Why Referrals Aren’t Enough: The Case for a Predictable Sales Process in Agencies 

       When we asked agencies about the top challenges they face, 73 percent said “too few clients” was one of the most difficult problems to overcome. 

       The agencies mentioned here were not new entrants to the marketplace. They were established branding, creative, and digital agencies; they had a strong reputation among their existing clients; and, as reflected in their portfolio, they were creating solid content for their clients. However, despite all of this, many of these agencies are stuck in a similar cycle. A couple of good months will occur because referrals have come in and then, during the remaining time, the pipeline will be thin and anxiety begins to creep into the decision-making process. 

       Referrals are very valuable to an agency. Referrals are based on some level of trust and are often closed more easily than cold prospects. The problem is not the use of referrals as a source of new business. The problem is when referrals are the only source of new business. 

       In this blog post we will examine why referral-only growth is so fragile; the underlying cause(s) of the fragility of referral-only growth; and, most importantly, how agencies can develop a simple and reliable sales process to support steady growth. In addition to providing general advice to agencies, we will provide specific examples of how this type of transition has worked for our agency and for our agency partners. 

When Your Pipeline Is Built on Luck 

Most agencies don’t begin by creating a sales strategy, but rather a client. Projects follow other projects. Clients send you to their colleagues. Past contacts move to different companies and bring your agency with them. Eventually, your ability to deliver quality work helps create a “word-of-mouth” pipeline where new clients come through referral. 

That’s the good news — at least until it stops working. Referral only pipelines have some obvious and recurring issues. Revenue tends to fluctuate wildly between “feast” and “famine” as big projects come in and go out. Planning for future projects and revenue is essentially impossible due to the lack of visibility into what will be landing in your pipeline in 3-6 months. Decisions about hiring staff and investing in new tools or capabilities can be risky, since they often depend on others recommending your company. 

We see this with our agency partners, and we’ve experienced it with our own company. During slow periods in terms of referrals, it is easy to fall into the mindset of simply refreshing your inbox to wait for a warm introduction. 

Referrals are always welcome. However, when an agency relies on referrals for its growth, then the agency’s pipeline is really being left up to chance. This is unsustainable for any business looking to grow intentionally. 

The Real Issue: A Blurry Value Proposition 

There is an underlying issue in addition to the reliance on referrals: The Agency does not have a defined value proposition. 

Many Agencies are unable to define their ideal client; what problems the agency solves for them; and the outcomes that clients may reasonably expect by working with the agency. 

If an Agency is unable to provide these three definitions with clarity then many other issues will follow. Generic marketing copy is usually a result of attempting to address all possible clients. Outreach can feel awkward as it is not always apparent why a client should contact you. Surface-level content results from lack of focus due to inability to identify a clear problem that is well understood. 

“we assist businesses with branding and digital marketing” is a very general value proposition and does not inform the potential client of why they should select your agency as opposed to the agency down the street, nor does it suggest the type of business that would be best suited to partner with your agency. 

Our agency was able to make changes once we were more specific about the types of businesses we assist (small-to-mid-sized branding, creative and digital agencies) that have primarily grown via referral and want a more predictable way to generate new business. With this change in direction, conversations became less difficult and our content attracted the right prospects rather than attracting additional noise. 

Clear positioning is the basis of a predictable sales process. Without a clear position, even the most effective tools and/or automation will perform poorly as the message being delivered is not clear. 

Moving Beyond Referrals: A Simple, Systemised Sales Process 

Going Beyond Referral Driven Sales – A Simple & Replicable Sales Process for Agencies 

Creating a “sales process” can seem daunting, especially when you are proud of the relationships and craftsmanship within your agency. However, a sales process does not need to be complicated, aggressive, or both. 

Most successful agencies create a simple, sustainable, and repeatable sales process in conjunction with their service delivery. 

A simple framework looks like this. 

Step 1: Define Your Ideal Client and Their Pain Points 

Identify a defined target market. Do not identify yourself as “anyone who requires creative services”. Identify the type of business you work best with (industry, size/stage, decision maker). 

Now, define what challenges they face. For instance, a founder-led B2B services company that has solely relied on referrals may be experiencing challenges including: irregular lead flow, an outdated website, or branding that no longer represents who they are today. 

Using these points, every message you create will become easier to communicate to your target audience. You will know exactly who you are communicating with, what they care about, and how your work aligns with their goals. 

Step 2: Sharpen Your Value Proposition 

As long as you have identified your ideal client, you will now develop how you speak to the value provided by your agency. 

A clear value proposition will generally cover the following items: 

• The problem(s) your clients are trying to resolve. 

• The promise/outcome you are seeking. 

• Your evidence that you have delivered the desired result previously. 

• The pathway you will follow to achieve the desired result. 

For our agency’s work, that would be stated as: we assist agencies in moving from a referral-based model to a predictable, process-driven method of securing clients. We support this by referencing the results we have achieved, and we describe the process we use. 

By creating a clear value proposition, the conversations with prospective clients will be far more relevant to the solution they are seeking. They will be able to see how you described their challenge, and they will understand how you can assist. 

