Referrals: What is the best type of Lead?
If you are a new Entrepreneur and selling professional services, you are probably asking yourself: “How do I win new business outside of my local area” and “What is the difference between a lead and a referral?”
Leads can come from social media posts, advertising, public relations or from people within your network that are your contacts. Examples include ads on Google Ads, Facebook, or LinkedIn or an article you get published in your local newspapers through a public relations campaign. Leads can also come from speaking at events or numerous other sources. In general terms, a Lead is something to follow up on if you want to win new business.
Referrals are really a type of lead. Referrals are when someone you know, suggests you speak with another person or business. When we talk about leads you will often hear people talk about cold leads or warm leads. Cold leads are when you call someone without any introduction. Warm Leads are when someone warms the path for you. That is they create an introduction. They create warm calls because the potential client is expecting it. Referrals break down that untrustworthy barrier that is the organic response to a cold call.
Why is a warm lead better than a cold lead? If someone calls you on your phone, let’s call him Joe. You don’t know Joe and it's out of the blue, your trust is likely very low. Likely everything Joe says you will doubt. Now compare that to your best friend Melissa, tells you, she has had a great experience with Joe and asks if it's Ok if Joe calls you to tell you about his amazing services. Now when Joe call’s you are all ears. You want to hear everything they say and you likely have a high degree of trust because your best friend Melissa who you trust, referred him.
In the first scenario, Joe may have purchased a telephone list. The telephone list is his lead source. Maybe Joe paid $100 for 5,000 names and phone numbers. He is going to have to make a lot of calls to find someone to trust him enough to buy. At the end of the conversation, closing is just that much harder making you convert fewer sales. Joe may walk away from more and more sales meetings saying, “Why did I just waste my time buying the list and making the call?”
In the second case may be, Joe invested time in getting to know Melissa and then she purchased from him. Because Joe is smart and knew he had a happy customer he asked Melissa to provide the lead. Both Scenario 1 and 2 are leads. But in Scenario 2 it’s both a warm lead and what is known as a referral.
The referral opens the door for you. What else could you ask for? At the heart of these connections in your network. Building a network is hugely important when attempting to be more effective with your referral sales approach. You must have character, integrity, and a great reputation. Without these, you will have a hard time building a trusted network and ultimately valuable leads.
At Entrepreneur’s Network, we help individuals build a global trusted referral network through our community resources and product/service videos. My division, LeadConnect is a platform for individuals like yourself to flush out your trusted referral network and build community. This approach has helped many make multiples on their initial investment.
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