TL;DR

• Engagement: I’m planning out the 2025 research calendar now, and I’d love to hear about what you’d like to learn next year. Drop a comment to appease the algo gods, and give me some feedback on next year’s agency research! ​
• Referrals can drive massive agency growth, but it requires intentionality.
• AM is better positioned to ask for referrals than Sales, so have them own it.
• Sales should prioritize qualifying referral leads (they close faster).
• Bizdev should facilitate referral programs with partners (vendors, professional service firms, other agencies, etc.)
• Marketing should provide support to AM, Sales, and Bizdev to facilitate referrals and track effectiveness.
• Design a referral cadence on a schedule and/or triggered by specific events to make referrals more reliable.
• Webinar: Join Steve from BugHerd and me as we discuss the key findings from the Digital Agency Webdev Trend Report hosted by Productive on Thursday, 10/3.
• Conference: I'm attending Punctuation's MYOB conference. Come say hi!
• Workshop: Our friends over at Sakas & Company have a really cool event series that begins tomorrow on agency M&A. Save $400 on your ticket, when you use affiliate discount code PROMETHEANVIP at checkout.
• Presentation: I'll be presenting a session in December at the 2025 Blueprint for Success Workshop on industry benchmarks and trends. Use code PR10 when you register for 10% off.

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Welcome to 4Q!

Today’s topic is referrals.

The bane and boon of agency growth.

I’m focusing on referrals today because it’s time I gave them some props.

I’ve written a lot about why it’s bad to rely solely on them (and I stand by that), but they can be a fantastic part of a reliable agency growth strategy.

Before we jump in, I have some housekeeping items:

• New Service: The new research service I mentioned around market sizing, industry research, ICP development, and buyer committee identification last time is taking shape. It’s useful to both enterprise SaaS/PaaS companies and digital agencies. I’ll open the beta service to newsletter subscribers first.
• My Consulting Capacity: I’m about full for the rest of the year. If you’d like help with revgen or growth strategy development before 2025, please LMK soon.
• New Research Topics: Speaking of 2025, I’m planning out the research calendar now, and I’d love to hear about what you’d like to learn next year. Drop a comment to appease the algo gods, and give me some feedback on next year’s agency research! ​

With that out of the way, onto the referral content!

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Relationships drive agency growth.

Most of us knew this, but the growth study we published earlier this year really drove the point home.

Client referrals and partner referrals were the first and third most effective revgen tactics agencies relied on to grow their businesses.

I’ve been pretty vocal about the difference between intentionally incorporating referrals into growth strategies and sitting around waiting for them to wander in.

That intentionality is the key differentiator.

Those that sat around waiting for revenue to appear did really well throughout the 2010s, and even up through the first half of 2022.

Unfortunately for them, brands started to slow their tech spend during the second half of 2022, and warning lights began to flash.

By the time interest rates rose, the major tech layoffs hit, and brands curtailed their tech spend in 2023, many were in serious trouble.

Hell, even those that had sophisticated repeatable revgen systems in place were cautious in 2H23.

We saw leaders deal with this by going through three main phases, roughly in this order:

1. Draw down cash reserves.
2. Reduce headcount via layoffs or simply not backfilling positions.
3. Adapt and improve revgen tactics.

Now, in 4Q24, we’re seeing pipelines fill back up.

Part of this is the recent interest rate cut, but an arguably more significant part is the baptism by fire the industry went through the past few years.

Back to referrals.

When leadership teams began to adapt their revgen tactics, some became much more intentional about their referrals. They identified them as a key growth vector and put serious effort into building out their referral programs.

I was lucky enough to have a front seat to many of these buildouts, and I’d like to share what's been effective.

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Account Management

We’ll start with something controversial: salespeople shouldn’t ask for referrals; that’s the account manager’s job.

Think about the buying and delivery process.

1. Awareness: In general, it starts with marketing. Strangers find your brand via referrals, SEO, conferences, etc.
2. Discovery/Evaluation: They engage with and evaluate your content.
3. Intent/Purchase: They eventually interact with someone from sales who guides them through the purchase.
4. Loyalty/Evangelist: Somewhere around the purchase point, the new client is handed off to account management and project management. These two roles take over and maintain the relationship and deliver value.

