That one referral fee rule my mentor swore by saved my bacon

My old boss from my first agency gig told me to always offer a 10% referral fee to clients who send leads our way. I thought it was a waste of money for like 2 years. Last month a client sent us a $40,000 contract from their buddy, and that $4,000 fee was the best money I ever spent. Has anyone else had a piece of advice from a mentor that ended up paying off way bigger than you expected?

2 comments

2 Comments

oliver_ward1423d ago

And that's the thing, it feels like you're throwing money away at first but the math works out crazy if you stick with it. My mentor told me to use a tiered system instead of a flat percentage, so like 5% for smaller leads and 10% for anything over 10k. I had a client send us a 15k deal last quarter and that extra 1.5k felt like nothing compared to the work that came in. The trick is getting past that initial sting of writing the check because your brain screams "that's mine" but really it's buying you future business.

abby_palmer23d ago

Omg YES this is so real. I had a buddy who runs a small agency and he told me about his first big referral payout. He wrote the check and literally sat on his couch staring at his bank account for like an hour feeling sick. But then that same referral sent him three more clients over the next six months. He said that first check hurt bad but now he just sees it as normal business cost. Honestly the tiered thing makes sense too, I feel like a flat rate can punish you on the smaller stuff.