Welcome to your new business committee 👆🏻
Google ‘designers and referrals’ and there’s a plethora of posts extolling the virtues of referrals, but here’s the rub: relying on referrals to grow your business is relying on others to understand the type of work you like to do, the services you offer, your skillset and your interests. The result can be a new business trajectory that looks like a zigzag rather than a straight line.
But it’s not all bad news, referrals can work. You just have to keep one hand on the steering wheel…
All creative businesses need a constant supply of new business. How much new business depends on the size of your studio, your growth strategy and the natural attrition of existing clients. So there’s no one rule for how many new clients a studio needs.
For the same reason there is not one rule for where your should work originate: but from experience we know it’s a mix of clients that make a studio sustainable and part of that mix is business from referrals.
In a perfect world:
- 30% of work comes from existing clients – reliable, transactional work that keeps the studio active and busy
- 30% of work comes from organic growth and referrals
- 30% of work comes from targeted marketing to clients and industry sectors, leaving
- 10% passion projects and pro bono.
Why referrals suck
Referrals only make up 30% of the mix because it’s new business without strategy.
Instead of a steady stream of work strategically built around two or three pillars of expertise, there’s little mounds of brilliance scattered far and wide. Wherever the referrals are, the studio goes and the result can be a folio of work without focus.
That’s the first problem.
The second problem is that by the time a client is referred, a third party has often helpfully explained what you did for them, how you did it, and how much you billed. This is problematic on many fronts. At the very least you’ve lost the opportunity to increase prices; at worst you end up specialising in a client sector in which you have no interest or empathy. Much like an actor being typecast.
Moving referrals to targeted marketing
In the 2023 UK ‘Up to the Light’ What clients think survey 91% clients said they like to ‘discover’ a new agency rather than be sold to.
91% clients said they like to ‘discover’ a new agency rather than be sold to
That percentage has been steadily rising each year. Add to that, when asked where they would ‘look’ for an agency, 60% said LinkedIn. Also worth noting is 40% of clients said they would happily refer their design partner to a colleague, but most have never been asked.
That’s how you can make referrals work:
- ask existing clients to refer you to their colleagues
- be visible on LinkedIn so when you are referred, you’re not an ‘unknown’.
And there’s an art to using LinkedIn wisely.
What doesn’t work on LinkedIn
The clients using LinkedIn said they disliked posts about:
- self promotion
- with too many personal stories, or
- information that took too long to read
What does work on LinkedIn
Clients specifically liked to see:
- quick nuggets of useful information
- information relevant to them and their industry
- authentic, strongly held views expressed well
- video and highly visual information
- distinctive and consistent themes.
That’s great because these types of posts designers do well.
Of course, not all referrals suck. Sometimes they lead to a dream project perfectly suited to your studio and optimally costed. Problem is, that happens by chance. The right person being in the right space at the right time.
Studios relying on referrals can slowly lose control of their business. Much better to have a strategic plan for growth, targeted industry sectors and a new business process. Research shows that strategy should include LinkedIn.
Not sure how to use LinkedIn? That’s OK because this month’s Lunchtime Learning’s topic is ‘How designers can use LinkedIn‘. It’s a step-by-step guide to getting started with case studies of how other designers are using LinkedIn well. Register ($60 + GST) to watch live the presentation live on September 28 or on demand anytime for the next 30 days. And all registrants get entry to a Slack channel to continue the conversation and ask any unanswered questions..
More information about new business and referrals:
After 30+ years running a design studio, I accumulated a pretty special network of fellow designers. One thing most have in common: a need for more information about the ‘business’ side of design. Most are impatient with any task competing for time spent doing what they love – designing so they wanted more info about how to work more efficiently and effectively.
Not me. I love that intersection between design and business. I built a career working with Ombudsman schemes, the Emergency Services sector and the Courts. My special power has always been an ability to use design to translate the difficult to understand or the unpalatable message.
I now use exactly the same skills with creative business owners. I translate the indigestible into bite-sized chunks of information. I share insights, introduce tools and embed processes to help others build confidence business decision-making skills. More confidence makes it easier to grasp opportunities. More confidence makes it easier to recognise a good client from the bad.
Outside DBC I have mentored with Womentor, AGDA and most recently with The Aunties.
And I’m a proud board member of Never Not Creative. Ask me about internships
Always happy to chat, I can be contacted here.
Our second site is designbusinessschool.com.au – Australia’s only business school for designers