Now, think about when someone is most likely to make a referral. It’s not during the awareness/discovery/evaluation phases (marketing), and it’s probably not during the intent/purchase process (sales).

They’re probably most likely to make a referral once they experience the value of working with you, somewhere in the loyalty/evangelist phase.

Account managers are in the perfect position, relationship-wise, to know when the client is at peak happiness. This allows them to be incredible referral generators.

AM should own the actual ask.

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Sales

If sales isn’t asking for referrals, wtf are they even doing?

Sales stuff, duh.

Sales should be the landing pad for the referral connections that AM generates.

Again, their job is to guide prospects through the buying process.

When a referral comes in, they’re already aware of a key benefit of working with you. That’s what drove them to seek out the recommendation in the first place. You can think of this as they’re entering your sales funnel much closer to “sale” than “marketing qualified lead.”

Because of where they’re entering, your sales professionals can move more quickly through the qualification process (don’t skip it!) and on to the logistics of getting the deal done.

It should go without saying that quality referral leads should be prioritized, ceteris paribus.

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Business Development

Remember Bizdev != sales.

Bizdev’s job is to plan and facilitate partnerships and partnerships can be a massive referral channel.

Their referral work is similar to their other partnership work.

They source potential partners, connect with them, evaluate the potential for a positive partnership, and structure the engagement.

This is usually done by leadership at tiny shops, with leadership guidance at smaller shops, or by dedicated Bizdev professionals at large ones.

Typical partners for agencies include pre-structured programs with hosting companies, custom partnerships with professional service firms, and other agencies that offer complimentary services.

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Marketing

Marketing’s key job is to provide messaging and content support for the referral process.

They already own the ideal client profiles and buyer personas, so building communication assets for AM should be trivial.

Conversations with AM, Sales, and Bizdev should influence the assets they create, and the materials can include things like referral one-sheets for AM, late-stage assets for Sales, and partnership program assets for Bizdev.

Marketing may also house the program’s attribution tracking.

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Intentional Referrals

Once you have the roles and responsibilities figured out, the next main piece is to build out a standard cadence. AMs should have a set schedule or trigger when they’ll ask for referrals. These need to be planned in advance so Marketing can have assets ready and Sales can respond quickly to new referral leads.

Beyond that, it’s just management.

You can include things like commissions, gifts, charity donations, and other referral incentives. I don’t have strong opinions on these so go where your heart guides you here.

Again, relationships drive agency growth, and referrals are a key relationship revgen channel. Unfortunately, referrals aren’t something you can just hope for, but with a little planning and structure, they can make growth significantly easier.

Hopefully this helps you design more effective referral programs and makes growth just a bit easier.

See ya in a few weeks!

(or Thursday at the webinar)

-Nick

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Webinar: 2024 Trends in Web Dev & Design on 10/3 at 4p ET

Join Steve from BugHerd and me as we discuss the key findings from the Digital Agency Webdev Trend Report hosted by Productive. We'll be recording it, so if you can't make it live, be sure to register, and you'll be able to watch it later.

We'll cover:

• The tools devs and designers are using to create for the web, how and where they’re using AI
• The average number and types of sites everyone’s working on (brochure, complex informational, e-commerce, web apps)
• Project hosting choices, low code / no code use and preferences, and CMS usage
• Upcoming emerging tech and trends that they’re most excited for
• And more!

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Events I'm Attending (or just like)

I'm Attending the MYOB Conference

I'll be attending the MYOB conference October 21-23 in Atlanta. It's a business conference for creatives, marketers, and digital firms put on by Punctuation.

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Agency M&A Series

Our friends over at Sakas & Company have a really cool event series that begins tomorrow on agency M&A.

The 3-part workshop will give you insider knowledge and actionable strategies to help you grow your agency’s value. You’ll learn how to prepare for a smoother exit, tailored to your unique goals and circumstances.

Save $400 on your ticket, when you use affiliate discount code PROMETHEANVIP at checkout.

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I'm Presenting at the 2025 Blueprint for Success Workshop

Steve at Agency Outsight is hosting a multi-session workshop to help agency owners set themselves up for success entering 2025. I'll be presenting a session in December on industry benchmarks and trends. Use code PR10 when you register for 10% off.