The Difference Between a Lead and a Referral

We all must understand the difference between a lead and a referral because there is a big difference.

A lead is a contact and a referral is a connection. For example, a lead is, “I think there’s somebody that may need your service” and a referral is, “There’s somebody that I know definitely needs your service. Let me give you their name and number and you can tell them that I referred you.”

As you can see a referral is a much warmer connection and it’s a much better opportunity to do business. One of the things I recommend when you’re networking, whether it’s online or offline, is that you really try to develop referrals, not just leads, because it’s really important to understand that the quality of the referral is about as good as the relationship you develop. Now, if you develop a good relationship, then you’re probably going to develop a
good referral. When somebody gives you a referral, they’re giving a little bit of their reputation away. If the person does a good job then it enhances their reputation. If the person does a bad job then it hurts their reputation. So people are hesitant to give referrals unless they know you’re going to do a good job. That’s why it’s important to have established that relationship. Just as in live networking, you have to build that relationship to get quality repetitive referrals.