Are you too reliant on referrals?

As a digital agency owner, designer, marketer or freelancer – you’re likely no stranger to referrals. For many businesses, referrals become the lifeblood of their marketing efforts.

Referrals are an easy first step into marketing. Do a great job, and hopefully someone will refer you to someone that they know. Now you have a new lead that you can talk to and potentially do business with.

But can you become too reliant on referrals? Are you putting all of your eggs into one basket?

Let’s have a chat about that…

Referrals are great

It’s an awesome feeling to get an email or phone introduction to a new lead. Not just any lead. They’ve been referred to you by a happy customer. Someone who loved what you did for them so much that they’ve recommended you to someone else.

People buy from those they know, like and trust. When a potential customer is referred to you with a glowing recommendation, they already have at least part of that “know, like and trust” in place.

This is quite unlike traditional marketing where you need to first attract and engage the attention of someone who is in a position to be looking for your services. Having a new lead who is pre-sold on the quality that you can provide is great.

Of course, not every referral is going to be a great fit for your business. Sometimes people won’t have a budget or idea that aligns with your core values. That’s okay though. It’s easy enough to pass them onto someone who will be a better fit for their needs.

But how great is it for you to be able to get potential new clients just because you’ve done a fantastic job for someone else?

It can be hard work to get referrals

There is no guarantee that a client will refer you to others. You could do the best work that you’ve ever done, completely crush the project brief for a home run, but the referral batphone doesn’t ring.

It sucks when a client doesn’t provide a referral, but this isn’t a reflection on the quality of work that you provide. Not everyone is predisposed to providing referrals.

So how can you get more referrals?

Sure, you could just work with a billion more clients. That’ll get you more referrals eventually right? Plus a dramatic increase in your stress levels and an evaporation of any time that you have left.

Let’s do something less stressful and more impactful. Instead of choosing to work with everyone in the world, you could instead focus on creating a better off-boarding experience for your clients.

When we talk off-boarding, we’re referring to the process that occurs at the end of a project. That time when a new website goes live or a project completes and you hand it over to your client.

Some digital agency owners will stop at this point, handing over the keys and leaving their clients to it. Some may offer a care plan for a completed website, which is a great opportunity for you to provide an on-going relationship with your clients.

As part of your off-boarding process, you need to make it as easy as possible for your clients to leave you a review or testimonial. Tell them exactly how they can do this and point them to relevant online properties such as Google My Business, TrustPilot, etc.

You can also let them know how they can refer you to others. Perhaps you might want to put together some content that talks about ideal clients for you to work with and give them some ideas on how they could introduce you. Subtlety is key here – it’s not about bopping someone over the head and shouting “give me referrals”.

Ultimately, you should always be leading with value. Everything that you do for your clients is about delivering the best possible experience and creating exactly what they need for their business.

When you provide a great service, show that you care and lead with value, you will get more referrals.

Referrals have their limits

Just like everything in life, referrals can have their limits. Every happy client that you work with can’t refer you to everyone they know.

Realistically, if a client can refer you to 2-3 people that they know then that would be considered an excellent result.

Yes, there are some people who read this post and will say “but Matt, I have had 20+ referrals from one client”. Firstly, that’s awesome and you’ve done incredibly well. Secondly, that’s not normal and you’d be really smart not to pretend that it is.

In the 1990s, the British anthropologist Robin Dunbar came up with his theory ‘Dunbar’s number’. The basic principle of this is that humans can only comfortably maintain 150 stable relationships. Dunbar suggests that we are limited by brain size, attention span and the amount of time required to nurture close friendships.

If we assume that your clients fit this same principle, then the maximum possible number of referrals they could give amongst their friends would be 150. When you consider further how many of those 150 friends run a business and need your services, then you can see just how small the number of referrals could be.

Of course there are referrals that can come outside of close friends such as casual acquaintances or colleagues. However it’s worth remembering how referrals work and that the best referrals are between two parties who know each other well. The same ‘know, like and trust’ that we talked about earlier.

Referrals are a numbers game. Sometimes it will work heavily in your favour, but many times it won’t. It’s important to bear in mind the limitations of human relationships and how these can affect the number of referrals that you can receive.

What about your other marketing activities?

This is the point where the majority of digital agency owners start to shuffle uncomfortably on their feet. As I’m writing this to you, I can feel the collective power of mouse cursors heading up to the tab in your browser. If you close the tab, it doesn’t matter right?

