In my last blog post, I said we would discuss referrals vs. connections and since that post, someone has asked me about leads vs. referrals. Think of “Lead vs. Referral vs. Connection” as a type of sales funnel.
If you have ever gone to a networking function you will likely hear them talk about business passed and referrals given between the members of the group. The reason why they talk about referral is that the person referred is likely expecting a phone call or email from the person given the referral. This is a “warm introduction” and should result in an easier sell. (Frank’s client, Chris, is purchasing a home and needs financing. Frank recommends Danny a local mortgage lender. Chris is now going to be expecting Danny’s phone call.)
I love the definition of referral in the Collins Dictionary:
“Referral is the act of officially sending someone to a person or authority that is qualified to deal with them.”
The problem with a lead is that it is considered, “non-qualified.” The “lead” might or might not need the services of the “lead receiver”. The “lead giver” has a general idea that the “lead” needs the services of the “lead receiver” but they have not qualified the “lead” to ensure that the individual, in fact, needs the services of the “lead receiver”. When the “lead receiver” contacts the “lead” it is generally a cold call. The “lead receiver” will have to qualify the “lead” to determine that if it is in fact a referral.
When it comes to Lead vs. Referral, consider Quantity vs. Quality. Which would you rather work with?
Where does connection play into this? A connection is a referral to a new potential referral partner. A quality referral partner will bring you into their Sphere of Influence (SOI) and you will be regarded as the subject matter expert in your field. As a mortgage lender, I want to be considered the subject matter expert to Realtors and financial advisors so that they will refer their clients to me. Whenever I meet with someone and they ask, “Austen, who can I refer you to,” I always respond with, “I would talk with anyone that is looking to buy, sell or refinance their home. I love introductions to Realtors and financial advisors.”
As I mentioned in the last blog post, the purpose of networking is to Always Be Connecting,” not “Always Be Closing.”I was talking with a friend the other day that works in the financial services industry and he said,
“Austen, I really hate going to networking lunch groups because they are generally full of individuals in direct sales and I have no interest in signing up for their services.”
My challenge to him was to think bigger! Yes, he has a very specific client and referral partner; however, by thinking big and having an “abundance mindset,” it could lead to some big results. Helping him think through this, he realized that people in direct sales are trained to talk to the masses and could, in fact, be a referral source for him and could also connect him to new referral partners.
Whenever I meet with someone during a 1-2-1 meeting, I always ask “If you could only receive referrals from one person, what does that person do?” I follow it up with “I might not be able to send you multiple referrals but what I can work on is connecting you to referral partners that can refer you mass amount of business.” Hopefully, this will lead to Quantity AND Quality.
We have a lot to learn from the direct sales industry because they are trained to sort through leads, referrals and to determine their ideal referral partners, as well as to be asking for referrals. However, they have to be careful to not have “commission breath.”
In our next article, we will discuss my favorite phrase –“Commission Breath” – how to not have it and how to politely give someone a commission altoid.
Until next time, Happy Connecting!