Every business will say that they love referrals and every sales rep will ask you for referrals. Why??? Because referrals can be the low hanging fruit that keeps a business afloat in tough times. Referrals have much higher than average close ratio than leads, so if you are going to chase a prospect, why not chase the prospect that has the higher odds to close?

Leads Are NOT Referrals referral

Leads are fine to chase when you are looking to run around, but a referral is what we are after, so let’s discuss the difference. You can buy leads; they are offered to businesses all the time. You cannot buy a referral; you earn referrals.

A lead is when someone simply says, “I noticed that there was a place that needs your services. You should call them.” I do appreciate when someone thinks enough about me and my business to notice that someone needs my services, but if he knew the person with the need and had a relationship with them, he would have said this to me, “I know someone that needs your services and told them you would call them.” Do you see the difference between a lead and a referral?

The first example is pretty much like opening a list and calling the prospect, it is essentially a cold lead. In the second example, the prospect heard from their friend or trusted source that I am the right person to help them and to expect my call. When a prospect hears from a trusted source with a recommendation, the chance to convert that prospect to a client is up to 80 percent. In a world where we have the 80/20 Rule, I would rather chase the prospects that have an 80 percent conversion rate than calling leads that we hope to return 20 percent.

The first example is pretty much like opening a list and calling the prospect, it is essentially a cold lead. In the second example, the prospect heard from their friend or trusted source that I am the right person to help them and to expect my call. When a prospect hears from a trusted source with a recommendation, the chance to convert that prospect to a client is up to 80 percent. In a world where we have the 80/20 Rule, I would rather chase the prospects that have an 80 percent conversion rate than calling leads that we hope to return 20 percent.

Build Relationships to Gain Referrals

Sales people know how important relationships are. In Referral Marketing, you are building relationships through business and utilizing what people know about you and your character to act as your quasi sales rep. This is how you build what many call Referral Partners. These partners get to know you as you get to know them, and with any relationship, each one wants the other to succeed.

We begin to listen for buzz words that we have gleaned from our partners, so that when we hear them, we will ask that person that said it, “If you would like to take care of your issue, I know someone that can help. May I have them give you a call?” When you give that partner the referral, they will be so happy they will work twice as hard to get you a referral and in return, you will work to get them another. That is referred to as Givers Gain. Think about how a group of like-minded business people could become quite a force when they start helping each other succeed.

clientsStart to Build Your Network

From the first day, you have been telling the world how great your company and services are, now you need to find those like-minded business people who are not competition for you to be your partners. Now is when integrity plays the biggest role. If you cannot deliver on what you promise, then go get a job predicting weather because in a business environment, if you do not deliver, then go home.

Get out into the community and support something just because you want to. Join a local Rotary Club and learn to give… remember Givers Gain? Here is a prime example, the people in our local Rotary Club do not care what your business is, but once others in the group see that you care, then they will ask about you and your business.

Look into professional “Industry Exclusive” networking groups. These groups will have fees associated, but the return can be exponential. I have been in groups with 30+ members and I was the only one in my profession present. We would meet regularly to discuss business, and most importantly, we would educate each other on what makes a good referral. Imagine having 30 additional salespeople on your team… the future is unlimited!

Other places to find partners is to be active in your local Chamber of Commerce or Associations and Non-Profits in which you have interests. There are networking opportunities everywhere you turn. To build those lasting relationships, be the best that you can be and take on the spirit of making a positive difference in the community and you will build that referral network.