All “Referrals” Aren’t Referrals and Aren’t Created Equal

The definition of a referral has become extremely diluted today.  Most sales lingo generalizes different types of lead generation and unfortunately groups together terms because they seem similar.  Terms like introduction and word of mouth buzz are explained to be the same as a referral.  But nothing could be further from the truth.

Being introduced to someone is not necessarily the same as being referred to someone.  And even though someone spoke really highly of you to a friend yesterday (word of mouth buzz) it doesn’t mean it’s a referral. I see people confuse and misuse these terms all the time.

So how do you know the difference?  How do you know what is a real referral?

Let me break it down for you as to what a real referral is and what it is not.

*I’ve also created an easy to use Cheat Sheet that you can download to provide you with a quick snapshot of the definitions below. You’ll be able to quickly use the cheat sheet to decide if a referral is a real referral again.

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Definitions & Examples

Definition: When someone you know tells you a company may need your service or product but doesn’t make a connection for you.  Yes, it is still a lead even when they tell you to use their name.

Example: “Hi. I know that XYZ company could really use your help and services/product.  The contact is Tom and here’s his number.  When you call him use my name.”

Word of Mouth Buzz
Definition: When people tell you they have mentioned you or talked about you.  They may even share what they said…like how awesome you are.

Example: “Hey I was talking to my client Dan the other week and mentioned you.  He’ll reach out.”

Definition: The person connecting you with a possible new client introduces you to each other (normally via email) but doesn’t state you should explore working together.  They typically use words like “synergy,” “great connection,” “get to know each other,” etc.

Example: “Ed meet Stacey Randall and Stacey meet Ed Smith.  You two are great people and should know each other.  Happy connecting.”

Definition: When you are connected with a potential new client by someone (the referral source) and they state the potential new client expressed a need (problem, pain point) and they know you can help them.

Example: “Stacey, I have copied Cindi on this email.  She and I were talking the other day about her need to grow referrals in her business and I instantly thought of you.  Please connect to schedule time for her to learn more about you.”

Can you see the difference?

At the heart of a referral is the connection to a need.  Meaning how you are positioned by the referral source (the person referring the prospective new client to you) is what makes a referral an actual referral.

What keeps a lead from being a referral?

There is no connection to a person who may need your services or products.  While being able to use someone’s name is better than not being able to – the person who provided me with the lead didn’t make a connection which could be for a number of reasons (most of them not good).  Reasons like what they heard is a rumor and there may be no real need, they think the company needs you but the company doesn’t think that, or they won’t put their name on the line (in writing via an email)

What keeps word of mouth buzz from being a referral?

By not connecting me with Dan via an email so I can reach out removes me from the driver seat and significantly decreases the odds that Dan will reach out.  And not because Dan doesn’t want to explore working together…but Dan is busy and he’ll likely forget.  Just human nature.

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What separates an introduction from being a referral? 

While the referral source has made a connection between you and the potential new client (Ed in our example above), there is not an expressed need to work together.  By not saying it – that we should explore working together – the intended referral just became an introduction.  Which makes it harder to set the first meeting and you have to do some extra work establishing why you are meeting. Positioning is key.

I’m certainly not against introductions and word-of-mouth buzz but they aren’t referrals.  To be a referral the key that is needed is for the trust the referral source has for me – to take care of Sally or Dan – to be actually transferred to Sally and Dan and that can only be done by stating why we should meet.

“Let’s See Where This Goes” 

Now I’ve gotten pretty good with how I respond to leads, introductions and word-of-mouth buzz and my responses are now just part of my process.  But in the beginning I lost a lot of opportunities and wasted a lot of time on “let’s grab coffee and see where this goes” networking meetings because I didn’t have a strategic response to turn an introduction or word-of-mouth buzz into solid referrals.  I always thank someone for a lead but never follow up.  I think following up on a lead is almost as bad as cold calling.  But my perspective on bringing in new clients has changed over the years since 95% of my clients come through referrals.  I just don’t need to follow up with leads.

So now you know the difference between referrals, introductions, word-of-mouth buzz and leads.  Use this new understanding as a way to build responses to turn all introductions, word-of-mouth buzz and leads into referrals.

Don’t forget to download the free cheat sheet and keep it handy for whenever you need it.

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