Using Referrals to Grow Your Creative Business
Harnessing the power of referrals has been one of the best converting marketing strategies I’ve used in my design business.
It’s been WAY more powerful than social media marketing (yes I said it!), and way more successful than any kind of in-person networking or advertising I’ve ever tried to do as well.
Last I’d say that around 60% of my website design clients came to me through referral schemes I have with other businesses, accounting for a huge portion of my annual income.
What do I mean by a ‘referral scheme/strategy’?
When I’m talking about referrals, I don’t just mean ‘word-of-mouth referrals’ from previous clients or people I know. I get these too, and while yes - it’s hugely important to deliver a great service so that clients are encouraged to recommend you to their peers, I don’t have any control over this.
What I’m talking about is a strategic referral arrangement between myself and another business owner that offers a complimentary service to what I do. For example, some businesses that I have worked with on a referral scheme include:
SEO consultants
Business coaches
Brand consultants
Other brand designers
Digital agencies
Copywriters
Can you see how these services are complimentary to what I do, which is website design? It’s highly likely that a Brand Consultant's clients might need a website, so that person will refer them to me for that service. It’s also likely that my website design clients might need additional SEO help, so I will refer those clients onto my SEO consultant.
It’s pretty common to do this naturally when you have contacts and know a good network of skilled people and other businesses, and maybe you already do this. A client asks for a recommendation for someone, and you send them in the right direction of someone you know.
This is great, but usually work like this will be unpredictable, and the likelihood is that you or the other business will forget sometimes or won’t be motivated to upsell or promote each other.
This is where a ‘referral arrangement’ comes in. A formal agreement between you and the other business that each will receive a referral fee each time a client is passed on - like a commission or ‘finders fee’. This could be a written agreement via email or you might wish to have a contract (which is what I do).
Why have an agreement?
Like I said, it’s likely that you’re probably already recommending clients to people, and people are probably already recommending to you, but having an agreement like this means that you are both more motivated to promote each other, as both people are benefitting from it.
It’s a great way to make a bit of ‘passive income’ too when you’re the referrer, as you essentially get a bit of cash (your % fee) for doing nothing! It really is a win/win and a great way to get more of your ideal clients if you’re doing this with the right people too.
What should be included in a referral agreement?
A referral agreement can really include anything you like! But below are some key points that I include in mine:
When the referral agreement will start & end
The % fee the referrer will receive in exchange for referring the client
What amount will be used to calculate the % fee (eg. the client’s first payment, or maybe the total spent by the client over a 6 month period)
When the % fee will be paid to the referrer (eg. once the client has paid the agreed amount in full - this is important when working on projects where client payments are split or made in payment plans, or maybe within 30 days of when the client has paid)
How the % fee will be paid to the referrer (eg. in credit for services with you, or via bank transfer)
How the referee will alert the referrer that a client has successfully been referred
Whether the referral agreement is exclusive or not
Any terms or rules the referrer should adhere to when promoting/recommending your business to a client. I have a clause in my contract that says they must not make any false promises etc.
How and when notice should be given if either party wishes to terminate the agreement
+ You may choose to also give the client some kind of referral benefit as part of the agreement. Perhaps give them something for free or some kind of special discount. I’ve personally chosen not to do this, as I want clients to choose me because they want to work with me, not just because of a good deal.
+ Remember, if you want to send referrals to a business to receive a fee AND have that business send you referrals, you will both need to fill in TWO contracts. One as the ‘referrer’ and one as the ‘referee’ each.
+ If you are writing up a contract, there are lots of helpful resources and templates for ‘referral agreement’ online. I am not a lawyer and this is only basic advice; for a thorough, legally binding contract the best thing to do would be to have one written up by a law professional.
How do I get started with a referral strategy?
Step 1
Write a list of all the types of businesses that offer complimentary services to yours who could work with you on a referral scheme. For example if you are a Wedding Boutique, perhaps your list would include Event caterers, wedding planners, wedding prop hire companies etc.
Step 2
If you don’t know people at these businesses already, do some research in your local area. It doesn’t have to be local (many of the businesses I collaborate with are based across the UK), but it’s a good place to start and I always think it’s nice to support local business owners.
As you do your research, connect/follow with those businesses/people on their blog or social media. Below are some questions to ask as you look around:
Is the quality of their work and their outwards marketing something you’d want your business associated with?
Is their style a good fit for your clients?
What are their prices like? Would this fit in with the budget of your clients?
Do they have plenty of testimonials or case studies to prove they have happy clients? (Don’t just look at their website; look on Facebook reviews or their Google Business page too).
Are they visibly promoting or recommending businesses similar to yours? If so, you may not want to step on the toes of an existing referral relationship!
Step 3
Once you have a list of contact details for businesses that tick all of your boxes, reach out and connect with them in a natural way. Start creating a relationship with them, rather than going in straight away with your referral idea.
This whole process is actually a great way of networking and connecting with your peers and other business people, and even making friends! There are a few people I do referrals with that I chat to regularly, sharing work or client stories. It’s just nice to chat with people in your industry sometimes.
Step 4
Once you feel comfortable and it feels natural, mention your referral idea and check if they’d be interested in seeing an agreement or if it would suit them. It won’t be for everyone and that’s okay. If you love that person’s work then by all means you can still recommend to them without a % fee or a contract, but if they say yes, you’re entering a mutually beneficial, motivating relationship that could seriously help grow your business!
