Compiled and edited by Julie Tereshchuk.
Dear Mentors,
I am fairly new to freelancing, and I wonder about the etiquette of making referrals.
If someone sends some work from a third party my way, is it usual to pay a referral fee? Or is a token gift card, or even just a thank you note, OK?
Someone just sent me a gift card because I linked her to a new client. Have I been making a mistake by not sending $$$ with my thank you notes?
Yours, Concerned
Dear Concerned,
There’s no hard-and-fast rule on referral etiquette.
If someone expects a formal referral fee, they will tell you. Oftentimes it’s some sort of formula, like 10% of the first invoice payment (that way you’re not obligated to pay a referral fee if it doesn’t work out and it’s scalable so you’re not paying, say, $200 for a project that is only paying you a total of $500).
If a referral fee isn’t mentioned by the referrer, then assume it’s not expected and you don’t need to bring it up.
However, if the new client relationship is a success–particularly if it turns into an ideal project or ongoing business–it is a terrific idea to share the wealth with a thank you and gift card. Aside from it simply being good for the soul to show generosity, it makes the referrer feel good about sending business your way. If you’re a social person (and the referrer is, too), then treat them to coffee or lunch as a thank you for keeping you in mind.
If the referred business isn’t a good match, it’s also a good idea to follow up with the referrer with a heartfelt thank you note, email or call and an explanation as to why it didn’t work out so they can get a better idea of the type of work you really are looking for.
I’ve never met a freelancer who is successful without referrals. Practicing gratitude, even in small ways, can keep the work flowing.
Yours,
Dear Concerned,
A handwritten thank you note is a necessity regardless of the situation. Whether to include compensation or other gift depends on your relationship with the referrer, and whether or not the referral results in work.
If it’s a competitor, a referral fee is a nice token of appreciation. Create a policy where you offer the same thing every time. 10-20% of the initial job is reasonable. If you don’t get the work, a handwritten thank you note is still a must and a small gift card is a nice token for creating relationships in your industry.
If the referral is from a friend, colleague, or client, a gift certificate is usually more appropriate than a check, and the size still depends on the size of the work. I once had a friend make a referral that resulted in tens of thousands of dollars in business for me. I sent her a $500 spa gift certificate. Another friend sent me a referral to a smaller client, and I sent him a $50 gift card to Starbucks.
If the referral doesn’t result in work, just a thank you note or a note with a small gift card, like enough for a cup of coffee ($5), is a nice token. Also consider very nice thank you notes that make a statement. I buy handmade cards that I often see on people’s desks long after I’ve sent them, just because they are so pretty. These cost a few dollars each and in that case, a note is enough if the referral doesn’t turn into work, but a small token of appreciation never hurts. You could also have nice note cards designed and printed that include your brand, but don’t skimp here! Get a great design and print on high-quality card stock, or something unique like seeded paper.
Also be mindful that some people cannot accept gifts in exchange for a referral because it violates ethics rules or norms. In this case, a donation in their name to a charity they work with is a great option, and it’s worth a little research (like on LinkedIn, or via a mutual friend) to try to find a charity that is meaningful to them.
Yours,
Dear Concerned,
Referrals are golden – if you get enough of them, you barely have to market your freelance services. And recommending you for work is definitely behavior you want to encourage! A heartfelt thank you is essential.
As someone who’s made many referrals, I’ve received a range of expressions of gratitude. At the lowest end of the spectrum has been no acknowledgement of the referral – and this cooled my enthusiasm for referring the business owner, sorry to say. At the highest has been a good-sized gift certificate for meal delivery, which was completely over-the-top – but memorable.
Honestly, a thank you note is sufficient. While a handwritten note is nicer than email, email is far better than nothing. One other thought – as a freelancer myself, I’ve taken referral sources out for cocktails. It’s been a nice opportunity to deepen the connection.
Yours,
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