Guest Post: Lead vs Referral

Nov 14th '18

What is a lead versus a referral?


  • A Lead

A lead is a contact that may come from any number of sources. The contact is generally not expecting your call. For example, if someone gave an insurance agent a list of people who just bought new homes, that might be considered a good set of leads. Unfortunately, none of the prospects are expecting a call from the agent, and it’s really not much better than a cold call.


  • A Referral

A referral is the opportunity to do business.  Here’s one definition. It’s the opportunity to do business with someone in the market to buy your product or service. They may have been told about you buy a mutual friend, acquaintance, or associate.


When you contact them, they already know who you are and what you do. It is stronger than just a lead in that this prospect has talked to your mutual acquaintance and is generally expecting your call. Hence, they are referred. They know you’ll be calling, and they know the topic will be.



Imagine there is a thermometer for the referral from one to five.


On the low end, there you are talking about someone who you have talked to and you can use the person’s name. You
can say, ‘Tell them that I referred you’ but you really don’t know how serious they are. They may be willing to talk to somebody but it’s not a serious or a strong response.


The idea is that as you go up the thermometer, the stronger the response so that midway up, you may say, ‘You can use my name and they’re definitely expecting your call. They didn’t say for sure whether they’re ready to buy right now, but they’re definitely interested.’


Then you get up to the highest level, which is, ‘They’re extremely interested. They know you are calling. I have given you my recommendation, and my recommendation goes a long way with them.  It’s pretty much a done deal.’



A referral is a lot better than a lead any day of the week.  The best lead is not as good as the worst referral.


The best referrals you can give are the referrals where the person is expecting their call.  As you are talking to people, let them know this person you are referring to them is going to be giving them a call.  Then when the person you’ve referred to them does call them, they will get a warm reception.  That beats cold calling any day of the week.


If you are exploring Network Marketing opportunities and would like to find out more, please get in touch with us.


At LS Consultancy, partner with business men and women who are building their own path. Entrepreneurs that are looking for a work life balance that’s on their terms, business owners looking to expand and grow their presence locally. People looking for an alternative to the 9-5 so whatever your reason, we’d love to hear from you.


About the author: Stuart Ritchie


Stuart has previously been employed, working long hours in the finance industry for many years earning good money, but having no control over life. He also run his own property business, with the stress of staff, cashflow, huge borrowings, etc.

In July 2007 he was introduced to a simple proven business system that he worked a few hours a week, increasing profits and reducing overall working hours, creating more time for the things that are important. After a couple of years of part time effort we was able to “sack the rat race” and “retire” at the age of 38, with a passive income that surpassed anything he had earned before, growing monthly.


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