI chapters retain only one member per profession, they are “virtual Main Streets,” Misner said.
The optimum number of members in a chapter is roughly 30, which results in one to two referrals a week, Hellman said. Each chapter in the Lowcountry carries fewer than 30 members; the Riverview chapter carries only nine members.
The networking business
BNI is a privately held company. The company has 4,600 chartered chapters and regional or local franchises can operate up to 30 chapters. The Charleston chapters are operated by Bob and Becky Travis in Columbia, who run three franchises covering most of South Carolina and some of Georgia.
Franchises are purchased based on either population numbers or counties. The Travises purchased their franchises based on population on 1 to 1.5 million, Becky Travis said.
The structure of a chapter consists of members and a leadership team of three people. Leadership team members are compensated for their time through waived dues during the time they serve the charter.
About 80% to 95% of membership fees fund the operating costs of the regional franchises, Misner said. Dues are used to pay employees, organize events and provide educational materials for members, Misner said.
Competing with local nonprofits
Mount Pleasant Business and Professional Association is one of the many local nonprofits offering networking opportunities to professionals. Membership dues are $150, and 100% of dues are donated to a scholarship fund and charities, said Chuck Diggle, vice president of MPBPA. The organization is nonprofit and none of the officers are paid. The cost of luncheons and events fund the activities, and professionals aren’t required to become
members.
Although the two networking organizations are different in distribution of dues, MPBPA nips at the heels of BNI’s local membership, with almost 100 professionals paying dues.
An international business that creates referrals locally is as “grassroots as it gets,” said Misner. BNI is the epitome of acting globally and thinking locally, and BNI remains different from local organizations because of focus and opportunities, he added.
Structured meetings and educational opportunities set BNI apart from other, more local organizations, Smith said.
Around the world, BNI meetings open with a few minutes of relaxed networking followed by tightly regimented introductions of all members and guests, a networking education presentation, a spotlighted business and referral announcements.
“(Members) are more upfront about (business) because the primary purpose is referrals,” Misner said.
Diggle agreed his organization is more casual and less focused on referrals. MPBPA and other nonprofits offer an alternative to business professionals who don’t require such a structured environment.
Misner described local nonprofit network groups as less focused on referrals and area chambers of commerce as more political and informational than BNI.
“It’s very easy for networking groups to become a coffee klatch,” Misner said. “We view chambers as compatible organizations, not competitive.”
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