Word of mouth referrals begin by having a name that people know and remember. Business networking events encourage the sort of relationship building that leads to successful word of mouth marketing. Although different organizations host different types of networking events, an effective networker is always one who listens well, seeks to help other people, and makes valuable introductions.
There are several general categories of business networking organizations, each with their own advantages.
The small business owner who goes to a business networking event and succeeds only in passing out a number of business cards is not building momentum for word of mouth referrals. People want to help other people who are caring and generous and helpful themselves. The biggest challenge is to actually be all of those things. Communicating it can be done in a number of ways.
The more an entrepreneur is in a position to offer help, the greater the amount of "social equity" he builds up (and how many business cards he hands out). As Bob Burg says in his book Endless Referrals (McGraw Hill 2005), people desire to help those who have helped them. Continual practice of business networking techniques, coupled with an attitude of gratitude, will increase the rewards of business networking quickly.