I owned and ran a digital agency between 2006 – 2020. We also have almost 800 customers of Funnel Packs and they’ve regularly shared their own business struggles with us. I get it I really do.

When you’re running a digital agency, your primary focus is on completing projects for your clients. This is what pays your bills. Every time you complete a project, more money goes into your bank account. That’s how you put food on your table and keep a roof over your head.

Spending time on your own business and carrying out marketing work doesn’t deliver the same financial benefits. You don’t get paid for working on your on-page SEO or setting up a Facebook Ads campaign for your agency.

One of the scariest things that I see for agencies is when someone is only relying on one source of leads for their business.

Time and time again there are threads in Facebook groups where people talk about how they get clients. ‘Referrals’ is nearly always one of the most common answers. For some of the people answering, they’re completely reliant on those referrals.

It’s a dangerous game to play. Keeping all of your eggs in one basket leaves you just one step from disaster.

As a responsible agency owner, you must ensure that you have multiple methods of lead generation in place for your business. This protects you, your family, your employees and their families.

It’s something that Mel and I passionately talk about with our customers through our customer Facebook group, emails and much of the content that we create.

If you take nothing else away from this post, promise me that you’ll schedule at least a little time to look after your own business. This could be half a day each week, where you work solely on marketing activities for your agency.

Your business is just as important as the work that you do for your clients, if not more important.

Uh-oh the referrals have stopped coming in

The sound of silence can be wonderful when you want peace and relaxation. Unfortunately it doesn’t have the same effect when you’re looking for new clients.

When your new clients predominantly come from referrals, the worst possible thing that could happen to you is to suddenly reach a point where no new referrals are being received.

This is an experience that almost every digital agency owner will have at least once. It’s terrifying and can easily lead to disaster for agencies who are already in a bad situation.

So what realistically happens when your leads dry up?

You’d likely be in a situation of panic. There’s an urgent need to bring in new business, to ensure that you can pay your bills and keep on moving forward.

With urgency comes a lowering of standards. Ordinarily, you’ll do everything you can to avoid ‘red flag’ clients and to say “no” to them. But when you need work, it’s harder to say no, even to projects that aren’t a great fit.

As you can imagine, working with clients that aren’t right for your business is going to bring additional stress and frustration. Something that many business owners can ill afford to suffer from, especially given the situation that we’re all experiencing this year already.

If this doesn’t sound like fun to you… and it really shouldn’t unless you’re a masochist… then you need to make sure that you have more than one source of leads for your business.

Secure your business with multiple sources of leads

Okay, so I think we can agree that referrals are great for bringing in new business, but that they shouldn’t be something you solely rely on.

It’s time to make sure that you have a steady supply of leads from multiple resources AND to focus on your recurring income. Let’s talk about these a little more.

Firstly, here’s some lead generation sources to consider:

  • Content marketing – Creating content for your business in the form of blog posts is an excellent medium / long term strategy. When your target audience has a problem and they’re searching for help, you want your blog posts to be visible to them in the search engines.
  • SEO – Your website needs to be visible in the search engines. Just like your clients, you can’t expect people to magically find your business if you have zero visibility. If you’re someone that works with local clients, make sure you have your Google My Business (GMB) profile set up and optimised.
  • PPC – Paid ads give you a wonderful ability to be in front of your target audience almost immediately. You can create ads that bring traffic to specific parts of your website, even setting up intricate layers of ads to really filter through only the most engaged visitors.
  • Marketing funnels – I might be slightly biased here, but I believe having a great marketing funnel to be one of the best options for any business owner. It allows you to lead with value, delivering great content to your leads and setting up an opportunity for a sales conversation.
  • Podcast – This option might not be for everyone, but it’s a great opportunity for you to establish your authority. Creating a podcast is an ideal option for someone who works in a specific niche. Let’s say you work with beauty salons – you could quite easily have the #1 podcast on websites and marketing for beauty salons.
  • Write a book – Again this is another authority piece. You’re very unlikely to make a fortune from writing a book. Unfortunately that’s a difficult nut to crack. Instead, it’s about gaining authority. What better way to prove your expertise to a new lead or client, than to give them a copy of your book?
  • Webinars – Virtual events are pretty popular this year aren’t they? I know… it can seem a bit overdone. But running webinars for your clients and prospective clients is a fantastic opportunity for you. These can be both free and paid, offering knowledge and new skills to your target audience.
  • Chamber of commerce – Working with your local chamber of commerce can open up opportunities to run events with them. Kyle Van Deusen, one of our Funnel Packs customers, has had quite a bit of success running presentations alongside his local chamber of commerce. As an example, one of his presentations was to help local business owners understand how to get more out of their social media presence.
  • Business networking – Finally, there are still options for you to utilise business networking groups. You know those ones where they imagine that every normal person wants to meet for breakfast at 6am. They’re not my cup of tea, but they can be great if it’s the type of vibe that works for you.

