In this episode, Dr. Misner discusses the important differences between a “Lead” and a “Referral” and how important it is to understand those differences so that we give and receive only qualified Referrals, not Leads:
- BNI Used to Use “Lead” Slips Instead of Referral Slips
- Why Leads Are Less Valuable Than Referrals
- BNI’s Definition: “A Referral is an opportunity to do business with someone in the market to buy your product or service.”
- When to Pass the Referral Slip
- How to Read the Thermometer
- Who Calls Whom?
- Cool Referrals Can Warm-Up Over Time
- The Best Lead Is Not As Good As The Worst Referral
- Referral Marketing Beats The Heck Out Of Cold Calling
Complete Transcription of BNI Podcast Episode 006 –
Hello everybody and welcome back to the official BNI podcast. I’m Frank Felker in Washington DC joined on the phone today by the Founder and Chairman of BNI, Dr. Ivan Misner, calling in again from BNI headquarters in southern California. Ivan, I understand that you recently gave a keynote presentation to New York Life in Dallas, Texas. What was that about?
Dr. Ivan Misner:
I did. The New York Life organization brought me in to talk about networking. It was a great reception, and I will be going back to do the same presentation to a different group of New York Life agents over the year.
I can see where networking and word of mouth marketing can be very important to people in the insurance business.
For anyone in financial services and the insurance businesses, it is extremely important. They do a large part of their business through referrals. From time to time, you may hear them talking about networking and how big corporations don’t teach it.
If anyone is really going to jump into the process first, it is going to be a life insurance company, I think. They probably understand the need for this and want to spend the time to train people on how to do this more than any other organization. I think it will be the financial services companies doing this. They will start training regularly.
There was another question I had for you relative to BNI membership and exactly how we can best benefit each other with in-chapter and cross-chapter referrals. That comes down to what is the difference between a lead and a referral?
Interestingly enough, Frank, we used to have what we called lead slips instead of referral slips. It was a few years ago. I think we changed it about ten years ago. As time went on, we realized that there was more than semantics in the difference between a lead in a referral.
A lead is a contact that may come from any number of sources. The contact is generally not expecting your call. For example, if someone gave an insurance agent a list of people who just bought new homes, that might be considered a good set of leads. Unfortunately, none of the prospects are expecting a call from the agent, and it’s really not much better than a cold call.
A referral is the opportunity to do business. This is BNI’s definition. It’s the opportunity to do business with someone in the market to buy your product or service. They may have been told about you buy a mutual friend, acquaintance, or associate.
When you contact them, they already know who you are and what you do. It is stronger than just a lead in that this prospect has talked to your mutual acquaintance and is generally expecting your call. Hence, they are referred. They know you’ll be calling, and they know the topic will be.
In terms of the actual passing of the referral at the chapter meeting, it sounds as though that slip should not be passed until after the initial conversation has taken place between the person who is going to give the referral and the person that the BNI member will be referred to.
Yes. Generally speaking, that would be the case. You don?t want to hand out a referral until you?ve had a conversation with the person that you are giving as the referral. You?ll see on the referral slips in just about every country that they have a thermometer on them from one to five.
On the low end, there you are talking about someone who you have talked to and you can use the person?s name. You can say, ?Tell them that I referred you? but you really don?t know how serious they are. They may be willing to talk to somebody but it?s not a serious or a strong response.
The idea is that as you go up the thermometer, the stronger the response so that midway up, you may say, ?You can use my name and they?re definitely expecting your call. They didn?t say for sure whether they?re ready to buy right now that they?re definitely interested.?
Then you get up to the highest level, which is, ?They?re extremely interested. They know you are calling. I have given you my recommendation, and my recommendation goes a long way with them.It?s pretty much a done deal.?
So let?s say then that they did have a conversation was somebody. Let?s say that if you wanted to refer business to a mortgage loan officer and you happen to have had a conversation with someone who is just ready to refinance their home so they will be pretty high up on the other monitor. You have given your personal recommendation that you trust and work with this mortgage loan officer.
You may even have given the mortgage loan officer?s business card over to the perspective customer. But we shouldn?t expect that the customer is going to call the loan officer. The loan officer then from that point once they have received the referral should take the initiative to contact the customer.
Is a great question and it?s a great question because it really depends on who the customer is. If instead of a loan officer, you?re talking about an attorney, then the answer is no, the attorney is likely not to call you.
There are issues relating to the professions. First and foremost, we tell everyone to follow the guidelines and the rules of your profession. So there are some questions as to whether it would be ethically appropriate for an attorney to call even though they have been told this person is in the market. The same goes for psychotherapists. It?s probably not appropriate for them to be calling first.
Depending on the profession, you get a different answer. As an example, you used a mortgage broker. In that case, there is nothing wrong with a mortgage broker calling first. That would be completely acceptable. I would tell the mortgage broker to make the call. I would tell the BNI member that they?re expecting your call and it?s okay to call them.
You could wait for the phone call, but I think it?s a mistake to wait. You never know. Sometimes people forget that they have the card or they have lost the card. Life goes on and things get busy. They?re going to look around and say they have a referral for someone but they don?t see it, so they?re just going to go to lendingtree.com.
As a rule and depending on the profession that you?re in, I think it is very good to pick up the phone and call. If it says on the referral slip that I gave them your name and they?re expecting your call, and don?t blink. Pick up the phone and call immediately.
Absolutely. Anybody who is ambitious and motivated enough to be a regular BNI member is not going to sit back on their heels and wait for the phone to ring. They?re going to pick it up and call a qualified prospect right away.
Yes, and I think here?s where it is really important when you fill out the referral slipped to say how good this referral is in terms of how ready the person seems to be to buy. If they?re hot and they?re ready to buy something now, mark them as hot. But if they?re just shopping, let the BNI member know that this is a good referral but they?re not hot to buy, so it may take a little while to work on it.
I will take to referral at any level. A referral is a lot better than a lead any day of the week and that is the reason that we changed the name from leads to referrals. The best lead is not as good as the worst referral.
Certainly a person who is a lukewarm referral today might be a hot referral later on, and it makes sense to touch base with them today and begin building that trusting relationship over time so then when it is time to buy they?ll think of you.
Absolutely. Low end referrals oftentimes end up turning into business. They may not turn into business this week, but they will often turn into business down the road.
We’re just about out of time for this week’s podcast. Any last pearl of wisdom for the listeners this week?
The best referrals you can give are the referrals where the person is expecting their call. As you are talking to the people out in the community, let them know that this person that you are referring to them is going to be giving them a call. Then when the BNI member does call them, they will get a warm reception. That sure beats the heck out of cold calling any day of the week.
For Dr. Ivan Misner, I am Frank Felker saying we will see you next week on the official BNI podcast.