In the 12+ years we've been in business, we've seen leads come from all kinds of places.
Some have led to long, profitable relationships and others have been less fruitful.
Of all the types of leads, the strongest type has always been the referral. Referrals by far have been our #1 source of leads and new business.
However, referrals come in many different stripes, and it's worthwhile to examine each one of them.
Types of Referrals
We typically classify referrals through the following types. You may call them slightly different things, but you'll find many of these pretty recognizable.
We'll explore each one of these in detail below.
- Client referral
- Investor referral
- Platform / solution partner referral
- Services partner referral
- Agency referral
- Referral agent referral
- Employee referral
- Friend / acquaintance / family referral
Of all the referrals, client referrals have been our lifeline throughout our years in business.
We know that whenever we do a great job for a client, they immediately become our advocates and they're likely to make some kind of introduction or to pass along our contact info to someone who needs a similar service.
This is why going above and beyond for a client is often a great marketing investment.
Most leads that come through a recommendation from a client end up with a high chance of closing provided they are a good fit.
Many of our clients have investors, and many investors play an active role in the business.
For these investors, they get front-row seats to our performance on the project. If they like what they see, they're likely to refer us to other companies in their portfolio.
We've been in situations where we've worked on multiple companies through the introductions from a particular investor.
An investor's intro comes with instant credibility and is likely to be received well by the founder.
Another way we've cultivated investor referrals is by getting to know people who work for VCs and PE firms. These might be at various networking events, through friends, or sometimes even a cold outreach email on LinkedIn. Once we've developed a relationship with these folks, we show them what we're capable of doing and try to keep in touch. Every now and then, we'll get pinged about an opportunity for one of their portfolio companies.
Platform / Solution Partner Referral
There are so many different technology solutions that can go into a website build.
We've been in touch with a fair number of tech platform and solutions providers over the years. These include hosting services, e-commerce platforms, content management system platforms, makers of specific apps that plug into these platforms, analytics solutions, email service providers, and more.
Some of the relationships we've developed with folks at these companies have led to occasional referrals. They usually have a low hit rate and the referred prospect comes fairly cold, but there are good ones once in a while, so we haven't totally discounted the partner channel as a source of leads.
It definitely helps to make it clear to the partner that we only take on clients with a certain budget and that we have deep experience in particular verticals.
Services Partner Referral
We've been in many situations where we've come into contact with other service providers working on a different part of the same project.
This may include:
- a branding agency that's provided a style guide for the website or even taken a shot at the initial designs
- an SEO/PPC firm that's responsible for ensuring the SEO on the new site is in good shape and that Google Ads is set up
- an analytics firm that makes sure GTM and GA are set up properly along with any other analytics tools
- a QA firm that provides a second set of eyes during the QA process
- an accessibility firm that checks the site's compliance with accessibility standards
- a content production agency that provides the photo and video assets; and others that add value in different ways.
We've tried our best to become friendly with such firms and to gauge their level of competency so that if they're good, we can recommend them to our other clients.
In many cases, if they like what we're doing and we're nice to them, these firms can become lead generators as well.
We've been lucky to get a good number of referrals from such partners over the years, and we've tried our best to send them business as well.
Unlike the service provider partners above, agency referrals are from companies that do pretty much the same thing as us, but for various reasons, they can't take on the project and pass it on to us.
These are the most common reasons for why an agency passed along a lead to us:
- The prospect's budget was too low, so the agency thought we'd be a better fit as they see us as lower in the food chain (no big deal here, we pass opportunities down if it doesn't meet our threshold as well)
- The agency has a conflict with an existing client, so they can't work with the prospect
- The agency is too busy and cannot take on the work; this is often coupled with the prospect having a timeline with a hard launch date
As we've steadily grown as an agency, the ratio of referrals from other agencies to us vs. opportunities we pass along to others has tipped towards us passing along more opportunities than being on the receiving end. This could be a function of larger budgets, which introduces the next referral type.
Referral Agent Referral
I'm not sure if I'm using the term right, but we've seen a handful of these "referral agents" who create semi-exclusive agency circles, pool passed-off leads from the agencies and re-direct them to others who may be a better fit.
If an agency ends up landing the prospect, the agency that submitted their poor-fit lead to the pool gets a cut of the project fees as does the referral agent.
We've gotten a handful of opportunities this way but we're often wary of being too enthusiastic for such opportunities as we typically need to give up 10-20% of the initial project fees to the agent and referring agency. It really has to be a sizable opportunity with good upside.
We've had instances where an employee brings us a lead that turns into new business.
This has only happened a handful of times, but we do have a policy in place providing some kind of commission bonus for the referral that converts.
The conversion rate is usually high because the employee has a pretty good idea of whether or not a lead would be a good fit for the agency, so by the time an intro is made, it's basically been pre-qualified.
Another thing to consider is that employees who've worked at a number of other places and have an extended professional network from their years of working are likely to know folks who may be decision-makers at prospective client organizations.
Friend / Acquaintance / Family Referral
I'm putting this one last because they're really hit or miss in terms of quality and can actually be more hassle than opportunity. But it really depends on the friends and family you have, their backgrounds, as well as the social circles you run in.
If you mainly know and hang out with people who're very different from the clients you have (in our case, marketing/e-commerce directors of consumer brands or founders of venture-backed start-ups), you're less likely to get quality leads. For example, if most of your extended family members are lawyers, doctors, or academics and you have a target audience similar to ours, you'll find that their referrals, if any come at all, are less likely to be a fit.
Over the years, I've tried to cultivate relationships with people who're likely to interact regularly with people who may be potential clients for us. This isn't a blatant sales move where I'm hoping to get something out of someone, but I've found that these people have shared interests with me and are generally great to hang out with. I'm perfectly happy to help people who value my expertise with zero expectations of anything in return. The important thing is to keep in touch and use a social network like LinkedIn or a newsletter to stay top of mind whenever there's something interesting and relevant to share.
In time, it's quite possible to build up a vast enough network that your name might pop up when people talk about needing something, and this is when referrals from an acquaintance or friend can be quite valuable.
I make it a point not to rely on these types of referrals but it's possible that if you've sown enough seeds, they can add up to a decent volume in time.
Building a Referral Engine
There are no short cuts to building a quality referral engine. It's taken us over a decade of building relationships, producing good work, keeping in touch, telling people what we do, and helping folks whenever we can to get to a point where we're able to see over twenty referral-based leads per month. And while most of these referrals end up not being the right fit for us, we're then able to redirect folks to others who may be able to help.
Besides the virtuous cycle of doing our best to please our clients (who then refer new clients), the most powerful activity that we've found for keeping the engine going is actually a really simple one: every week, email two people, usually from our past, and say hello.
We've kept a spreadsheet of our weekly "two contacts" for over 3 years now and have over 1,000 contacts logged. Our leadership team's efforts in being committed to this activity week after week has really added up.
The next best thing has been our monthly "Recent Work" newsletter, which has been a great way to remind our contacts that we exist and that we're putting out some great work. Our list is made up of former clients, old friends, people who used to work at Barrel, and others we've met over the years. Some people reply and say hello and occasionally, someone is impressed by what they see and is reminded to make an intro to a relevant lead.
The newsletter takes a great deal of work and our team does an excellent job of ensuring that it goes out every month. As I mentioned above, there are no short cuts.
When it comes to building a referral engine, there is no silver bullet – it's a combination of many moves done well over a long period of time.