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50+ Sample Referral Agreements
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What Is a Referral Agreement?
A referral agreement is a formal agreement or contract that covers all the basic terms and information about referral marketing. It is a mutual agreement between the referrer who refers customers to the principal to get a reward. Also, the agreement can be a give-and-take process where parties refer to each other. And thanks to referral agreements, referral sales can be managed, measured, and paid as promised among the parties involved.
It was reported that businesses expect 16% more in profits coming from referred clients.
The Anatomy of a Referral Agreement
Indeed, referral agreements settle the terms for referral marketing. But what exactly is inside the agreement? In this section, familiarize the important parts of referral agreements.
How to Create a Referral Agreement
A referral agreement either makes or breaks your company’s referral plan. So be sure you create it properly so no issues get worse, like having to hire a lawyer or face court. And you only need the following steps to form the said agreement:
Step 1: Understand the Nature and Scope of Work
Before engaging in referral marketing, familiarize your work’s nature and scope first. You even want your referrer to know a lot about who or what they are referring to customers in the first place. So explain a brief background of your business and even why a referral is imperative for the company. That way, all parties get the gist of what their whole purpose is.
Step 2: Set the Standards and Rules of the Referral
Writing about the referral’s rules and standards will be the meat of your referral agreement. So be sure you tackle the referral fee, included or excluded customers, insurance, confidentiality, and other regulations to follow. The same thing applies to the referred person, product, or service. And you can divide all the details according to clauses to make the document easy to follow.
Step 3: Use a Sample Referral Agreement
Once you have all the details covered, begin inserting them into a sample referral agreement. Have you checked all the samples listed above already? Select your favored option until you begin inserting your details from the name of parties down to the signature line. And what is even better? Each sample is customizable, downloadable, and printable. So make use of its features to form your agreement shortly.
Step 4: Organize the Details Accordingly
Don’t forget to focus on the organization of your details. A hard-to-follow agreement is as good as no agreement at all. Hence, be sure to be detailed but also specific. Or perhaps, you divide the details into groups, similar to the anatomy of a referral agreement discussed earlier. Once you are confident with the format, design, and overall information, launch the agreement.
What is the average referral fee?
Businesses normally pay referral fees between 5% and 10% of their revenue. But that will also depend on the agency regarding how generous they are willing to give.
What are some ways to reward referrers?
Businesses vary with the amount of payment for referrals. But besides the money, agencies may also offer referrers a note of appreciation, non-monetary gift, discounts, or you refer each other.
What is a finder’s fee?
According to Investopedia, a finder’s fee can be the gift coming from one party and given to another. And parties aren’t obligated to pay commission.
Indeed, small businesses can benefit a lot from referral agreements to find new clients. But they are also your company’s lifeline, meaning it could break your business badly if managed poorly. And that is where a referral agreement is at play—your ultimate tool to protect, manage, and grow your business. Download sample referral agreements now!