Early on in my freelancing career, I met a woman who came to every single networking event and constantly pushed her marketing services on everyone in attendance. Her pushy approach felt a bit icky, but she talked a good game. And as a freelance designer who offered graphic design and web design services, I was interested in finding new referral sources.
So when she reached out to talk about a potential strategic partner relationship , I booked a call. But that’s when things started to go wrong and eventually I had to ask her to stop sending me referrals.
Here’s what happened:
- She wanted me to refer every person I came in contact with to her for marketing services in exchange for a referral fee.
- She promised to send me tons of leads for web design, but demanded a referral fee that was pretty hefty.
I shared that I don’t blindly refer or mass refer people to one person just for a commission, but always seek to find out what a prospect needs and refer them to the best person, agency, product or training that fits their needs. I also told her that her large referral fee was an issue as I was doing much smaller projects with much smaller clients back then.
She wasn’t happy and told me point blank that she wanted to refer people to me because I was the best, but without a big referral fee she would just send them to someone else even if that meant her clients would have worse results.
I couldn’t believe that she told me that she based her referrals on commissions, not on what was best for her clients. That is so far out of alignment with the way I do business, I just couldn’t agree. Somehow — and to this day, I don’t know how — we agreed to a trial run. Over the next few months, I was inundated with referrals she sent my way.
The only problem was that none of these referrals were a good fit and zero converted to paying clients, which resulted in frustrated and irritated prospects who didn’t understand why they were referred to me. Also, managing the referrals was eating up my time and I ended up having to ask her to stop sending me referrals.
This experience taught me a lot about building referral relationships and turning contacts into referral sources and lead generation machines. Here are the key takeaways:
All referral sources are not created equal
When building a referral-based business, the goal isn’t to get as many referrals as possible, but to get the best quality referrals. Quality will always win over quantity because:
- Quality, vetted and strategic referrals will convert to paying clients at a much higher rate.
- Lots of low-quality referrals will take up a lot of your time without producing any profits.
Get total clarity
When others aren't sure what you do best, who you can help the most and what type of results your clients and customer enjoy, it is virtually impossible for them to refer someone to you . Similarly, when someone doesn’t know exactly what type of clients you want, they’ll end up sending you everyone, even if they’re not a good fit.
When you make a referral, you want to feel confident that your friends and family will get the best, get exactly what they are looking for and get what they need — and you can't do that without the right information.
Think about these benefits:
- When you have clarity about what you do best, how you're different, why you're the best choice, and what big results you help others achieve, something magical happens: other people gain the same clarity.
- When you know exactly who your ideal client is and have a written ideal client profile that you can share with the world, something magical happens: other people discover who would be a perfect fit for what you offer.
- When your network, audience and peers know exactly who you are, what you do best, and who would be a perfect client or customer, it becomes very easy for them to identify potential referrals and send them your way.
Create referral partnerships
In addition to cultivating referrals one at a time through your clients and customers, it's also smart to create strategic referral partnerships with complementary businesses. One good referral partnership can create an entirely new income stream of clients and customers.
The best, most powerful and profitable referral partnerships are between service providers that serve the same market, offer complementary services and operate with the same level of professionalism, integrity and expertise.
Use a trial period
Don’t rush into a referral partnership with a commission structure or affiliate payout too fast. Create a trial period that lasts a certain amount of time or spans a certain number of projects first to make sure the referrals and leads you receive are:
- High quality and a good fit.
- Clients you enjoy working with.
- Projects you find interesting and in alignment with your skillset.
It’s also important to use the trial period to review the relationship your referral source has with the person they are referring to you.
For example, I once received several referrals from a copywriter that converted to paying clients. The money was good, the project was interesting, and the client was great to work with, but the copywriter kept making suggestions about the website that were three to five years out of date and not in alignment with current best practices. This put me in the awkward position of explaining why these suggestions weren’t a good idea and made the client very frustrated.
Because the clients were her clients first and she felt like she was doing us a favor by making the referral, the copywriter wanted us to implement her suggestions without offering our professional expertise and opinions. Unfortunately, that behavior wasn’t in line with how we do business, so we had to end that referral relationship.
After that, I implemented a referral partner trial period. A referral partner needed to make three referrals that resulted in a great experience to become eligible for future commissions or affiliate fees.
Keep communication open
The key to a successful referral partnership is regular, open and honest communication.
