referral networks

For the last couple of years, I’ve been in the fortunate position to be able to refer work on to other freelancers. Sometimes, it’s because I’m fully booked, sometimes it’s an area of freelancing I have little or no skills or experience in (for example, I’ve referred my copywriting clients to freelance graphic designers or web designers I know). I tend to refer freelancers for free. In honesty, it hadn’t occurred to me that you could charge for such a thing. But late last year, I started to hear about referral networks. These are networkers of freelancers who refer work to each other, and take a small commission from the freelancer in question if the referral is successful (usually a fixed fee or 10% of their first invoice once they’re paid).  Although there are more formal groups that do this (often groups that you have to pay to join), this tends to be more of a relaxed, friendly arrangement.

But….why?

That’s what I thought. ‘Why would you charge?’. But on discussing further with a couple of freelance friends, I could see the advantages. Referring someone takes time, and as we all know as freelancers – time is money. It takes the time to reach out to check availability and the time to write an email connecting them. I often check in with the freelancer to see how things are going too, and chat about any problems they might be having. Additionally, there’s a certain amount of reputation on the line there, that referral represents you, so a referral fee could ensure they do a good job (although, arguably, you wouldn’t refer them if you had doubts about the quality of their work). In theory, it’s a win for you, the client and the freelancer you’ve referred.

What does the referred freelancer get out of it?

Work with that client, hopefully. Sure, they may have to pay a small fee, but isn’t that worth it for the overall work, especially if it’s ongoing or leads to more? It’s not an ideal solution though. The client may becomes difficult, leading to some resentment on the freelancer’s part. From the referrer’s point of view, there needs to be a degree of trust that the referred freelancer will pay up or be honest.

One other thing to mention – referring work to other freelancers doesn’t always guarantee you’ll get it back. For example, I have in the past referred work to less experienced freelancers who may charge slightly less, fitting in with the client’s budget and needs (as long as the budget is acceptable – I never refer if the work or budget is ridiculous). But I know that work is unlikely to be referred back from them (as those freelancers quite rightly can do the work themselves).

Of course, this isn’t an entirely new approach. Affiliate schemes have allowed people to send a customer over, in exchange for an affiliate fee. In fact, I already offer affiliate links to a few courses my friends run or products they sell. Most freelancers have freelance friends in lots of pockets of the internet, so they’re able to offer clients a network of freelancers and recommendation they wouldn’t ordinarily have had access to. So a referral network can be hugely valuable to you.

I’m still undecided about referral networks. But I’d love to know what YOU think! Comment below to let me know what you think about referral charges. Have you tried them before? Would you use them?

3 comments on “Referral networks – would you charge to refer?”

  1. I’ve been on both sides of this. I’ve recently been working on a project where I was referred the work based on a referral fee. Initially I was a bit hesitant but it turned out to be an amazing client, was great experience, looks great on my portfolio and the person who referred me is a real expert in his field so it was flattering he referred me because even though I paid him 10% of the project fee – I know he has a reputation to manage and wouldn’t have referred me if he didn’t think I was up to the job. So I certainly don’t regret it.

    From the other side, I often refer work to other people but haven’t ever charged a referral fee. I have a lot of AMAZING freelancer friends who I would happily refer work to free of charge because I know they will refer work back to me at some point or if they don’t they are genuinely my friends and will repay in other ways (advice etc). This reciprocal back scratching has also worked well – for example I referred a graphic design agency for a big project that I was also working on for the client and then they came straight to me the next time they needed a copywriter. Both projects went really well, we know we work well together and I still freely recommend them to people because they are fantastic – I just always make sure to tell my clients (or non clients) to mention I referred them.

    However, I’ve also had several instances of referring work to people for free where it hasn’t been so successful. The main one being that people are a little ungrateful and it’s definitely felt like a one way street. It’s just manners dammit – if someone referred me work, even if it was total crap I’d still be really thankful and lovely! Like you said Emma, this is mainly people who are junior so probably aren’t likely to refer me work back – but you never know, they might have something they can’t tackle – but really I’d just like them to actually give more of a shit! So for these people I think I definitely would start charging a referral fee. After all, you’ve put the effort into your business to grow it, get a great reputation etc and if you are getting in lots of work but don’t want to grow your business (like myself) then it seems like a good solution.

  2. I refer enquiries on all the time, sometimes I receive a nice bunch of flowers, always appreciation and help in return when appropriate later, for one firm we will be doing a referral fee as I refer so many people to them (they’re specialists and very good).

    I think it’s good to do it on a case by case basis and by what feels right. Most important is to only refer because it is a good fit for both client and freelancer, not because of the money (which is what happens sometimes).

    I see affiliate as a bit different, but similar and something that needs to be disclosed, more for transparency and trust with your audience than anything else.

    PS. That’s Emma’s affiliate link up there on the right to my Tax Return Toolkit. It would be marvellous if you checked it out 🙂

  3. I think it is good to get a referral fee, if a person who you refer decides to take on business with the recommended person. From the perspective of the person receiving the job; they are getting a new client who may lead to further work. From the perspective of the customer, they are being referred to someone who you “trust” in your network. It seems fair, especially from the perspective of being a freelancer and having to either farm existing customers, or go out there to get customers to receive a commission. We are business people, freelancers.

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