Referral vs Reference in Sales, What is the Difference?

In the word of sales, you will hear terms like "referral" or "reference" being used and it is important for you to know the difference between the two and a few scenarios where each one is applied.

The Difference Between a Referral vs a Reference

The difference between referrals and references is one is a passive action and the other is an active one. A reference is considered passive because others will contact them to validate your claims, whether that be about your credentials or your work with past customers, while a referral is a person that will actively recommend you or your product to others.

Referral vs Reference Explained

Referral

A referral is established when someone mentions you, your company, or your product to somebody else. For example, if you have built a SaaS business, one of your customers could send your website to another person with the idea that your product would help solve their problem as well.

In fact, a great selling strategy that a lot of companies use is to use a referral program tool like Post Affiliate Pro that makes it easy to enable others to recommend their products to others and get a commission from each successful sale.

Use a referral program tool like Post Affiliate Pro

Reference

A reference is when a person provides information about another individual, for example, if someone. Referrals are active participants in your success. As a person, referrals can open up doors to you that you never thought available, as a company, referrals can buy from you that you never thought possible.

For example, if you give a prospect a list of references to call and discuss wait for a call to confirm claims while a referral actively reaches out to people on your behalf.

Business Reference

Business Reference B business references are objective (or should be) third-party professionals that are hired by your customer to perform an objective review and assessment of your company. The reference can be an industry leader, a research firm, or a government agency that provides objective third-party validation of your company's statements and claims. The following is a statement from a third party that performed a review of my company's services and products.

A personal reference should be a person whom the customer knows and trusts and this person should have some experience with the company.

Personal References

Personal references can be a very powerful tool to use when applying for a job, setting up a meeting, or making a sale. The words they use, how they say them, and even hesitation when answering can

In both scenarios, in order to get references and referrals, you and your team need to provide an amazing experience that makes others go out of their way to help spread the good word. A reference or referral will never be given if not deserved.

Without good references and referrals, it is extremely difficult to succeed. It’s hard to get good-quality references and referrals, but when you do, you have to follow up on them. Many people don’t follow through on their references, but you have to make it a priority. References and referrals can make or break your success The sales and business development industry is a very competitive field. Salespeople in this industry work hard to secure contracts from potential clients.

However, these salespeople can't rely on only their own connections in this competitive field; they need the help of others for their contracts. Salespeople in this industry can use referrals as a way to gain clients. These referrals are unsolicited, which means that two people (salesperson and client) who don't know each other find satisfaction with a product, service, or company. The referral is a connection between the two people, and it is likely that the client will gain profits from the work of the salesperson. These referrals can make a significant difference in a company's profitability.


Greg Tucker

Written by

Greg Tucker

Founder & Editor-in-Chief of Oncore

Greg Tucker is the founder of Oncore. With a background in digital marketing and many years of working with small businesses, he is creating and curating content on Oncore to help others build their own startups.


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