Help your referral partners stay excited about referring others to you by staying in touch with them and keeping them in the loop. Be sure they are the first to know about your new services, products, launches, sales and business changes.
Create special referral opportunities and rewards and provide them with tools to make referring new people to you a breeze.
And when you receive a referral, reach out to your referral sources and give them updates during the sales process, so they know you're taking care of those they send your way, even if they don't end up converting.
Stand up for yourself
If something isn’t working for you or the referrals you’re receive aren’t a good fit, you can’t be afraid to stand up for yourself.
You have to be the champion of your business and your time.
If someone is sending you low-quality referrals, reach out, thank them for their referrals and educate them on the type of clients you work with and want, and what type of clients you don’t want. When they have better clarity about what type of referral is good for you, they’ll make better referrals.
If a referral relationship isn’t working out, starts to feel out of alignment with your business practices or reaches a point where integrity is lacking, speak up.
Have a conversation with the referral partner about what is no longer working for you and see if you can reach a mutually beneficial solution — and if not, don’t be afraid to walk away.
Ask for more referrals
If you want more referrals, you need to ask for more referrals.
You have a network of people — family, friends, colleagues, business contacts, social acquaintances, club members, sports team members, industry peers, etc. — many of whom would love to support you and help you by making a referral.
Turning your existing contacts into new referral sources and lead generating machines is easy: All you need to do is ask. Well sort of. What I really should have said, is all you need to do is ask the right way.
The very first step to turning contacts into referral sources and lead generating machines is making sure that you're actually referral-worthy.
What you must understand about referrals is the risk associated with giving a referral. When you make a referral, you're putting your own reputation and brand on the line.
If you refer a friend to a service provider, product, course or program and they have a great experience, it makes you look good and they will be thankful for the referral. If you give a friend a referral and they have a bad experience, it will make you look bad and they'll wonder why you made the referral in the first place.
Likewise, when someone else makes a referral to you or your business, they are putting their reputation and brand on the line. If you deliver a remarkable service, you'll earn more referrals, but if you fail to deliver, you won't get any more referrals.
You need to position yourself as credible, reliable and trustworthy.
Build your brand reputation around integrity, incredible customer service and extraordinary experiences. You want others to believe that if they refer someone they care about to you, you'll take great care of them and make you both look good.
Start with your happy clients and customers
Your happy clients and customer want to refer business to you, but they often don’t know how or if you even need them. Reach out to your clients and customers and share your ideal client profile with them. Ask them if they know anyone who fits that description, who would benefit from working with you or who is looking for the services you offer right now.
The best time to ask for a referral is right after someone has complimented your work or spoken highly of their experience with you and your business.
Thank them for their praise and mention that you have openings for new clients. Then ask if they know of anyone who may be a great fit or who may benefit from the same results they have experienced.
Reach out to strategic contacts
Just as all referral sources are not created equal, not all contacts are created equal.
Make a master list of all of your contacts that includes what they do and who they serve. Review the list and identify people who serve the same target market or ideal client that you do, but offer a different service, product or program.
With your strategic list of potential referral partners in hand, you need to choose the best approach:
- Reach out by email to share a bit about what’s going in in your business, why you’re reaching out to them and how you can help them and their tribe. Invite them to talk by phone or video chat to learn more.
- Send a personalized referral letter via snail mail (like those update letters stuffed in holiday cards, but all about your business) that not only explains what’s new in your business and who your ideal client is, but why they should care and how you can help them. Then invite them to reach out to learn more.
Send a high-quality referral
If you want to start earning referrals from an influencer or big player in your niche, first consider sending them a high-quality, pre-vetted, perfect-fit referral (or two). Here’s why:
- When you deliver strong referrals that convert to paying clients and customers, you’re going to be noticed more quickly.
- When the clients you refer their way end up being awesome clients with enjoyable projects, they’re going to want more of those referrals from you.
- When you help grow their business, they’re going to want to learn more about you so they can return the favor.
Remember, play the long game. Give first, share always and enjoy the rewards.
Become a sought-after solution
If you want clients to recommend you to their network, strangers to refer their friends to you and contacts to deliver quality leads on a regular basis, you need to look at every relationship — from contact to client — as partnerships that are vital to your success.
Treat your referral sources, partnerships and strategic contacts with respect.
Communicate clearly with them about what’s happening in your business, what you offer and who you work with and help them send the best referrals and leads your way. Then do the same for them and watch your business grow.