Understanding the Difference Between Leads, Reactive Referrals, and Proactive Referrals

Understanding the Difference Between Leads, Reactive Referrals, and Proactive Referrals

proactive-reactive referralsAre you getting leads, transactional referrals, reactive referrals or the holy grail of them all the proactive referral?  Do you know the difference? Most business people do not know the difference and most are just happy to get any of them.  All are valuable but each comes with a different level of risk and a need for higher levels of trust and education. It is important to know the difference between each as you are building a referral business.

So, let’s take a look at each category and how you can move from one to the other.

Leads are the most common type of business that is passed within networks. A lead can be as simple as a name of someone I gave your card to or a name with a phone number of someone who might need your product or services. This is often passed without any risk at all on my part. For that reason, I am happy to give leads to people I do not know well or know much about. My trust level does not need to be high to be able to pass a lead to the people in my network.

Transactional Referrals are given to fellow members of my network when I need a product or service. It is very easy to refer myself to others every time I need something and it is a good way for me to begin to build my trust for both your products and your services. Once I have done business with people in my network I am better able to tell the story of my experience with them.

Reactive Referrals come along when I know my network better, when I understand what they do. Reactive referrals happen when someone ask me if I know someone who can take care of what ever need the may have at that moment. It also happens when I hear someone complain about something and I refer them to you and let them know that you will call them and follow up. For this to happen I have to understand what you do and believe that you will make me look good. It is possible to build a very good business when you have enough people willing to listen and offer you as the solution to others.

Pro-active Referrals are the holy grail of your referral relationships. These are the referrals that I can generate for my referral partners simply by identifying need now or in the near future for my clients. Pro-active referrals require a higher level of education and trust with the members of my strongest network. These are the members who have the same target market as I, who are on the right side of my sales cycle and have the time and money to collaborate with me.

Each level of referral requires a higher level of trust with each other, a higher level of knowledge about each other’s business and a higher level of collaboration with one another.

If you want your network to refer reactive and pro-active referrals you have to be willing to invest a lot more time into building the relationships. You must have the ability to share the proper knowledge about your business with your network. This requires you to become more familiar with your target market and be able to share the correct knowledge with them.

High value referrals do not happen by accident, they are intentional and take time. Time to build trust, time to get educated and to educate your network. Take the time to do both.

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