BNI & The Power of One: Episode 831 – "Is it a New Referral?"

Release Date: June 30, 2025
Host: Tim Roberts

Introduction

In Episode 831 of the BNI podcast series titled "BNI & The Power of One," host Tim Roberts delves into a pertinent question submitted by Matt from Australia. The episode focuses on navigating the complexities of referral submissions, especially concerning ongoing client relationships and trail commissions in the mortgage brokerage sector.

Matt’s Inquiry: Understanding Referrals and Trail Commissions

Matt, a mortgage broker based in Australia, is part of an exclusively online BNI chapter. His revenue primarily stems from upfront commissions, supplemented by trail commissions paid monthly by lenders. These trail commissions are a result of Matt maintaining client relationships through services like rate reviews and loan top-ups. Notably, these commissions are handled directly by the lenders and are not billed to clients.

Matt's primary concern revolves around the appropriate handling of referrals in his unique business model. Specifically, he inquires whether he should submit a new referral each month for clients who continue to generate trail commissions or only when significant events, such as refinancing or securing a new home loan, occur.

Tim’s Insight: Clarifying Referral Practices

Tim addresses Matt’s question by emphasizing the importance of understanding what constitutes a "new referral." He underscores that a referral should represent a new potential client rather than an ongoing business relationship. Here are the key points Tim discusses:

• Defining a New Referral: Tim clarifies that only new clients should be submitted as referrals. Ongoing clients, irrespective of trail commissions or repeated business, should not be considered new referrals. As he states, “[...] definitely not on the trail commission. Absolutely not” ([00:39]).

• Avoiding Referral Inflation: Tim warns against the temptation to submit multiple referrals for the same client based on ongoing commissions or future business prospects. He likens this to “padding one stat versus another stat,” highlighting the integrity issues it can cause within referral reporting systems ([04:10]).

• Thank You for Closed Business: Instead of submitting new referrals for ongoing clients, Tim recommends using the "Thank You for Closed Business" metric to acknowledge the continued value and loyalty of existing clients. This approach accurately reflects the sustained relationship without misrepresenting referral metrics ([05:30]).

• Lifetime Value Over Multiple Referrals: Tim advocates for tracking the total lifetime value of a referral rather than counting multiple referrals from the same client over time. He explains, “[...] over the lifetime of working with that client, they did a million dollars with me. That's a million dollar referral” ([06:45]).

• Analogies to Illustrate Points: To further clarify, Tim uses relatable examples, such as a barber-client relationship, where regular services do not equate to new referrals ([03:15]). He also references his experience in the insurance sector to reinforce the concept that additional services to the same client do not merit new referrals ([06:00]).

Tim’s Recommendations for BNI Members

Based on Matt's scenario, Tim provides actionable advice for BNI members facing similar dilemmas:

1. Do Not Submit New Referrals for Ongoing Clients: Reiterate that trail commissions or recurring business do not warrant new referrals. Maintain referrals strictly for genuinely new clients.

2. Consistent Tracking of Closed Business: Utilize the "Thank You for Closed Business" feature to recognize and document ongoing client relationships and their contributions to your business.

3. Focus on Referral Quality Over Quantity: Emphasize the importance of the quality and lifetime value of each referral rather than attempting to increase referral counts through multiple submissions for the same client.

4. Maintain Integrity in Referral Reporting: Uphold honest and accurate reporting practices to ensure the credibility of BNI’s referral system and the trust within the network.

As Tim aptly puts it, “[...] you don’t refer me to this client and they, they used me 10 times. So there’s 10 different referrals gave me. No, it’s you referred me to this client and over the lifetime of working with that client, they did a million dollars with me” ([06:45]).

Conclusion

Tim concludes the episode by reiterating the significance of maintaining ethical referral practices within BNI. He encourages members to focus on building long-term client relationships and accurately reflecting their business interactions within the referral system. Moreover, Tim extends his gratitude to Matt for his insightful question and highlights the global reach of BNI by mentioning the upcoming international conference in Australia.

Notable Quotes

• Tim Roberts on Trail Commissions: “Definitely not on the trail commission. Absolutely not.” ([00:39])

• Tim Roberts on Referral Integrity: “[...] you’re only giving people credit because they want to credit on a Palms report or power of one report... it’s just not accurate.” ([04:10])

• Tim Roberts on Lifetime Value: “You referred me to this client and over the lifetime of working with that client, they did a million dollars with me. That's a million dollar referral.” ([06:45])

• Tim Roberts on Ethical Practices: “I would not want to be padding the referral stats. I would want to know what’s the actual value of that client to me over the lifetime.” ([06:10])

Final Thoughts

Episode 831 serves as a valuable resource for BNI members navigating the nuances of referral submissions, especially in industries where ongoing commissions are prevalent. Tim Roberts provides clear guidelines and emphasizes the importance of maintaining honesty and integrity within the referral process, ultimately fostering a more trustworthy and effective networking environment.

Thank you for tuning into this episode of BNI & The Power of One. For more insights and to submit your questions, visit bnipower1.com.