When it comes to referrals, not all are created equal. As you embark on a strategy to increase referrals it’s important to distinguish between the two main types. At Rocket Referrals, we call these two types of Inbound Referrals and Outbound Referrals. One is sure to convert into a sale while the other might not be much better than your average lead. So when you invest in a referral strategy where are you going to put your money? Inside this post, we’ll talk about what exactly inbound and outbound referrals are, the major differences between them, and finally discuss where you should be spending your time.
These are the gold standard when it comes to referrals. They convert almost 100% of the time and are your most qualified leads. Inbound referrals come directly to you after one of your customers or constituents have mentioned you. When someone you’ve never heard of comes to your office and mentions a previous customer…congratulations, you’ve just received an inbound referral!
These referrals are the ones you are uncomfortable asking for. This is the type of referral you often read about in books or online articles that discuss “how to ask for referrals”. Outbound referrals require you to make an outbound call after you get a name. To us, these referrals are only slightly better than an average lead and are not as qualified as inbound referrals.
Which is better?
Our view is that inbound referrals are where it’s at. Here’s why.
- An inbound referral is a qualified lead, it’s someone that is already looking for your product, or that was convinced by a friend they needed it.
- Inbound referrals trust you more. Their friend’s word is mostly transferred to you.
- Since they came to you, you don’t have to feel like you have to “sell” them. Instead, jump to focusing on what is right for them.
Outbound referrals, on the other hand, may or may not have these qualities. However, not all outbound referrals are ineffective, that is of course if you better qualify the lead and take the extra step to get a personal introduction.
You’re here because you understand the importance of referrals, but it’s also just as important to understand the type of referral you need. Your ultimate goal is to get people coming to you and generating as many inbound referrals as possible. Getting more inbound referrals doesn’t start by asking for referrals, it starts by finding the people that will talk about you and encouraging them to share with their friends and family. As it turns out a good outbound referral strategy doesn’t start by asking for referrals either. It starts by asking for the right type of referral and doing what it takes to get an introduction.