Fun fact: You can combine a few of the above options to make some really efficient and successful lead generation strategies. For example, using content marketing with a call to action that leads into a marketing funnel. Driving traffic to your blog content would be the first step, and you could do this via SEO and PPC.

Next, let’s talk about your recurring revenue. 

At the very least, your recurring revenue should meet your fixed business costs each month. Ideally this will include all of your monthly expenditure plus salaries.

It’s a simple goal, but offers a ton of freedom to you from a physical and mental health perspective. Knowing that your recurring revenue is going to cover your expenses gives you some breathing room.

One of the main options for recurring revenue with a digital agency is through the sale of Care Plans. These are maintenance plans where you’re looking after your clients’ websites on a monthly basis.

A Care Plan is an easy up-sell for most of your clients. It’s something that offers them peace of mind. They know that you’ll look after their website and they can focus their attention on growing and running their own businesses.

What about other sources of recurring income?

You could consider:

  • Marketing services – There are many options for marketing services that you can provide on an on-going basis to your clients. These could be SEO services, PPC services, marketing funnels, email marketing services, social media marketing services and more.
  • Content creation – If you enjoy creating content, then you have opportunities to create content for your clients. This could be in the form of blog posts, social media content or perhaps graphic design.
  • Consultancy – Sometimes your clients just don’t know what they want and they need your help on a consultancy level. This gives you an opportunity to provide and advise on a spectrum of different services.
  • Productised services – Packaging up and productising your services is a popular option with digital agencies. Care Plans are a good example of these, but there are many more options you could consider too. Perhaps there’s a productised email service that you could offer specifically to E-Commerce businesses, as just one example.

Let’s talk marketing funnels

I could happily sit here and write for hours about each of the topics above, but let’s focus on marketing funnels for the moment. It’s what Mel and I do here after all.

A marketing funnel gives you control over your lead generation. It’s something that you can set up for your business and use to generate leads over and over.

What exactly is a marketing funnel though? In simple terms it’s a method for you to build trust with your visitors on a step-by-step basis. It’s something that we’ve done as human beings for thousands of years, but we’re applying the same principles in the digital space.

The step-by-step approach means that only the most engaged and interested visitors will continue at each step. So you’re creating conversations with people who actually want to hear more about what it is that you offer.

There’s no point in wasting your time on someone who isn’t interested in what it is that you have to say.

The best part is that all of this works through automation. Once you’ve set it up, you don’t need to have manual contact points. Your marketing funnel takes your visitors through the step-by-step process automatically.

What makes up a marketing funnel?

Firstly, you need something that is exciting to your prospective leads. This is a compelling offer that they’re signing up for in exchange for their name and email address.

We typically will refer to this as a lead magnet. They come in many formats with common examples being a PDF ebook, checklist or a quick start guide.

It’s important to note that you’re not just making a lead magnet for the sake of it here. You should be thinking about the problems that your target audience suffers from. 

For example, maybe you’re the best in the world at speeding up WordPress websites. If the common problem of your audience is a slow website, then you’ll create a lead magnet and an offer around the pain point of suffering with a slow website.

You’re leading with value by creating useful and engaging content that helps your audience. This is something that you’ll be doing throughout the marketing funnel process.

Your compelling offer will be positioned on a landing page. This is normally a one page design that positions your offer and explains to your potential lead how it will help them with their problem.

The landing page doesn’t need a fancy design. You can be fancy if you like, but that’s not what usually sells the compelling offer to someone. All they need is to know that they’re in the right place to receive help with their problem.

Your landing page should have some social proof on the page. So things like testimonials, accreditations and case studies. Show potential leads that you are able to help them and that you have happy customers that you’ve helped previously.

From your landing page, the lead would then choose to opt-in. This will be through a form where they can enter their name and email address. Once they fill this in, it connects with your email provider, firing over the data.

