Module 2: Leads vs Referrals (and the Power of Gratitude)

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.

Understanding General Sales Leads

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.

How Referrals are Different

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.

Remember, No One Succeeds Alone

If your idea of success consists of crossing the finish line alone but triumphant, you’ve got one of two things coming your way: a ton of frustration or a change in perspective. Understanding this simple but crucial point can mean the difference between your business thriving a year from now or sitting alone at home wondering what went wrong.

Whether you are a regular reader or just happening to come by, the chances are that you’re here because there’s something about working solo and building something of your own that reaches you on a fundamental level. Although I might be biased, I’d say that’s at least admirable if not downright inspiring. The key is keeping the solo side of things in perspective.

Take for a moment the example of lone wolf, an animal I know I personally can relate to a bit. The iconic image of the single wolf alone in wild, thriving against the odds with a path all its own, might be a thrilling one, but that’s an image that only tells half of the story.

Like us, wolves are social animals that evolved to live and hunt in groups, and they can only bring down their favorite game when they work together as a team. Lone wolves, like many mislead solo or small business owners, are generally forced to settle for scraps or much smaller prey. And while that might work for some niches, it’s probably not the direction most of us set out for when we to build our own businesses.

The point is simple. No one gets very far on their own, and, really, who’d want to? Keep that in mind when you’re going about doing you’re own thing, and keep building those professional and personal relationships that you’re going to need to keep moving forward.

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.

The Power of Gratitude in Referral Marketing

With all of the attention that we give towards referral generation, it’s easy to forgive that it’s sometimes the little things like a simple thank you that matter most.

Let’s take a moment to discuss the role that gratitude plays in the generation of high-quality referrals from the most important contacts in your professional network.

Yes, it’s true that most professionals love to give referrals to the services and businesses that have gone the extra mile in meeting their goals. However, the truth of the matter is that showing a little appreciation for the people who are actively promoting your business can go a long way to greasing the wheels of your referral engine.

Even a token as simple a card or a quick phone call thanking someone for giving out a referral for your business will encourage your contacts to be on the lookout for other opportunities to spread the word. Many organizations go a step further by actively encouraging their network to provide them with referrals by rewarding them thank you dinners, reciprocal referrals and other tokens of appreciation.

However you choose to show your colleagues how much their support means to you, don’t make the mistake of letting opportunities to boost your referral engine slip through the cracks due to oversight. Keep an organized record of which of your contacts are actively providing you with referrals and be sure that you are following up with them with a kind comment. These records can also be a great way of tracking opportunities for improving your referral engine, such as a very promising contact that has not generated the opportunities for growth that you may have expected.

Getting Started - Action Steps for Your Next Coffee Break

We will be diving into developing your referral formula in the next module. One great way to prepare while integrated what we've covered here is to consider just how many referral sources you probably have in your own network

  • Take a few minutes to jot down five to ten people in your network who would be likely to refer your business under the right circumstances.
  • Next, ask yourself whether these individuals know whether you are actively looking for new clients and would welcome their referrals. Mark a simple yes or no answer to this question for each of these contacts.
  • Lastly, consider how well each of these people could explain to someone what it is you do? Again, mark a simple yes or no answer to this question for each of these contacts. 
  • Review your list. If you are like most of us, chances are that you've got some great sources of referrals out there who simply don't know that you'd welcome them or even how to explain what it is you do. 

Ready for a deeper dive? Explore the resource below!

When you are ready to really dig into this stuff, remember that there’s a real mix of marketing advice out there. Some of it’s awesome, some of it’s half-baked, lots of it is outdated, and a whole lot of it is designed to help sell products, not professionals services.

We’ve filtered through the best of what is available to provide you with actionable advice in our Deep Dive recommendations that are from the most trusted resources and are designed specifically to promote professional practices like yours.

Deeper Dive Recommendation: Why referral marketing is awesome infographic from Referral Candy

Seth Godin argues in this TED talk the Internet has ended mass marketing and revived a human social unit from the distant past: tribes.

Founded on shared ideas and values, tribes give ordinary people the power to lead and make big change.

This is related to what makes referral marketing work in some powerful ways. We recommend spending 30-60 min with the TED-ED lesson available for this talk. Watch, think, and dig deeper on how these connections and reciprocity can enhance the relationships that fuel your referral engine.

Todd McCall

Instructor

I help practices who are marketing professional services get the attention they deserve by developing an online presence that converts visitors into clients.

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