Today we are talking about something that may be top of mind for a lot of agency owners given the current economy, referrals.
In the final years running my agency, we did no outbound, referrals drove our whole business. I’ll lay out what we learned along the way to building our agency running on referral autopilot.
Why referrals are so important ‼️
Referrals are like gold for two main reasons:
- Your best clients will probably know others who need similar services. This means they are highly qualified leads for your agency.
- You are being introduced to them via a friend and have the benefit of trust right away.
When is the best time to ask for a referral? ⏰
We tested asking for referrals at a few different points in time during our relationship with a client. About a third of the way through a project, after the first phase of a project, and at the end of our larger contracts.
We landed on asking after each successful completion of a contract. For some of our clients, that meant we asked multiple times. Not once did we feel like we were asking too much. Most agencies fall in the camp of not asking enough.
The right way to ask for referrals 💬
This involves stepping slightly outside of the normal comfort zone.
- Ask for the referral
- You’re gonna get a no, or “I’ll get back to you”. Here comes the slightly uncomfortable part, you need to ask one more time, right there.
- Give them an email template so they can just copy and paste, or send them a forwardable email. The goal is to reduce friction.
I learned a lot from Steli Efti's article on this. I took what he laid out for SaaS companies and translated it for agencies.
What to do after you close the referral 🤝
All has gone well and you’ve closed your client referral, now what? Each agency is different and I’ve heard different methods from here. Some pay the client a finder’s fee (usually around the 5%-10% area), some credit services to the original client.
Some don’t pay the fee at all, but provide a gift.
Regardless of what money or services changes hands, make sure that your original client knows that the referral has been made. This will make the client feel good and potentially inspire them to give more referrals in the future.