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Posted on 2019 October 12th
The business world would usually interchange the words Lead and Referral but do we truly know the difference between the two? Let's check out their difference in this article.
Image 1.0 - The Lead to Sales Process
The Lead
The Lead
The Lead to Sales Process as illustrated by Image 1.0 shows all the standard steps to close a deal or make sales. In the illustration, there are 5 standard steps from Lead Generation to Sales. You have to do a lot of heavy lifting before you can identify a qualified lead and then convert it to a sale.
Image 2.0 - The Lead Relationship
When it comes to a Lead Relationship, you don't have an existing relationship with the client for most of the time. You are taking your chances that the lead will be converted into sales by directly approaching the client. You have to go through The Lead to Sales Process illustrated in Image 1.0 to assess if the client is a qualified lead or not. You have to spend more time in validating if the lead is qualified or not using The Lead to Sales Process.
Image 3.0 - Receiving a Business Card
The Referral
The Referral
A referral is polished compared to a lead. It has been through most of The Lead to Sales Process and usually a referral will place you in step 4 which is Conversion. It is now in your hands to convert that qualified lead into sales. Another term I would use for a referral is "a qualified lead from my contacts."
Image 4.0 - The Referral Relationship
Unlike The Lead Relationship, The Referral Relationship has 3 stakeholders naming You, Mutual and Client. Let me walk you through the 6 Steps illustrated by Image 4.0 of The Referral Relationship.
Steps
Steps
- Client approaches Mutual and shares the problem or opportunity.
- Mutual shares the problem or opportunity to You and validates if you are the right business provider for the said problem or opportunity. The fact that the Client approached the Mutual, this shows that there is an existing need or interest to be addressed. The Client is already ready to make a purchase at this point from a business and hopefully that will be you.
- After the Mutual validates and confirms You are the right business provider, the Mutual informs the Client that You will be contacting the Client.
- Once the Client confirms the right time to discuss, the Mutual informs You the right time to contact the Client. Mutual informs You that Client is expecting You. Timing is key for a successful sale.
- You contact Client and pitch what You got. At this point 80% of The Lead to Sales Process is done for You by the Mutual, the rest is now in your hands to close a deal.
- Client makes a decision to contact You and sign a contract.
There you have it. A referral is powerful but remember a sharp blade can also have its mishaps. It is a double-edged sword and let me tell you why. If you are excellent at the business you provide, you will get more referrals from the Mutual and the Client. However, if you are a bad business provider, you will also lose all the opportunities of getting any referral or business from the Mutual's and Client's network. I hope you will heed this caveat with utmost seriousness.
Image 5.0 - Julian Canita
The Recap
The Recap
To recap everything, let's hear the words of Julian Canita, the President of BNI Eagles - Philippines,"A lead is anyone who may be interested in your offer. A referral is someone who is definitely interested in your product or service and ideally already have a better idea of who you are and what you do with the help of a referror. In dating, think of it like this: Leads are the people you find on dating apps like Tinder who match your ideal date. Referrals are the people your friends set you up on a blind date with because they just know that you two will hit it off."
Now you can walk on the streets knowing the difference between a Lead and a Referral after reading this article.
Do you want to increase your sales annually?
Do you want to increase your sales annually?
You can visit our BNI Champions - Philippines chapter! BNI members in Taguig Region is said to have an average of 5M PHP closed business from BNI members' referrals.
To learn how to visit our exclusive business development events, please talk with Champ - the chatbot of BNI Champions - Philippines chapter. BNI events are exclusive only to members and their visitors. But no worries, you can always name drop me, Therence John Resabal, upon talking with Champ so you can be added to the guestlist. Consider it as my early Happy Holidays gift.
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