Having someone refer you to a prospective client is a great way to grow your editing business. The prospect has already heard wonderful things about you and you may be the only editor being considered.
Referrals are “warm” sales leads, meaning the prospect already has a positive opinion of you. Winning the client is easier, because you have to win them over less. When prospects come to you without a referral from someone they trust or you approach the prospect, that’s a “cold” sales lead: you have a lot more work to do to convince them to hire you.
With referrals, you may not even need to win the client. Often, the prospect is ready to hire you based on the referrer’s word. This is a marvelous gift for business owners.
But should you pay for that referral?
In some industries, paying for referrals is a common practice. Among editors, referrals tend to be a hot button. There are reasons for and against the practice.
Reasons to pay a referral fee:
- You want to show your appreciation for the good thing someone did for you, especially if there were no other candidates. The world doesn’t owe you a living and good deeds should be acknowledged.
- The referrer is putting their reputation on the line for you. If the project goes sideways, they suffer too. The fee shows you recognize this and will take the client seriously.
- The client wanted to hire the referrer. You are profiting from their marketing, their successes, and their skills. Why shouldn’t you pay for it?
Reasons to not pay a referral fee:
- You aren’t the only candidate, or winning the client isn’t a given. You’re doing something to earn the client, perhaps a big something. (I would call this a recommendation rather than a referral.)
- You worry that the referrer is handing out work to the highest bidder. Freelance editing is a small world; if the referring editor is selling out, the community is going to know it soon. Still, if you don’t trust the referrer, don’t take work from them.
- You don’t think it’s ethical. This is a personal decision. If you don’t think it’s right to pay for referrals, politely tell the referrer this.
Whether the referrals are paid or not, both parties take on risks. I’ll talk about this with Adrienne Montgomerie and Laura Poole during our session, Taking Your Business to the Next Level, at the EFA’s national conference in New York City, August 29 and 30. Join us and share your thoughts! Register is still open!