Internal Referrals — An Under-Tapped Way To Grow Your Freelance Business

This article was originally posted to Medium.

What’s the best way to build your freelance or consulting business?

Let me offer some common guesses:

Inbound marketing?

Outbound sales prospecting?

Asking your existing clients for referrals?

These strategies can all work.

And it’s smart to hedge your bets by doing all of these things all of the time — even when you’re running at full capacity or near it.

But there’s another low effort tactic that you should add to your business development playbook: the internal referral play.

Let me explain how it works.


What’s An Internal Referral?

An internal referral is simply what I call asking your client point of contact if a colleague(s) might need your services.

That colleague can be:

  • On the same level of the organizational chart
  • At a higher or lower level on the organizational chart
  • Working for the company’s sister company, subsidiary, or subdivision (don’t forget this one)

But the definition, at least as I conceive of it, needn’t be strict.

The key thing is rather that you’re being introduced by somebody within the system to another point of contact within (roughly) the bounds of the organization.


Internal vs. External Referrals

Most freelancers and consultants who think about asking for referrals tend to automatically do so in external terms: hoping to tap into their point of contact’s primary or secondary network in order to open up new business opportunities.

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But consider some of the advantages of internal referrals that I outlined in the infographic above:

  • Assessment: While getting referred to a potential client dramatically increases your chances of landing that work, nothing is set in stone until the contract is signed. Clients may sometimes try to refer work to you as a sort of goodwill gesture or out of appreciation for exceptional work. But those on the receiving end may be interested in something very different than what you have to offer.
  • Onboarding: If you’ve ever onboarded several new clients in the same month, then you know how difficult multiple concurrent first-time net 30 invoices can be on your cash flow. Assuming you bill monthly, from initiating work until you get paid could be as long as 60 days. If you can begin work for a new department within an organization that you’re already working with, then you should be able to avoid this common pitfall. (Probable exceptions: international offices and subsidiaries, sister companies and subdivisions).
  • Qualification: If you’ve been working with a client for the long term, it’s relatively safe to assume that they’re at least close to meeting your current lead qualification criteria. Or at least that they were when you began working with them. External referrals can, frankly, be all over the place in this regard. There can be significant space between the type of business your current client thinks you might be interested and those that you actually are. Your business needs might have evolved since you began working with your client. Your client probably has no way of knowing that.

Caveats and Execution

1: Gather Intelligence About Your Client

Of course, landing internal referrals — or any kind of referral — is easier said than done.

Last week, I wrote about basic due diligence for freelancers. And some of that knowledge is applicable here too.

For obvious reasons, this tactic isn’t likely to be very successful if your clients are mostly 10 person startups.

The person who is commissioning your current work is simply overwhelmingly likely the only person with the authority to do so in the organization — and might even think the proposition to be a little absurd.

But on the flipside, there’s no magical headcount at which these opportunities will open up either.

Not a 50 person organization. And not a 200 one.

To spot internal referral pitching opportunities, you’ll want to gather as much intelligence as possible about the company you are working with. If you’re serious about this, the more information you can have — the better.

That means:

  • Using LinkedIn to work out lines of reporting and identify comparable departments to the one you’re working with in different units or verticals of the business. If you’re working with a well known organization such as Google your prospective next internal reaches might even be well known figures.
  • Knowing which agencies your target client works with. Because these might represent roadblocks to your attempt to deepen your engagement.
  • Keeping tabs on your client’s output. If you’re writing white papers for them, consider setting up a Zapier hook to catch their new white papers by email. If they’re not yours, who’s writing them? Is it really the person on the byline? If so, perhaps they could use your help too. Consider asking your point of contact for an introduction. But be tactful. Your goal is to find places that your contact may not have thought your services might be needed but where they genuinely might be. Not to be a vulture eyeing up the work of other contractors as prey.

The results of this surveillance work might surprise you.

One relatively small organization can be fragmented into several working groups which each has its own marketing/sales functions.

Alternatively, a monolith may have aggregated marketing resources at the VP/SVP level.

In that case, the only work left for you to capture might be that outsourced to agencies and other contractors.

2: Integrate — As Much As Possible

The second big leg-up in this process is being as embedded into the fiber of the organization as you can be.

Naturally, as a consultant/freelancer you’re at a competitive disadvantage relative to in-house staff.

This is another reason why, if at all feasible, you should push for face to face meetings with your point of contact.

You may learn of internal referral opportunities that may otherwise have evaded you. You may impress other team members while you’re there. It opens options.


Conclusion

Here are the main things to know about internal referrals:

  • Client acquisition costs five times more than client retentionI don’t think of this as either upselling or cross-selling. But it is an effective means of widening your reach within the organization you’re already working with.
  • They can have several advantages over being referred to prospects outside of your client’s organization, including an easier ‘acceptance’ process, a minimal onboarding, and a much higher likelihood of meeting your lead qualification criteria. And don’t forget — in most cases, you should already be on the payroll.
  • This is an advantage to working with larger organizations rather than startups and small businesses.
  • Information is key. Identifying internal referral pitching opportunities involves knowing what your organization is doing that you’re not involved in.
  • You can try to do this by gathering information from the internet or cultivating a closer relationship with your client. I say do both.