Step 3: Create High-Value Content That Shows How You Think 

Content stops being arbitrary once the value proposition is clearly defined, and begins to function as part of the sales system. 

High-quality content should generally meet at least three criteria: education, trust-building, and expertise demonstration. As opposed to merely displaying finished product examples, consider providing content such as: 

• Research-based insights regarding topics such as: 73% of agencies state that “not enough clients” is the biggest challenge they face. 

• Detailed case study descriptions that detail the issue, your approach, and the results (as opposed to merely showing the visual output). 

• Guides/practice frameworks that enable your ideal clients to understand and tackle specific problems. 

In our experience, the content that resonates most is the content that agency leaders can apply directly away, regardless of whether they ever choose to work with you. This shows how you think and how you resolve problems, making subsequent sales conversations seem like a continuation of something already in motion. 

Step 4: Establish a Consistent Prospecting Rhythm 

At this stage, agencies begin to let go of relying exclusively on referrals. 

Rather than only doing sales when things slow down, the goal is to establish a light, yet consistent prospecting cadence that occurs weekly. Each agency will determine the perfect blend of platforms to include in their cadence, but typically includes platforms such as LinkedIn, targeted e-mail, and partnerships with other complementary service providers. 

For example, you may determine that you will reach out to a certain number of new, well-researched prospects via LinkedIn each week, post one or two useful articles addressing a particular problem, and send a handful of quality-based e-mails to companies matching your ideal profile. The tone can remain human and consultative; the objective is to generate more of the correct conversations, versus waiting for introductions. 

In our agency, the consistent, moderate level of prospecting has had more impact over time than any single large campaign. It serves as the steady drum beat helping to stabilize the highs and lows created by the timing of referrals.  

Step 5: Track What’s Working and Refine 

A predictable sales process does not necessarily need a comprehensive technology stack, but it does need visibility. 

We’ve discovered that even a simple spreadsheet and a routine review can produce a substantial effect. By monitoring where inquiries originated, how many conversations resulted in proposals, and how many proposals converted into projects, you’ll uncover trends: which messaging types resonate, which groups of people respond, and where people are dropping off in the conversion process. 

The feedback loop established here transforms a series of actions into a process. Rather than guessing, you’re now able to make intentional changes based on your data, double-down on what produces positive results, and develop a process that naturally becomes second-nature to your team and effective for your agency partners. 

What This Looks Like in Practice 

Growth felt unpredictable as well as reactive when our referrals were the main source of new business. While business was coming in, it was difficult to get a clear vision beyond the next few months. When we experienced a couple of relatively slow weeks, our confidence would quickly turn to worry. 

Once we began to develop a more formalized sales process, a number of changes occurred. 

Our revenue was much more consistent as a result of having three ways to gain new business (referrals, inbound through content marketing, and proactively reaching out). As a result of having a clearer understanding of how many of the conversations we were having actually led to a project, planning was also made simpler. With a more reliable and diversified pipeline, we felt more comfortable investing in the resources needed to grow the business, and not being so dependent upon one single lead source. 

This has been true for our agency partner relationships as well. After they have defined their ideal client, refined their value proposition, and committed to consistently creating and distributing valuable content, and consistently reaching out to potential clients; referrals are now a portion of a larger and more diversified funnel. While they certainly appreciate each referral that comes in, they are no longer sitting back and relying on them exclusively. 

The Payoff: Momentum, Not Just Moments 

Once an agency moves away from relying solely on referrals to generate new business, growth feels less like a string of luck and more like a steady climb. 

While there will still be some ups and downs (project based businesses are inherently variable), the peaks and valleys are far less dramatic. The teams are able to plan with greater certainty, pick and choose their clients with more care, and spend less time worrying about where the next piece of work will come from. 

The real advantage is not just in getting more leads. The benefit is in having momentum. 

Having a solid value proposition, regularly communicating with prospects, and using a simple sales process creates momentum. Each opportunity builds off the last. Your content drives conversation. Conversation leads to proposals. Proposals eventually lead to long term partnerships. 

Referrals will always be important as a sign that you deliver quality service and take care of your clients. Referrals will never again be the sole source of all of your future business 

Recap  

Here’s what it all boils down to: 

Many agencies face the “we don’t have enough clients” dilemma at some point, even when referrals are strong. 

Typically the root cause of the problem is a lack of clarity around who the ideal client is, the problems that the agency solves, and the benefits/outputs that the agency provides to its clients. 

Using a simple, methodical sales process that is built on a solid value proposition, content that adds value, regular prospecting efforts, and rudimentary tracking; can convert a reactive and referral heavy-growth model to a more predictable one. 

From working with our own agencies to working with our agency partners, we’ve found that this transition produces increased stability and confidence in addition to attracting clients that fit better. 

If any of these points resonate with your agency, take one small action this week by refining your ideal client profile, updating your value proposition, or committing to one consistent outreach effort. 

Or, if you’ve already begun to move beyond referrals, Our white label agency would love to know about your experiences. Please leave us a note about your experience, share this article with another agency owner that may find it helpful, or subscribe to our eNewsletter for additional practical insights on how to develop a more healthy and predictable agency.