Contacts, Leads and Referrals: Your Life's Blood in Sales
While both a lead and a referral can be classified as a customer contact, there is a tangible difference between a referral and a lead. The difference is where the contact lies on an abstract and multi-dimensional continuum from the initial contact with the person to a closing, and beyond…to more referrals. What many people call a referral is often no more than a name and phone number or e-mail address, an “unqualified referral,” or more appropriately, a lead.
A referral requires less of your time and other resources to convert to a sale. A referral can be called a “qualified lead.” The better qualified it is, the more valuable it is to you.
The quality of customer contacts can be stated as:
A lead falls into categories 1 or 2…a referral falls into category 3. It should be the intention of your business to deal with more category 3 contacts over time and less of category 1 or 2. Doing so will allow you more time to build your business, spend time with your loved ones, or whatever else you deem important.
Leads and referrals are generated through many different sources.
True referrals fall into distinct categories.
Personal Referral – This is contact information and even an introduction from someone you know.
The average term of home ownership is some five to eight years, so you must leverage the relationship and goodwill you have created with your customer base by asking for the help of past customers, friends, relatives, and even acquaintances in obtaining new business. Referrals from satisfied clients are the “referral gold.” When a referral is made by another REALTOR®, communication with the referring REALTOR® and prompt payment of the referral fee is essential if you expect repeats from that REALTOR®.
Designation referral - If you are a CRS, an e-PRO, or a member of WCR, you can cultivate relationships with other REALTORS® who are members of these “communities” and referrals of this nature are usually of reasonable quality. Quick response to requests for assistance is the key, followed by follow through and completion of the transaction, and payment of that referral fee to the referring REALTOR®.
Leveraged relationships with other professionals such as tax preparers, CPAs, Financial Planners, Insurance Agents. These individuals have the trust and rapport of many people and if you can gain their trust and confidence, you reach many through a few.
Relocation companies – These are usually good quality referrals and worth your time.
Remember, the feature that distinguishes a lead from a referral, is the quality of the customer contact. How well do they know the party making the referral? If they have a high degree of trust and loyalty to the person making the referral, there is a good chance they will be loyal and have a high degree of trust in you.
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