Have you ever been invited to a business network breakfast where they have one person from different businesses, for example one insurance agent, one accountant, one lawyer, one dentist etc. This is one of many types of businesses. There are many of these different type of networking groups so I am guessing that they do work. I think they may work for some businesses but not for others.
If you are selling a service, referrals definitely bring a greater chance of succeeding in getting the client compared to a cold call to an unknown business. They work for some people but not all even if they are in the same business. For example if the referrals are from people who live pay cheque to pay cheque and you are an investment advisor specializing in high net worth individuals, then the referrals are not the type that you are looking for. A banker looking to get a new client even investing $500 in GICs, this referral may work for them.
It takes time to build your referral network. Many people go about things the wrong way. Investment advisors call accountants and lawyers all the time and many say send me your clients. If the accountant or lawyer has a network and gets referrals from some brokers, why would they send business to a new person instead of giving it to a person who gives him business? Referrals are a two way street. If you give a referral you expect to get one back. It may not be tomorrow, next week or even for a few months but when the opportunity arises, you hope that you will get referrals back. Someone has to start to give the first referral to break the stalemate.
Remember business referrals tend to stay as clients longer than someone shopping just for price.