What do you do when you get a request from a prospect or client that you can’t fulfill? Either it is work that that you don’t do but is related to your expertise, or work that you can’t take on at this time. I have seen three methods for referring work to others.
In the sub-contracting method, you handle all aspects of the relationship with the client. You create the contract with the client, manage the interface and communication, and do the invoicing. You contract with the other expert to do the work on your behalf.
For you, the advantage is that you maintain or keep the relationship with the client and you get a percentage of the fee without having to deliver the service. The disadvantage is that you take time from delivering services to your own clients to manage the work that you have outsourced. The advantage to the other expert is that they don’t have to manage the client relationship but the disadvantage is that they give up a portion of the fee to you.
The fee-based referral method is when you refer the prospect to another expert and get a fee for doing so. Typically you expect a percentage of the fee for the initial engagement and a percentage of any subsequent fees that the other expert bills the prospect in the future. The other expert manages all aspects of the client relationship.
For you, the advantage is that you do not have to manage the client relationship but still receive income from the referral. The disadvantage is that you may not be able to build a relationship with the client for possible future work. For the other expert, they get to build a relationship with a new client that may lead to more work but they have to track and pay a fee to you each time they provide a service to that client.
Giving the lead to another expert
When you pass the prospect to another expert, you pass on the lead without expectation of any fee and you are not part of the relationship with the client. The advantage is that you don’t have to do any work to deliver the service and the disadvantage is that you don’t get any fee from finding a possible client for someone else. For the other expert, they get a new client lead without having to pay a fee.
It seems like this method offers no advantages for you and all the benefits for the other expert. Why is this the method I prefer? Because I am not in it for the income. I don’t want to manage others working for me and I don’t want to track work from someone else. I take the long view. At some point in the future my generosity will come back to me in some way. I have seen this happen with presentation design work I have passed on to one designer. When it came time for me to have some graphic design work done, they offered to do it for no fee because of the clients I had referred to them over the past couple of years. I didn’t ask for or expect a discount on my work, but it was nice to see a tangible benefit from my approach.
When you get a request for work you don’t want to fulfill, think about which referral method you want to choose. You don’t have to make the same decision every time, but I hope the above discussion of advantages and disadvantages for each party helps you consider which approach is best for you. It may also help you decide whether you want to take work offered to you by other experts depending on which model they choose.
Which of the above methods have you chosen and why? Share your thoughts and experiences in the comments below.