Leads vs. Referrals (Quantity vs. Quality)

When it comes to finding new clients, just about everyone who has spent much time in sales knows all too well how big of a difference there is between a well-qualified referral and a lead that is not worth the paper that it is printed on. This is one of the key reasons why it is so important to train your established client base how to identify opportunities to promote your business instead and the proper methods for encouraging their associates to find out how you can help them meet their goals. Let’s take a quick look at the major difference between your typical sales lead and a solid referral.

Sales leads are the very lifeblood of many types of businesses and are the primary purpose of nearly all marketing campaigns. Most businesses obtain their sales leads from a wide variety of sources, such as advertising, customer inquiries and targeted sales lists. While standard leads eventually provide a business with a reasonable volume of new clients, salespeople often find that the leads that they obtain from many types of marketing campaigns are so unqualified that they are barely more effective than cold calling. The truth of the matter is that a mountain sales leads is not a whole lot if it is for people who do not need your services and do not know who you are.

Although a referral can technically be considered a type of a sales lead, there are a few special things about referrals that make them particularly valuable. When one of your current clients refers one of his colleagues to your business, he is essentially vouching for both you and your services. This means that the leads that you receive as business referrals are guaranteed to be much more willing to give your services a try, resulting in very high closing ratio. At the same time, you will find that new clients will be constantly be streaming in once you have put a good referral engine into place, which means that you will be able to spend less time on the phone generating sales and more time focusing on your actual services.

Yes, you will probably always rely to some extent on traditional methods like advertising and other marketing campaigns for a significant percentage of your business, but you will be much better off by viewing business referrals as the cream of the crop. By making referral development the central focus of your marketing efforts, you will be building the foundation for a reliable source on potential new clients for many years to come.

This article is a brief abstract from a core learning module included in a Marketing Jump Start program provided to our association and Power Practice Network members. As a member, you will gain access to our four key courses and Success Tools Pro, which provides a constant update of tools and resources for building your practice.

One Reply to “Leads vs. Referrals (Quantity vs. Quality)”

  1. I absolutely love referrals! There is something about having a prospective client sent to you that is already qualified and warm that puts a smile on my face. I enjoy them over straight leads any day.

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