Though the terms "business lead" and "business referral" are often used interchangeably, the two terms describe two separate business concepts. As it turns out, a lead is not a referral, but a referral can be a lead. This may sound like a riddle, but it is not. Let me explain.

A business lead is simply a hint or tip about a potential client or sale. With a lead, there is no connection or relationship between the lead and the person who acquires the lead. Leads are impersonal. Following up on leads requires a significant amount of energy in screening, qualifying, and closing the sale. In this sense, a lead is barely better than an uninvited call, visit, or mailing.

A business referral is more akin to a strong lead that is often accompanied by a recommendation from the referrer. Referrals are strong leads because they have already been screened and qualified by the person making the referral. This works because persons making a referral often have knowledge that makes them better able to judge the needs of the potential client and the products and services offered by third parties. Think of a real estate agent who is able to recommend an appropriate mortgage broker or a personal injury attorney who is able to recommend a specialist tax attorney.

Referrals are also considered to be strong leads because of the time in which they are made. Unlike regular leads, a referral is most often made at a time when the potential client is in need of a specific product or service. Referrals are fresh, live, and now. For example, a stock broker may refer a potential client to a Realtor, wedding planner, or other third party when the prospective client cashes out their investment accounts. The stock broker will do this at the time that the potential client has the money to spend and has indicated a need for a specific product or service.

Leads are particularly strong when the referrer tells the potential client to expect to hear from the third party. In these cases, much of the sales process will have already been completed before the third party even contacts the potential client. The potential client will be receptive to being contacted and, due to the anticipation of being contacted, be more apt to purchase the product or service.

Unlike mere leads, business referrals often involve recommendations. The recommendation may include a personal introduction of a third party or allowing the third party to mention the referrers name to the referral. These recommendations allow the referral to feel more comfortable with the third party. At this point, the referral is more akin to a closed sale. Indeed, in many cases the third party only needs to provide the product or service and collect their fee from the client.

There are quite a few websites and services that use the term "referral;" however, upon closer inspection, most of these websites and services are more aptly described by the term "lead." By applying this more precise term, it is easier to see the value of a website like Passitto.com. Passitto was designed to incorporate the benefits of referrals, as defined as strong leads plus recommendations.

With that said, let's test your knowledge. If I said "Passitto.com is the best source for you to obtain business referrals," would I be providing you, as the third party, with a lead or a referral? Of course, the answer is that I would be providing you with a lead to the best source of business referrals. If this is confusing, you might just sign up for Passitto and give it a try.

Labels: business, difference, leads, networking, referrals, sale

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