Business network yields
tips
Mary Jacobson
(left) shows a sample of her product to Mike Unrein
while Bob Deenin (center) watches the transaction
Thursday during a meeting of LeTip of Salem at the
Creekside Country Club, 6250 Club house Drive SE. LeTip
is a group of professionals who share references and
ideas.
| This group always checks its
references.
SHAWNA ROREM
Statesman Journal
June
16, 2003
For small-business owners,
there’s nothing like having good connections.
Patty Green, whose family owns
Pemberton’s Florist, knows that firsthand.
When the economy soured last year, she
joined LeTip of Salem, a networking group. Within the first
week, she had 25 extra orders straight from the club.
“We never saw a slowdown from the economy,” she
said. “A lot of that is because of LeTip.”
It costs about $800 per year to belong to
the group. For that, she estimates she gets at least $28,000
in sales that she attributes directly to the club.
Networking groups, also known as tip clubs, work
like this: There’s only one person per profession or service
that belongs. For example, only one florist can belong to the
group.
Members refer people to one another. Every time a
business transaction takes place through referrals, it’s
called a “tip.”
The idea is to steer business toward the members
in the group.
In 2001, the club generated about $1.8 million in
tips. The 2002 figures should be closer to $2.4 million, said
Mike Unrein, an accountant who has been in the group for about
seven years.
“I’m a CPA,” he said. “I often have people who
ask me if I know of a good attorney or know of someone who can
refinance my house. When someone asks me for those referrals,
I refer them to someone in the group. I know them, and I know
they will do a good job for my clients and friends.”
It is important that Unrein know the
professionals to whom he’s referring his clients.
“For professionals, referrals are the bread and
butter of our business,” he said. “Your clients that you are
referring tend to be serious clients. They aren’t shopping a
price, they plan on being loyal for quite some time and they
are willing to pay a little more.”
What sets networking groups apart from coffee
klatches are their stringent rules. Some groups penalize
participants who fail to bring in new members or share tips.
Most kick out members who miss regularly scheduled
meetings.
At LeTip of Salem, members can’t miss more than
four meetings per quarter, which works out to attending at
least three times per month. Each member also has to generate
four tips per month either by referrals or by using another
member’s service themselves.
“We want people to attend so we can get to know
them, and they can get to know us,” Unrein said. “If they
don’t know us, they won’t refer business to us, and vice
versa.”
Referrals are the whole point of the group.
Unlike professional service clubs, such as Kiwanis or Rotary,
network clubs are solely designed to generate business
leads.
With only one person per service allowed as a
member, if you have an electrician or a mortgage broker who
never attends, the rest of the members are missing out on that
networking opportunity, Unrein said.
The quantity and quality of business leads
generated is different in each industry.
Papa John’s, for example, sells plenty of
$10 pizzas to LeTip members. A professional moving company, on
the other hand, could go all year without tip, or get two in
one year that totalled $100,000.
“Those industries that rely on personal
relationships take more time to develop, even in these
groups,” Unrein said.
It took Unrein about three years to start see
significant gains from the group. Now, he attributes about
half of his business to the club.
There are about a dozen tip clubs in the Salem
area — a number that has been growing since about
1995.
With 85 members, LeTip of Salem is the second
largest LeTip chapter in the country. The more members, the
more business opportunities that exist.
Although professional groups have existed
for years, the economic downturn appears to have sparked
interest in networking as a relatively low-cost way of
developing business.
“This is the No. 1 way to build your business and
to secure opportunity … particularly in an uncertain economy,”
said Tracy Turner, executive director of The Creative Group, a
staffing company in Menlo Park, Calif.
In a recent survey, The Creative Group found that
48 percent of job seekers and small businesses said that they
were doing more networking than three years ago.
— The Associated Press contributed to this
report.
Shawna Rorem can
be reached at (503) 399-6737.
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Ed Swearinger
(left) chats with Bob Walsh on Thursday at a LeTip of
Salem meeting at the Creekside Country Club.
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Jamie Daly
(left) and Steve Bary compare notes Thursday at a LeTip
of Salem meeting at the Creekside Country Club.
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