Referrals are the best leads in the world. Period. Hands-down.

Referrals are the best leads in the world. Period. Hands-down. This fact cannot be disputed. This brief report contains excerpts from various articles, studies, and reports proving this claim. In each excerpt, full credit is given to the source of the article or data. (Links to sources, where available, are included in the footnotes.) In other words, the fact that referrals are the best leads in the world is not a mere claim by myself or by Never Cold Call it is an indisputable fact! Read on to learn why. Frank Rumbauskas Dallas, Texas From Investors Business Daily: An I.B.D survey of 1,569 investors who are current, former or likely future clients of financial advisers shed new light on how they keep up with investment information and learn about services available to them. 7% of current clients said they hired their advisers after they were directly contacted by them. Nothing beats a friend's referral, though. In a world increasingly reliant on virtual communities of strangers, the vast majority of investors are introduced to their adviser through recommendations from people they know and trust. More than 45% of clients found their primary financial adviser from a referral. Of those, 41% were referred by a friend or acquaintance, 34% by a financial professional such as a banker or accountant, and 21% by a family member. An effective way for some financial advisers to gain exposure is through Meetup groups, where neighbors with shared interests gather to exchange ideas and information. In IBD's survey, 15% of respondents ranked Meetup groups as important or very important sources of information about financial advisers or services.

1 1 Morey, S. (2013, November 11). Personal Referrals Trump Cold Calls From Advisers. Investor’s Business Daily. p. A22. www.nevercoldcall.com Referral Selling Facts and Statistics 2 From i Media Connection: Good technology systems typically are designed to automate manual best practices. Let’s take a look at key functions that great sales people all tend to have in common: • They build referral channels. The majority of salespeople are excellent net workers. Whether meeting people via the local rotary club, the area chamber of commerce or at the local pub, great salespeople can be very good at telling everyone about what they do – their friends, family, customers, other employees and even strangers. Great salespeople also know that the more people who know what they do, the better the chance of that specific network spreading the word. • They ask their channel for referrals. Most great reps never leave a meeting, business or personal, without asking for a referral – and they are skilled at handling it with a gentle approach. One of the most staggering statistics that I have recently heard is that between 70% and 80% of all people are willing to refer leads if asked, yet less than 15% of individuals and companies ask for them. [Frank’s note: This is sheer stupidity!] The great ones ask, and they ask often. • They motivate the channel. Compensation is a great motivator (just ask the majority of the 17 million commissioned sales reps in the U.S.) and many of the great ones build professional referrals networks where they compensate people and companies for leads referred to them that can eventually lead to business. There are both monetary and non monetary ways to in cent people to do things that actually work. • They nurture the channel. They always thank their network for referrals, they compensate their network in a timely fashion for referrals and they keep them in the loop.2 From Sales Force: Every seller agrees that referral selling is, hands down, the most effective prospecting strategy. When you prospect through referrals: • You bypass the gatekeeper and score meetings with decision-makers every time.

• Your prospects are pre-sold on your ability to deliver results. • You've already earned trust and credibility with your prospects. • You convert prospects into clients at least 50% of the time (usually more than 70%). • You land clients who become ideal referral sources for new business. • You score more new clients from fewer leads (because all of your leads are qualified). 2 i Media Connection: Selling Facts and Statistics 3 • You ace out your competition.3 From Continuity Programs: Lead generation from referrals benefits: • It costs less – Developing a relationship with a cold lead takes longer and costs more than it will to nurture a referral. You’ll spend more time on the phone or pay more for ads to get a cold lead, because that lead has no connection with your business. A referral, on the other hand, has an existing connection with your business, generally in the form of positive wordof-mouth testimonials from friends or family. • It’ll net you the right kind of customers – Identifying satisfied customers from which to source referrals nets you more satisfied customers. This self-perpetuating cycle of highly satisfied customers boosts your ROI in multiple ways. • It will increase revenue – Experts estimate that a lead gained from a referral will close at a rate as high as 60%, where as a cold lead, or non-qualified lead will close at a rate as low as 10%. It pays to focus on qualified, referred leads.4 [Frank’s Note: More proof that cold calling is a complete waste of your time and referrals are infinitely superior.] From Franchising.com: Overall, respondents said the top five most important factors in franchise development success were, in order of importance, 1) franchisee validation, 2) unit economics, 3) quality leads, 4) sales person, and 5) sales process. The Internet--at 42%--continues to dominate as the top source for franchise sales, identical with last year. Referrals were second at 31%, down a point from 2012. Brokers, at 17% (up 1 point from last year) and "other" at 10% (up 3 % from last year), accounted for the remainder of franchise sales in 2013. 

