The Complete Guide to Building a Referral Program for Your Agency

Referrals are essentially word-of-mouth recommendations which have been the strongest marketing strategy since the beginning of time. They’ve just become a little modernized, and word-of-mouth has taken the form of referrals. 

Speaking of referrals, 92% of brands trust a recommendation from a peer. Don’t you want this 92% of brands to check out your agency?

In my experience, referrals are the strongest way for agencies to land new clients. I have my hypothesis: To grasp the power of referrals, consider your own purchasing behavior. Do you trust a sales ad, or do you prefer that a peer recommends a business from their own experience? Translate this into internet conversations, and you’ll see things like brand ambassadors, influencers, everyday consumers, and advocates impacting the modern-day consumer’s purchase behavior.

So every agency owner’s question is not “Do I need referrals?” Rather, “How can I get more referrals?” And that’s where this post comes in, so let’s start exploring how to set up your own referral program.

Why Agencies Should Lean on Referrals

Referrals offer the social proof your target clients crave. A referral program is also a cost-effective way to get leads and clients for your agency. 

A referral program doesn’t require a lot of upkeep to keep it going. Spending 1 hour per day on your referral program can do wonders for your agency.

With 84% of B2B buyers reporting that they rely on referrals to make purchase decisions, no wonder it’s the most effective way to land new clients. Not to mention, PPC and social media ads just aren’t cutting it. But not to fret, referrals are effective AND easy on the budget…

The proof is easy to find. Referrals work. You probably heard that the agency that works with Dropbox got 4 million new users on the platform in just 15 months.

What a Strong Referral Program Entails for Agencies

The first thing to note is that you’re not going to send out a mass email and hope for good results. That’s lazy.

Your referral program will look like any of your other marketing strategies. It needs to be well thought out, you need a plan, a roadmap is a must, KPIs should be considered, and your budget needs to be determined.

Is My Agency “Referrable?” 

This is a question I get a lot, and I can answer it easily. Your agency is absolutely referrable as long as you do fantastic work for your clients. Happy clients often feel moved to recommend agencies to colleagues. Remember, happy clients usually need a little nudge, but it’s worth the time and incentive, which I’ll explore in a bit.

What I love about a referral plan is that it allows me to focus on doing great work for my clients. If you’ve not picked up on it yet, this is a strategy that doesn’t suck as much time as other strategies to land new clients. If you think about it, once your program is set up, it can be on auto-pilot and your happy clients will actually be doing the work for you when it comes to new leads and clients. Needless to say, you need to be referrable to implement this effective growth tactic.

All of that is to say, do good work, send out invitations to your well-thought-out referral program, and let your happy clients speak for you. It works like a well-oiled machine as long as you deliver awesome client work.

Identifying Potential Referral Worthy Clients

Even the top agencies have clients who only feel mediocre about their results. Of course, you don’t want to ask those clients for referrals, so it’s important to identify which clients are happy and segment them in your marketing automation platform.

When seeking out happy clients, look for an influx of sales, contract renewals, and satisfaction.

It’s wise to partner with client-facing employees to get a pulse on your happy clients. Involve client services in this strategy as much as you can because they’re on the front line.

You can also send out surveys to all of your clients about their experience with your agency and identify clients to act as your partners for your referral program. Social listening is another option to identify the happiest of clients.

Referral Incentives 

Sometimes asking a client if they’ll refer your agency is a little awkward. That’s why having a referral program in place with incentives takes the awkwardness out of this strategy.

When you offer something in return for referrals, it feels like both parties are winning.

To bring my point home, I’ll simply share how I go about referrals. I offer a $100 gift card if my clients refer someone and they do a call with me. I offer a $500 gift card if my clients refer someone and they come on board for my services. 

It’s well worth the cost as referrals convert faster than any other strategy. Not to mention, haven’t PPC and social media ads kind of run their course?

5 Unique Strategies to Land More Referrals for Your Agency

• Partner with agencies or businesses that have the same target client as your agency but offers services that complement yours, they’re not a competitor. You can agree with such partners that if one of their clients needs your service, they’ll recommend you and vice versa. Let’s say you are an SEO agency to make it not so confusing. You can partner with an agency offering social media marketing as they are not competitors.

• Make it easy for your clients to refer their connections to your agency. Sometimes clients don’t understand the depth of what you offer, so it’s fine to give them talking points. And be transparent about your target customers. This all shows that you respect your client's time, and by making it as easy as possible, the referrals will be flying in.

• We tackled that you need to incentivize your happy clients. But you don’t always have to do gift cards. To make your referral program even more cost-effective, you can offer something free, like an audit if one of your clients brings new business to your agency. 

• Once your referral program is planned and documented, you can set triggers on when to contact clients for referrals. Stray away from campaign mentality; this should be an ongoing effort. When clients have been working with you long enough to gather data and deem you powerful, they get the email to become part of your referral program. If you ask too early, it may be uncomfortable for your client to recommend your agency since they’ve not seen all the results yet.

• Gameify your referral program. Build a landing page that your clients can send their colleagues to that explains what you have to offer. Gamification comes into play (pun intended) when you can track the traffic to your landing page. A little competition is healthy, so challenge the members of your referral program so that whoever sends the most traffic to your landing page gets a large prize. Fun and still more cost-effective than those silly social ads that I’m sure you’ve ditched by now.

Final Thoughts: Start Your Referral Program at Your Agency Today

I read that only 30% of agencies have a documented referral program in place. From what I’ve noticed, most agencies take advantage of referrals to some degree; they’re just not being entirely strategic with the strategy.

Key takeaways for your referral program to be successful include segmenting your happiest clients, offering incentives, asking at the right time, and building a community to get a healthy amount of new referrals.

Don’t be tempted to half-ass this strategy; referrals are more effective and easier on the budget than traditional strategies like PPC and ads. Treat your referral program like your other promotional strategies and attack it with a plan and KPIs.

If you’re spread a little thin like most agency owners, I built The Campfire Circle to grow and support agencies. One of the many services I offer is setting up, optimizing, and executing referral programs. You can contact me here to discuss.

About which percent of your clients came from a referral? I’d love to read all about your insights in the comments below!