SBM Articles


Is It A Lead Or A Referral? Hint: Referals Are Better

by Jeffrey Gitomer

At several networking events lately, I have heard the terms “lead” and “referral” thrown 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’ve 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. I will tell you how they work and give you 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 20 years is Metrolina Business Council (MBC) in Charlotte, North Carolina – it’s one member per category (the best kind of group), and it meets informally twice a month. First and third Wednesdays from around 6:45 a.m. until 8:30 a.m. 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-yous 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 30-plus years, and many original members are 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 New York City.

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 its accuracy.

He said the three major criteria for successful networking and networking groups are time, referrals and trust – he said the intersection of those lines on an axis happens after eight to 13 months of getting involved, giving, and measuring results. After that, a business acceleration that allows the group and its members to grow exponentially takes place.

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 each other. Give trust, referrals and testimonials and bring visitors.

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 am 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 am doing business with whom I believe you could do business with, and I will make the introduction for you, with you.

The key to referrals is to give 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?

Jeffrey Gitomer is the author of 12 best-selling books including “The Sales Bible,” “The Little Red Book of Selling,” “The Little Gold Book of Yes! Attitude” and “21.5 Unbreakable Laws of Selling.”  His real-world ideas and content are also available as online courses at For information about training and seminars visit or or email Jeffrey personally at

Submitted 9 years 26 days ago
Categories: categorySales Moves
Views: 3217