1st vs. 2nd Generation Referrals: What's the Difference?

In a referral networking group, a 1st generation referral is when you become the customer yourself: you hire a fellow member or buy from them. A 2nd generation referral is when someone you know becomes the customer: you introduce a friend, a client or a neighbor to a member.

Both are real business for the member who receives them. They tell a chapter different things, which is why many groups record them separately.

1st generation: you are the customer

• You hire the chapter's accountant to do your business taxes.
• You book your family's vacation through the travel member.
• Your office signs up with the chapter's IT provider.

No introduction is needed, because the trust is already there. These are often the first referrals a new member gives and receives. They are also the best way to learn how to refer someone: once you have been a member's customer, you can describe their work from experience.

2nd generation: someone you know is the customer

• Your neighbor has a leak over the kitchen. You tell them about the chapter's roofer and, with their OK, pass the roofer their number.
• A client mentions she is selling her mother's house. You introduce the chapter's realtor.
• Your brother-in-law is starting a company and needs insurance. You connect him with the insurance member.

This is the referral that grows a chapter. A member's reach is no longer the fifteen or twenty people in the room. It is everyone those people know.

Why groups track them separately

1. 1st generation runs out. Each member needs only so many accountants, realtors and roofers. A chapter that lives on members buying from each other tends to see its numbers flatten once everyone has hired everyone.
2. 2nd generation shows the room knows your business. To send a friend to a member, you have to be able to explain what that member does and trust how they treat people. That is know, like and trust at work.
3. The mix is a health check. A chapter passing mostly 1st generation referrals usually needs more 1-to-1s and clearer weekly introductions. A chapter with a steady flow of 2nd generation referrals is reaching new customers every week.

Cross-chapter referrals

Groups with more than one chapter often have a third type: a referral to a member of another chapter. It is useful when your own chapter has nobody in the category, or when the contact lives closer to another chapter's member.

Both still have to be qualified

Whichever type it is, a referral counts when there is a real need and the contact expects the member's call. A name without permission is not a referral of any generation. See what is a qualified referral.

How to give more 2nd generation referrals

• Be a customer first where it makes sense. It is the fastest way to learn what a member does well.
• Book 1-to-1s and ask one question: "What does someone say right before they need you?"
• Listen for those phrases in your own work. A new house, a new hire, a retirement and a renovation each point to three or four members.
• Ask permission, then pass it the same day. A referral loses value every day it waits.

Check your own group's definitions

Networking organizations don't all use these terms the same way, and how each type counts toward points or awards is up to your group. The definitions in this guide are the ones used in Ecoferral's referral form, where a member chooses 1st generation, 2nd generation or another chapter each time they give a referral. See how to track referrals in a networking group.