A lead is a contact that may come from any number of sources. This 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, because the prospects are not expecting a call from the agent, it’s basically not much better than a cold-call.
A referral is the opportunity to do business with someone in the market to buy your product or service who’s been told about you by a mutual friend or associate. In other words, when you contact them, they already know who you are and what you do. It is stronger than just a lead because the prospect has talked to your mutual acquaintance and is generally expecting the call.