At this point, they’ll then be taken to a thank you page. On the thank you page you explain to your new leads exactly what will happen next. Usually this would be a message to let them know to check their emails in a few minutes, where they can access the free offer that you’ve created. In addition, you could include some additional social proof and even link to blog posts that are relevant, as your lead is hyper engaged at this point.

It’s smart not to put a download directly on the thank you page. This will help you to avoid junk leads from people who are putting in fake details just to get access to your free content.

The next step in the process is the welcome email that will have been automatically sent out to your new lead. In this email you’ve included a link to your lead magnet, checklist, quick start guide, etc.

After this, you’ll send out a series of nurture emails. These provide additional information and content for your leads. It’s a great idea to include some quick wins here, as well as in your lead magnet. This allows your leads to get some immediate value and positions you clearly as an expert who is ready and able to help them.

As I mentioned above, it’s really all about delivering value. Continuing to deliver value and share your expertise is building trust and nurturing the relationship between you and your new lead.

At the end of your marketing funnel you’ll have a call to action or a sales email. This is where you’re going to start to position your offer and begin a sales conversation. 

That is a marketing funnel in a nutshell.

Allow me to introduce Funnel Packs

Mel and I run Funnel Packs. If you’re not sure what these are, glance up at the logo. Hi! You’re on our website reading this article right now.

A Funnel Pack is a pre-built marketing funnel that you can set up in your business in less than an hour. In fact, we have a couple of customers who both claim the “world record” for setting them one up in around 25 minutes or so. Shout out to Kyle and Lorraine for that.

We created Funnel Packs to help digital agencies, designers and marketers just like you. They’re built to generate leads for your business and most importantly to save you time.

Time is the most precious resource in the world. It’s something that none of us have enough of.

As we’ve already established, you’re most likely to be spending your time delivering client projects and not on marketing your business.

Yes you could create a brand new marketing funnel for your business. Realistically you’d be looking at somewhere between 10 – 40 hours, depending on the level of complexity and your current skill set.

Our purpose with Funnel Packs was to avoid the overwhelm when it comes to marketing your business. We wanted to create a product that you could set up in your agency in an hour.

So a Funnel Pack is ready to be set up in your agency. You can take some time to customise the content to suit your brand, offer and audience. It’s a great idea to season to taste, and we’ve given you the building blocks to be able to do that.

Mel and I are passionate about giving our customers the gift of more time. Using a Funnel Pack will save you time in your business. You can take this gift and use it to spend more time with those you love, plus you have a cool new marketing funnel to generate more leads.

We have 20 Funnel Packs available for your business right now. Click here to check them out and see how they can help your business.

What’s next for you?

Hopefully through this article you’ve found the old ‘grey matter’ whirring a little.

If you’re an agency owner who is currently reliant on referrals for new business, it’s time for you to take action. You can’t rely on referrals forever. It’s an inconsistent process that is not guaranteed at any time.

Setting up multiple methods for generating leads is going to help your business. You’re protecting your business and creating opportunities for future growth.

Don’t forget to work on your recurring revenue too. We’ll talk about this in more detail at a later date, but there’s one simple goal for now. Get that recurring revenue to at least the level of your outgoing costs each month. The sooner you can do this, the sooner you can breath more easily.

The next steps you take are up to you. Will you care more about your marketing?

I challenge you to show your business more love

Mel and I have created a free challenge for you that will enable you to show your business some of the love that it really deserves right now. We’re calling it the Non Zero Marketing Challenge.

The Non Zero Marketing Challenge lasts for five weeks and over the next five weeks we’ll be covering:

  • Week 1 – Problems
  • Week 2 – Create
  • Week 3 – Repurpose
  • Week 4 – Traffic
  • Week 5 – Nurture

At the end of the five week challenge, you’ll have a brand new content asset that you can use to drive traffic to your business. You’ll also learn how you can more effectively nurture your audience on an on-going basis.

If you’re serious about your business and want to give it the love that it deserves, sign-up for the free Non Zero Marketing Challenge below…

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  • While we love referrals and we get them, we also invest in our reputation management and visibility. While relying on only referrals would be silly, getting qualified inbound leads is much better than cold calling. I might be late, but will do the challenge now, going back to your old posts.

  • Great article! We use a review management tool also that helps build trust with potential new clients. This way while getting more referrals others are sure to see the testimonies on Google, yelp and other platforms. They reach a lot more people for years to come. Signed up for the challenge and looking forward to it!


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