Why referrals are the key to your freelance success

Nov 12, 2020

Succeeding in the freelance world can be challenging, but there are many useful tactics and resources to help those who have made the leap.

One of our favorite and most effective tips for all freelancers out there is that referrals are the bread and butter for your growing business. And they cost you nothing.

My biggest clients so far have all come through referrals, and have helped me boost my business’s revenue to six figures.

So, let’s examine how client referrals can breathe life into your freelance business, and what we can do to acquire them.

Client referrals cost nothing!

It costs nothing to ask for a referral except a few moments of your time.  

Not only is this method the most budget-friendly for your small business, but this small gesture packs a mighty punch when it comes to bringing in new business.

Expert Opinion: According to the New York Times, “65% of new business comes from referrals.”  

This is a staggering statistic, and proof that referrals are effective at growing your business.

Customer acquisition costs can really get in the way of business growth, but bringing in clients by way of free referrals can help scale back your marketing overhead costs.

Once you have established a way to harness the customer referral business, it will keep building. You could even choose to eventually establish a reward program for your existing clients for referring new clients!

Good things come to those who ask, so you might as well start thinking of referrals as your new best friend.

Client referrals work on built trust

Trust is one of the most important things between you and your clients.  Building a relationship and doing good work is the most powerful organic marketing there is, and a way to establish this trust.

Expert Opinion: Jennifer Bourn of Bourn Creative reflects: “So many people focus on tricks and gimmicks and marketing tactics to get referrals, and I think they often forget that if you do amazing work, the referrals will come naturally. Great work speaks for itself, and a great experience makes referring new business to you a no-brainer.”

Great work speaks for itself and establishes a foundation of client trust on which you can continue to build.

This doesn’t, of course, mean you can’t ask your clients who have given positive feedback to leave a positive review or refer other customers right away.

But think of trust as a two-way street.  It must be earned before asking a client to trust you enough to stick their neck out by referring to other people or businesses to you, as it is their reputation on the line too.

Client referrals come with higher ease and lower cost of acquisition

Not only do referrals cost less to generate and by less, we mean nothing but according to experts, referred clients were found to have contributed 25% more margins in sales than other customers.

Furthermore, the threshold of work required to acquire and nurture clients who came to you by way of referral is far lower than with clients who know nothing about your business, since that foundation of knowledge and trust is already partially there.

This greatly eases the burden on both parties.

Although it may take a few moments to generate a client-worthy referral pitch, this will cost you far less time overall since you have to spend less time “wooing” your referred clients.

Referred clients also tend to stick around longer.

Don’t believe us yet?

Here are some supporting statistics from other experts:

  1. Deloitte: “Customers referred by other customers have a 37% higher retention rate.”
  2. DCR Strategies: “Referred customers have a 16% higher lifetime value.”
  3. Knowledge@Wharton Business Analyst Journal: “Referred customers are about 18% more likely than other customers to stay.”

The math is simple. Client referrals lead to more referrals, and thus more conversions and higher sales.

Referrals go both ways

Reciprocity has proven to be a very effective business strategy “I scratch your back, you scratch mine.”  This applies to growing referrals for your business as well.

You can start this exchange by following your clients on social media, engaging with and really understanding their business, and then referring others to your clients.

Even LinkedIn should be used for opportunities to network and exchange referrals.

Not only does offering up a referral first establish trust and a great rapport, as we mentioned earlier, it makes customers highly likely to offer you referrals in exchange.

Make it easy for them to give you referrals, as well. Creating a seamless user experience will set both you and your customers up for success.

A unique way to encourage your clients to send you referrals is to build an online course that’s short and completely free that they can use as a “freebie” for their own clients.

If the course is well-designed and offers a lot of value, it’ll make your client look good, but it’ll also give your brand exposure and you can even include a call to action within the content for them to contact you as well, thus increasing your referrals.

Pro tip: Saying thank you makes you more “referrable”

To get referrals, you have to make yourself as “referrable” as possible by taking into account all we have discussed previously, and then taking the time to thank your customers who referred you to others.  

Why?

This helps maintain your connection with clients who took the time to send business your way and will make them more likely to send more customers your way in the future.

A simple thank you goes a long way!

The bottom line is...

If you’re a freelancer looking to expand your business, there’s a good chance you can’t afford NOT to make referrals your go-to marketing strategy.

Think of referrals as your secret weapon on the path to success.

Committing to these concepts and actions for a few years can and will help incentivize your clients and colleagues to spread your good reputation and fantastic services for free, in turn allowing you to build more relationships and expand your business even further.

This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send us your blog post.

Himaan Chatterji

Himaan Chatterji is a B2B freelance content developer and a full-time digital nomad working with SaaS brands around the world to create a web of interconnected long-form actionable resources.