Why Agencies Rely on Referrals But Few Treat It as a System | EP18

Most agencies say they rely on referrals, but few treat them as a system. In this episode, