Make a passive income through referral fees

Do you want to start the year with a passive income that can reach thousands of dollars this year? Well, I’m a freelance writer who offers a 10% referral fee on referrals who I work with. I don’t want this blog post to be pitch-heavy, so I have included the hows, whys, and a couple stories of referrals and how they worked out.

I work with a lot of real estate agents and they would often talk about referral fees in their industry. So, a couple years ago, I realized I was spending upwards of 50% of my time looking for clients. I decided to offer referral fees as a means to thank people for bringing me new projects, and have a larger percentage of potential clients approach me rather than me seek them out.

This isn’t a new approach to marketing for me. In fact, I’ve offered similar payments to people in the form of credit on future work and for one client 10% on all referrals. But, it was about three years ago that I opened this opportunity up for anyone and as a permanent fixture to my marketing plan.

With a couple conditions which I’ll explain below, this is an easy way for current clients, future clients, and even people I haven’t worked with to make a little money on the side simply by referring someone. You don’t need to do any work except for connecting me with a new client who hires me.

How my referral fees work

In its simplest terms, when you refer someone to me and that person hires me, I will pay you 10% of what that person pays me, when they pay me and for the lifetime which I work with that client.

Your payment can be made as a:

  • Person-to-person transfer such as Venmo, Cash App, cryptocurrency, Zelle, etc.
  • Credit for future work
  • Donation to a non-profit organization
  • Gift card to your store of choice

Now, there are a few conditions that I’ve had to add. Some are common sense and others are based on experience.

  • You cannot refer yourself, though you can, and are encouraged to, refer family members and friends.
  • I pay you when I am paid for services, minus fees. For example, I am paid $2,000 by your referral. Square charges me about 4% for transaction fees and services, leaving about $1,920 remaining. You will make $192.
  • I will not pay unless I have been paid. That means if you call me saying, “I really need cash now and I’m sure my friend will hire you,” that isn’t the point in which I am comfortable paying you yet.
  • If I feel that something shady is happening, or the system is being abused, I may not let you participate in the program. The best example I have of this is when I received a referral for someone who paid a deposit of $1,500. I paid the referral fee and then the next day the person referred to me wanted a refund because they decided not to move forward with their book. They demanded the full amount back, of which I’d already paid the referral fee from. Instead of assumptions, I later found out that the two had conceived this as part of a scheme.
  • I do not have to accept a project just because it is referred. While this doesn’t happen often, there have been times I have not been comfortable working with someone who was referred to me. So, just because you refer someone, don’t expect me to work with that person until I tell you I am interested.
  • I would like to reiterate that this is my program and I have the sole discretion to modify or eliminate it without reason. I offer this as a benefit, but am under no contractual obligation to anyone. Consider this like a tip of appreciation.

So, why do I offer this. 10% can be a lot of income to lose with minimal work by the referrer. Well, when I started to weigh the pros and cons of offering a referral fee, I realized that the pros well outweighed the cons. In fact, there were only two cons. The first was that I’m losing 10%, and the second is that some people will try to take advantage. Both of those have been remedied.

The pros of me offering a referral

With the ups and downs of writing it is important to always have work as well as always have planned work coming up. This isn’t always easy, and when things don’t mesh I can find myself with too much work or not enough. This referral program is a passive way of bringing in new clients that for the most part have already been vetted by the referrer. After all, when someone refers a person they get paid when I do, so if something goes wrong, the referrer loses out. I think that’s pretty much understood.

The pros of this program for you are that you can earn a passive income, and in my success stories below you can see how well this can work in your favor. The pros for me are equally important.

  • I can reduce marketing time and money: This program is a marketing tool to motivate clients, friends, family, and anyone else to bring attention to what I do. If I have hundreds of people regularly referring me to write a book or another writing project then I can spend my time with clients rather than scouring the internet or responding to strangers in writing mills. At last check I spent 25% of my time, and sometimes up to 50% just looking for work.
  • People trust referrals: When a friend or relative recommends someone the relationship begins with trust. The referrals I receive are because the referrer trusts me enough to refer me. On the other end, when we receive a positive referral from a friend we are more likely to use that person. There are millions of people who want to write a book, but they don’t go forward because they don’t know where to go. If a trusted person in their life gives them a place, then we all benefit.
  • Referrals are vetted: From my experience, it is the people who approach me, and the clients who come from referrals that tend to be my best clients. One of the reasons, as I mentioned earlier, is that most people will not refer someone unless they know that the working relationship will be successful. This helps me with two of my most difficult challenges which are, “is this project good for me and will I jive with this person.”
  • I can have consistent work: It only takes a couple referrals each year for me to have a consistent work schedule that doesn’t fluctuate. Whether I am writing blog posts or books, consistency is important.

Success Stories

So, how many people have benefited from this program? Really, I don’t know, but it’s more than a dozen in the last two years. While I won’t mention names, because people may not want you to know their name, I can give a brief summary of a few whom I still talk to.

  1. My first referral was about ten years ago before I started the program. This was someone who’d contacted me, but was pretty much living in poverty. He had a story though and wanted to tell it. I told him, “You know what? If you can bring me clients I’ll give you 10% of what they pay me.” He did. Over the next seven years he brought me ten different clients, all of them for blog writing. He made nearly $7,000 in that time. Some of the money he used to hire me as a writing coach so he could write his book, and the rest he used for other things.
  2. A former client referred a friend who wanted to write a series of short novels. The tally in the end was about $1,700 in just over a year.
  3. One person recommended a business owner to me who hired me to write content for their company. While this was only meant to be a small one month project, it ended up lasting two years bringing the referrer $3,000.
  4. Lastly, is a current client who recommended one friend who I begin work with soon, and another friend just the other day. If both of these pan out were probably looking at around $1,300 this year or more if more referrals come in.

The average, I pay out to a single person each year is about $450. This averages the large and small projects. The average book will have a referral fee ranging between $600 and $800 per book. Blog posts are unique in that they tend to be smaller, but consistent payments each month averaging about $30 per month.

What do I expect from a referrer?

  1. The first thing I expect from a referrer is referrals. There are no quotas, agreements, or anything like that. It is cut and dry. I get paid and you get paid.
  2. Secondly, you do not need to do anything more than refer me, and it’s helpful if I have some information or feedback on the person you referred. Pass on my contact info to your friend, or give me their contact info and your work is done.
  3. Third, let me know you referred the person to me so that I know ahead of time I will need to send you a cut of the payments.
  4. Fourth, please don’t harass someone you referred. This has happened a couple times in the past and it is uncomfortable. Pushing someone too much to work with me when they are not ready can lose you a good friendship which isn’t worth the money. In fact, this can eliminate you from the program.

That’s it. Refer someone to me. If we work together, then you get paid when I am paid. It’s an easy passive income that benefits you, me, and the person you referred.

If you are looking for a writer to help with your book or other writing/editing project please contact me to discuss. You can find my rates and types of projects I work on here.

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