How to set up an agency referral program

How do you set up an agency referral program?

Set it up in five steps, starting with a short list of people and ending with the ask.

1. Pick who you'll ask. Common places to look include clients who are pleased with recent work, past clients who left on good terms, and partners who serve the same kind of business with a different service. Start with a short list of names.
2. Choose the reward. Decide what someone gets when a person they send becomes a client, and whether a referral that doesn't sign earns anything.
3. Write the terms down. Put the reward, when you pay it and what counts as a referral in writing, the same way you'd write down scope, price and due dates for a client.
4. Track every referral. Keep one list with who sent each lead, the date it came in and what happened next. A plain spreadsheet works if it's the one place you look.
5. Ask, then ask again. Send the first ask by email, and repeat it after good news, such as a finished project or a strong month.

A referral program is one lead source among several. For the channels and the four steps, see lead generation for a marketing agency.

Keep reviews separate from referral rewards. A federal rule says a business can't pay people, or hand them some other reward, for reviews that are required to be positive or negative, and it can't write fake reviews or testimonials either. For when to ask clients during onboarding, see How do I onboard new clients so they stay and refer others?.

What rewards do marketing agency referral programs offer?

Common rewards include a thank-you gift, a credit on the referrer's next invoice, a cash payment, or a donation to a cause the referrer picks. Choose one you'd be glad to pay every single time a referral turns into a client.

A few questions help you settle the details:

• Will you reward any introduction, or only one that becomes a paying client?
• Is the reward the same for clients and for partners?
• Is it paid once, or each month the new client stays?
• What happens if two people send the same lead?

The Federal Trade Commission's endorsement Guides (16 CFR Part 255) say what counts as an endorsement. It's a message that promotes a product when people are likely to think it shows the views or experience of someone other than the advertiser. For the Guides, a "product" can be a service or a company. They also say some links between the person giving the endorsement and the seller have to be disclosed in a clear and conspicuous way. That's when the audience wouldn't reasonably expect the link, and it could materially change how much they trust the message. Money, free products or a chance to win a prize can count as that kind of link.

One example in the Guides is about social media, so it isn't a referral program. People earn points for posts about a brand and trade the points for prizes, and the Guides call for disclosing those rewards. The Guides add that whether an endorsement is deceptive comes down to the particular facts of each ad.

How do you ask for referrals in an email?

Keep the email short and personal, and make the next step easy: thank the person, say who you'd like to help, name the reward and explain how to make the introduction.

A good referral email has these parts:

• A clear subject line that says you're asking for an introduction.
• One line of thanks for something specific you did together.
• Who you're looking for, in one sentence, so they can picture a name.
• The reward and its terms, in plain words, with a link or note to the written terms.
• How to introduce someone, such as replying with a name or copying the person on an email.

Send it to one person at a time when you can. If you send the ask to a whole list, check one more thing first. Follow the email rules where you and your readers live.

If the asks go out and the names still come slowly, it helps to have a second plan ready. For a plan for a slow month, see getting leads when referrals slow down.

We don't give legal or tax advice, so check your own case with a lawyer or an accountant.