Why your employees don't refer you new business

Most agencies I work with now - or I’ve been employed by in the past - offer some kind of incentive to staff for introducing new business.

“We’ll pay you £1,000 if you refer a lead that becomes a client”...sometimes followed by “that meets [this minimum spend amount]” when you’re even more keen for it not to work.

To you, it feels odd, because some of the team might almost double their salaries with the commissions you might be offering, yet nobody ever refers their mates to the business development manager?

In the scheme of things, I’ve worked with a fairly small sample of agencies (Agency by Agency research identified 25,495 marketing agencies in the UK right now), but I make a point of asking when it’s mentioned: has anyone ever referred a lead to you under this scheme?

Some reasons why

Here’s some speculation from me (and I’d love to hear your ideas):

• For many agencies, even the new business team doesn’t really understand what the criteria for a “good client” would be, so people who don’t work in new business have no idea whether the people they know would end up being turned away anyway (which is ironic, because the looser the criteria your agency has, the less likely you are to ever decline to pitch)
• The more senior the staff member, the more they’ve been around the block and the more likely they are to actually know people who could become clients…and the less likely they are to be paid under the scheme. “That’s your job anyway”, you reason
• Your staff don’t want to let their friends down and so much of this is outside of their control
• If they’re good friends (and therefore likely to trust a recommendation), they’ve probably heard your staffer moaning about you over a pint
• You mention the scheme sporadically and, as we know, clients are only in the market for a short period of time each year (or even less frequently), so when it is the right time, your staffer has forgotten there’s an incentive
• Most of your staff hate the idea of being in sales, unless you’ve made it part of your culture (if that’s something you want, we should talk).

Something I’ve done that’s better: the Black Book

One of the problems with a referral scheme like I’ve outlined here is that your staff member is expected to do most of the work…and it’s work they don’t know how to do.

Instead, be prepared to do the work yourself. You can either:

• Trawl through each employee’s LinkedIn connections and, when you see someone matching your ICP, ask the question; or
• Ask each employee who they know.

I’ve mentioned on numerous podcasts etc. that, when Rise at Seven was growing quickly and needed good people, I’d ask each new employee to name 3 people they’ve worked with who’d be a good fit for us. This resulted in some of our best hires, since the same names kept coming up in the city, so it felt obvious that we should set up a chat.

We applied the same principle to lead generation with the Black Book.

The Black Book was a Google Sheet that contained a list of everyone that everyone knows. It had 6 columns:

1. Staff member name
2. Name of person they know
3. Job title
4. Company that person is at
5. How they know them (you could do a dropdown e.g. former client, former colleague, IRL friend)
6. (Optional) social media handle for that person - it’s helpful to a) make sure you have the right person and b) so you can connect easily

The senior people started to populate the sheet, so it had a bunch of entries in it. This is a worthwhile exercise in itself because most people haven’t taken the time to go through their connections recently and have failed to realise that the work experience kid from their first job is now the marketing director at Pepsi, or something that feels equally implausible until you remember you’ve been doing this for a decade or two.

Then, each senior person asks their direct reports to fill it in, and so on. We make a promise not to contact anyone without their consent, of course.

Here are some reasons why this is worthwhile:

• Each new lead can be cross referenced with the Black Book. Does anyone we work with know that person? Should they be working on this piece of business, or can they give us the inside track? Or did they actually mention us to this person and forgot to mention it because they don’t think our referral scheme is real?
• If I want to replace a client in a certain sector (or I’ve got a great case study in that sector)...or I want to run an event and need an appropriate speaker…I can see who the team knows who might be a fit and ask them to reach out directly. We’re not always asking for cash - we’re giving them something that they might find valuable
• Nobody has ever heard of your referral scheme actually paying out to a staff member (because nobody has ever referred anyone - it’s a self fulfilling prophecy), but everyone can see that their peers have added names to the sheet, so they’re more likely to actually do it
• You can ask your staff member: I would love for us to be working with this brand; if I reached out to this person you know, would it be OK?

With a Black Book, you’re doing the sales thing for the team member (who generally doesn’t want to do the sales thing), but you’re better informed than you would be if you’re prospecting blind.

Give it a go and let me know how you get on.