Not All Networking Leads Are Created Equal
There is a lot of confusion about what actually constitutes a “referral” in business networking today. Just to be clear, the definition of a “lead” is simply the name of a prospective customer for your product or service without regard to whether they actually have a need or desire to purchase it in the near future. A “referral” is a type of lead, but every lead does not qualify as a referral. Today we will explore the various types of leads, and what exactly constitutes a referral.
The first kind of lead is a “tip.” This is simply information passed on about a prospective customer that someone should follow up on. A tip can vary in the quantity and quality of the information, and thus its value to a salesperson will vary widely. A very valuable tip will include a lot of current and useful information the salesperson can use to advance the sale. For example, someone might tell another salesperson, “You should call ABC Company. i heard their CEO, Bob Smith, is unhappy with their XYZ vendor because they had quality problems, and is looking to make a switch in the next 90 days.” On the other hand, a weak tip might just include the name of the company, leaving the salesperson to dig up the name and contact information of the decision maker before they cold call them to see if there is any interest. The one characteristic that makes a lead just a tip is that the giver is not giving the receiver the permission to use their name when contacting the prospect.
The next type of lead is an “endorsement.” This kind of lead is really a tip in which the giver is known by the prospect, and the giver grants the salesperson permission to use their name when they call. For example, if someone says “Tell Bob Smith over at ABC Company that I told you to call” that is an endorsement. The giver is now taking a little risk by putting their reputation on the line by giving the salesperson permission to use their name when they call, but they are not contacting the prospect to confirm there is a need or desire to meet the salesperson.
From the salesperson’s perspective this endorsement is often better than a tip, but that really depends on how highly the prospect regards the endorser. There is also still a considerable risk that the prospect doesn’t like the endorser, or doesn’t believe they really endorsed the salesperson, or has no interest in discussing the product or service offered. For these reasons, salespeople should not be surprised to find the prospect unreceptive when following up on an endorsement.
The next type of lead is an “introduction.” In today’s modern age most introductions are made by leaving a voicemail or sending an email to the prospect introducing the salesperson, and alerting them to the fact that the salesperson will be calling soon. While this is certainly better than a tip and has more credibility than an endorsement, the drawback is that the salesperson still has no idea whether the prospect has any interest in speaking with them.
This brings us to the holy grail of business networking – the “referral.” A referral is a lead in which the giver has contacted the prospect and secured their interest in speaking with the salesperson. When the salesperson calls on a true referral they will almost always find the prospect receptive and willing to talk business.
It is important for you to realize not all referrals are created equal. The effectiveness of the referral has to do with the credibility of the person making the referral. That is why referral from an existing customer is always the most effective, because they are speaking from first hand experience about how the salesperson’s product or service has positively impacted their life or business. The next most useful referral is one from a close friend, important vendor, or trusted advisor (e.g. accountant or lawyer) with a convincing endorsement of the product or service.
The secret to successful networking is to receive as many high quality referrals as possible. One way to do this is to ask someone who is offering you a tip, endorsement, or introduction to make a referral instead. You might say, “Sue, thank you so much for the information on ABC Company. I’d like to ask you another favor; would you be willing to call Bob Smith and tell him that you believe the two of us should speak? By confirming his interest, I can call and know that I won’t be wasting either of our time.” The answer may be “No” for a variety of reasons, but it can’t hurt to ask.
Knowing the difference between these different types of networking leads will make you a better networker and will raise the game of everyone you interact with. It will also make you more willing to pick up the phone and make a proper referral since that is what you would like to receive in return.
Always remember that any kind of lead is better than no lead at all. You should always be grateful when someone takes time to help you in even the smallest way, and be sure to thank them for thinking of you.
- Which of these various types of leads do you receive most often? Why?
- Are there any other kinds of leads that you can think of?
- What can you do to get more referrals instead of tips, endorsements, and introductions?
- Consciously identify each lead you receive as a tip, endorsement, introduction, or referral, and then use the proper vocabulary when thanking the person who gave it to you.
- Politely ask someone who is giving you a tip, endorsement, or introduction if they would be willing to make a referral instead.