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Tip, Lead, Referral - What's Best?

June 06, 2012 | Comments: 0 | Views: 183

One of the best ways to get your business associates to send you business is to send them business. This can be in the form of a tip, lead, or referral. But which is better in supporting the members of your business network? Sometimes people get confused about the differences among them, so let's define them first.

Tip - a helpful hint. Tips result from something you see or hear. Lead - indication of a potential opportunity. Leads usually require having a low-level discussion with a prospect about the want, desire, pain point, or complaint being experienced. Referral - recommendation to consult with a particular person or company. Referrals require that you delve more deeply into a prospect's problem and then make a recommendation to connect with someone who can solve it.

By these definitions, you can see that a tip would require the most work for a business associate to close a deal and a referral would require the least amount of work. Let's look at a few examples.

Example 1: Sending business to a real estate agent.

Tip: I heard that Joe, who lives at the corner, wants to sell his house. Lead: I talked to Joe, and he said he doesn't have a real estate agent. Referral: I talked to Joe about your real estate services. He asked that I connect you both by email.

Example 2: Sending business to a massage therapist.

Tip: I noticed that my neighbour Brenda has been rubbing her lower back when she's gardening. Lead: I talked to Brenda about her back and suggested a massage therapist. She thought it was a good idea. Referral: I talked to Brenda about your massage therapy practice and she wants you to give her a call at home this evening. Here's her number.

Example 3: Sending business to a hypnotherapist.

Tip: My brother has been a life-long nail biter and has tried lots of things to quit. Lead: I talked to my brother about hypnotherapy to overcome his nail biting. He hasn't tried it before and is interested in learning more. Referral: I talked to my brother about your hypnotherapy practice, but he has more questions than I can answer. He asked for your card and said he would call you this afternoon.

Many formal business networking groups recommend that their members provide only referrals to other members, not tips or leads. From the definitions and examples above, it would appear that a referral is the granddaddy of the three, since most of the work has already been done, and your business associate seemingly just needs to write up the invoice. Certainly, if you know someone well enough to engage her in a conversation about her problem and recommend solutions for her, you're more likely to generate a referral for your business associate. And referrals tend to produce more business than tips and leads.

But don't underestimate the power of a tip or lead for some of the people on your referral team. I have a sign maker on my team who told me that if I'm driving along and see a crappy business sign, just pull over, call him, and tell him who the sign belongs to. He has such a high sales success rate on cold calls that he just needs the tip. The more time you spend with your referral buddies, the more you'll get to know what works best for them. And in turn, they'll learn about the best types of prospects to send your way.

Happy prospecting!

Dave is the creative energy behind Streetwise Marketing Strategies. Download his free e-book, "What to do Before, During, and After a Networking Event", at

Source: EzineArticles
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