The number of respondents using this relatively low-cost method of recruiting leads (59%, compared with 58% last year) and those providing incentives to franchisees who refer prospects that result in sales (60% this year, 61% last year). The median referral fee, however, rose significantly, from $3,500 last year to $4,500 this year; and 15% said they pay $10,000 or more for successful referrals, most likely reflecting franchisers' increasing appreciation of the value of referrals in making new sales. In answer to special questions on the third quarter 2013 RMI survey, NAHB’s professional remodels on average attributed 37% of their leads to “Existing and Returning Clients” and another 37% to “Referrals from Clients.” No other source was responsible for more than 8%.

Not only are returns and referrals the most common source of leads, they’re also the best in terms of close rates. In the same survey, professional remodel on average said they closed 53% of their leads based on existing and returning clients, and 45% of their leads based on referrals from clients. Again, these %ages are considerably higher than for leads generated from any other source.6 From Client Wise Referrals are the lifeblood of a thriving financial advisory business. Client wise's proprietary research has shown that 71% of new assets for top-performing financial advisers come from one of two referral sources: clients and other members of your professional wealth management network, including commercial lenders, business evaluation experts, CPAs, attorneys and others. Client Wise research reveals that the number of touches and contacts in a referral-based sales cycle is about 50% less than in a cold prospect sales cycle. This is due to the carry-over of trust that is indirectly.

 Referral Selling Facts and Statistics 6 • Life insurance specialists: 35 percent • Mortgage brokers: 29 percent • Personal property and casualty agents: 12 percent What were the sources of all referrals? • Professional connections: 54.2 percent • Clients: 30.1 percent • Seminars/conferences: 13.5 percent Number of client referrals received each year (by adviser income group): • Moderate-income advisers: o 26.7 percent received 3-5 referrals o 12.3 percent received 6+ referrals • Middle-income advisers: o 44.0 percent received 3-5 referrals o 11.2 percent received 6+ referrals • High-income advisers: o 23.1 percent received 3-5 referrals o 29.2 percent received 6+ referrals How many clients did respondents have? • Moderate-income advisers: o 21.2 percent had 150-299 clients o 20.0 percent had 300+ clients • Middle-income advisers: o 30.4 percent had 150-299 clients o 33.2 percent had 300+ clients • High-income advisers: o 35.1 percent had 150-299 clients o 36.5 percent had 300+ clients 10 From Velaro: According to a recent survey by Jupiter Media Matrix, 70% of all Internet users are compelled to visit new web sites through referrals. How do you make this statistic work for your company? First, provide customer service worthy of a referral. Give your customers a reason to want to tell a friend 10 CEG Worldwide: 

Only 18% of businesses in the United States have referral programs in place despite the fact that two-thirds of all economic activity is influenced by shared opinions about a product, brand, or service (according to the Word of Mouth Marketing Association).11 From Baylor University Hanmaker School of Business: Baylor University researchers discovered that referrals and IVR (Interactive Voice Response) technology rank as the top two most productive lead generation activities in real estate. The Baylor researchers identified 18 different sources that real estate agents invested their lead generation dollars into. The top nine sources for lead generation spending were: • Direct Mail (23%) • Internet/Website (17%) • Print Advertising (14%) • Referrals (10%) • Signage (9%) • Repeat Business (6%) • Open Houses (5%) • Interactive Voice Response (IVR) Technology (4.5%) • Promotional Items (4.2%)12 From Hubspot: According to a 2012 Hubspot survey, 71 percent of consumers are more likely to make a purchase based on social media referrals. The same survey also found that 61 percent of consumers use search engines to identify and evaluate products before making a purchase.13 From Business Week: Survey results showed that the top three ways companies generated quality new leads over the past two years were referrals from clients or partners (22%), general referrals (16%), and cold-calling or