Ask a Mentor: $$$ for Referrals?

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Compiled and edited by Julie Tereshchuk.

Ask a Mentor

 

 

 

 

 

 

 

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,

LuAnn Glowacz

 

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,

Maura Thomas

 

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,

Julie Wickert

 

Got your own career conundrum you’d like advice on? Talk to us! And be sure to sign up for the WCA mentor program. It’s free to members!

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