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Marketing 360® Blog

The Difference Between a Warm Lead and a Referral

There is a major difference between a warm lead provided by your lead-generation efforts and a referral that comes from a loyal customer. How you treat each determines if you win the business.

We have a marketing client that recently told us she wants to quit using our services. Naturally, we wanted to know what the problem was.

She told us the quality of the leads she was getting was poor. She wasn’t closing any deals.

This business is a wedding planner in a popular place for weddings. We looked at her funnel and assessed that the problem wasn’t untargeted leads. Nobody contacts a wedding planner in this area without a certain amount of intent.

So, the business was getting a decent flow of valid leads. Why wasn’t she winning more business?

The marketing team got on a call with this business owner and started asking probing questions.

When you get a website lead or voicemail, how quickly do you get back to them?

“Well, usually it’s 2 or 3 days. Depends on how busy I am. Maybe a week. Sometimes I procrastinate about calling people back.”

What are the most common questions leads ask and how do you answer them?

“They usually ask about budget. I tell them that we can’t really do anything for less than 75K. If they object, I tell them that’s what they need pay for top wedding services in this area.”

How do they respond?

“Well, pretty often they say they talked to somebody who could do it for like 45k, but I tell them it won’t be at our level.”

Is there competition offering similar services at those prices?

“Probably. I think yes. I mean similar. But not as good.

Okay, what else are you doing to follow-up with leads?

“Follow-up? You know, I just try to get that call in or email them back once if they did a web form.”

Do you do multiple follow-ups until you reach them?

“Usually not. I don’t want to seem like the pushy, salesy type.”

Okay, would you say you enjoy the sales process?

“Oh yes! I love working with clients and building out their wedding ideas. It’s really rewarding!”

That’s not what we asked. We’re talking about persuading these leads to work with you. About selling your services so you get the chance to plan their wedding.

“Well, I never used to have to do that. I’d get referrals and we’d pretty much just go straight into planning the wedding. The leads I’m getting from you aren’t like that at all. I don’t like doing the salesy thing.”

At this point, our team is exchanging glances. The leads we’re sending her are not the same as referrals. She doesn’t follow up. She hates the “salesy” thing.

In fact, her mindset is that working with clients is her sales process.

Could it be that the quality of the leads isn’t the problem?

Leads and Sales

There are two really important takeaways from this.

The first is that a marketing lead is not the same as an unsolicited referral.

An unsolicited referral is the hottest lead you can get. One of your happy, loyal customers told a friend to use you – without you asking them for the referral. They love your work and trust you enough to tell a friend you’re the best choice.

Of course, it’s going to be easier to close deals with this type of referral. They come to you with a high level of trust, all but already sold on your services.

A marketing lead is a different story. As an inbound lead, these people show interest and intent. They have a need for what you offer.

But these leads don’t have the same level of trust as an unsolicited referral. Your content made a positive impression (otherwise they wouldn’t have contacted you), but they’re far from sold.

For one, they’re probably still comparing you to the competition. For some reason, the wedding planer didn’t see it as a problem that her competition was offering similar services for 30k less. But that kind of differentiation is certain to lose sales.

Also, a marketing lead is warm – but not necessarily hot. These leads require multiple touches and persistence. You need a sales process in place so you can stay in front of them during their decision making cycle.

Some people call this being pushy or salesy. We call it persistence and persuasion.

Your Other Job

You’re a chef. Or a craftsman. You’re a consultant. Or a therapist.

You’re a passionate pro – at your chosen career.

But you’d don’t think of yourself as a salesperson. You offer value, but don’t see why you should have to persuade people or – worse – pester them with multiple contacts to win the business.

But you’re wrong.

You have a job to do that goes beyond your career skills and expertise. You need to be able to sell people your services.

Like it or not, you are a salesperson.

Our wedding planner is struggling to understand this, and it’s hurting her business.

The first instinct people have in this situation is to blame the lead source. All the leads from your marketing are poor. That’s the reason I’m not winning the business.

But she waits days to get back to leads, and even then only does so once. She makes no case for her business as to why she’s worth what she charges. She has no persuasive skills. She expects everyone who contacts her to already be sold.

But it rarely works that way. Marketing campaigns make the connection between the business and the lead, but it’s up to someone at the business to turn that connection into a customer. An outsourced marketing service simply isn’t in a position to do that work.

If you’re getting enough referral business to keep you busy, perhaps you don’t have this problem. But businesses that get that many referrals don’t hire marketing companies for lead generation. This wedding planner hired us because she needed more business; her referrals alone we’re enough.

We’re continuing to work with this client and get her some sales training. But a big part of that is simply realizing that she’ll have to work harder and be more strategic with marketing leads. The last piece of the puzzle is her proving to the lead that she’s the right person for the job.