Is it a Lead or a Referral? HINT: Referrals are Better.

Is it a Lead or a Referral? HINT: Referrals are Better.

Written By Jeffrey Gitomer

KING OF SALES, The author of seventeen best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His live coaching program, Sales Mastery, is available at

Having attended several networking events lately, I have heard the terms “lead” and “referral” bantered around.

Which would you rather have? Referrals of course. It’s the personal power of a sales lead. A recommendation, not just a name. Credibility, not just a place to call.

I can’t tell you how many times I heard the term, “don’t use my name” when passing along a possible lead. Seriously?

HISTORY: I have attended many (many) networking meetings and belonged to several networking groups.

Here’s how they work, and ideas on how you can join groups that are willing to
give referrals rather than leads.

The group I have belonged to for the past twenty years is Metrolina Business Council (MBC) in Charlotte, NC – it’s one member per category (the best kind of group) – it meets informally twice a month. First and third Wednesdays starting around 6:45am until 8:30 or so. About 100 members who all know each other. Many for 20 years or more.

The meeting starts out with early networking. Members get there early to talk and connect. About 30 minutes. Then a buffet breakfast followed by going around the room and, member by member, saying thanks for business, lunch, opportunities, and referrals. No measuring of who did what, just a sincere appreciation for business and opportunities. My personal goal is to give one referral, and to be thanked at least five times at each meeting.

After the thank-you’s there’s a speaker for 30-minutes or so and a general exchange of information and business ideas during the networking time. It works, and major friendships are built. Oh yeah, and people do business with one another and give referrals to one another.

The group has been around for thirty-plus years with many original members still active. It works.

Then there’s the more formal type of networking group. The best known and largest of which is BNI – Business Networking International. The reason I like BNI is that the focus beyond networking is on:

  • internal testimonials
  • building personal and business relationships
  • customized, specific
  • creative personal commercials
  • bringing in outside guests
  • generously offering genuine business referrals, not leads, and reporting on closed business.

I have attended several BNI meetings as a guest, been to some informal one-on-one meetings, and even given a talk to one of the groups in NYC.

I was lucky enough to be present when Todd Hallinger, one of the owners of the NYC BNI franchise, gave a short talk on the value of BNI and referrals. It was a very interesting perspective on the networking/relationship process and worth repeating for both its insight and accuracy.

He said the three major criterion for successful networking and networking groups are:

  • time
  • referrals
  • and trust

He said the intersection of those lines on an axis happens after 8-13 months of getting involved, giving, and measuring results. After that a business acceleration takes place that allows the group and its members to grow exponentially.

Here are Todd’s hallmarks:

  • You must let time pass to let people get to know the real you. Your first impression needs to be the REAL YOU. And you must consistently display it.
  • You must be willing to give without expectation. Meet with each person in the group more than once, get to know and like one another. Give trust, referrals, testimonials, and bring visitors. I always say, “All things being equal, people wanna do business with their friends. All things being not quite so equal, people still wanna do business with their friends.”
  • You must earn the trust of others by the way you conduct yourself, give value, do business, and give trust first. The group is built on trust that is gained slowly over time. Trust based on performance, consistency and truth.

Here are some definitions that will help you give and get more referrals:

DEFINE BLIND LEAD – here’s a name, don’t use my name.
DEFINE LEAD – here’s someone I think you could do business with, you can mention my name, but it won’t mean anything.
DEFINE REFERRAL – Here’s someone I am friends with, have a relationship with, and/or I’m doing business with that I believe you could do business with.
DEFINE ACTIVE REFERRAL – Here’s someone I am friends with, have a relationship with, and/or I’m doing business with that I believe you could do business with, and I WILL MAKE THE INTRODUCTION for you, with you.

The key to referrals is giving them BEFORE you get them.

The BNI phrase is “Givers Gain.” Mine has always been, “The best way to get a referral is to give a referral.” And you can substitute words into that phrase (loyalty, trust) and the philosophy and outcome remain the same.

If you’re REALLY looking to grow your business without being perceived as a taker, or worse, a pest, or even worse, a beggar, just start giving referrals. But I issue a caution: THIS REQUIRES WORK.

Most salespeople are not willing to do the hard work that makes selling easy. You?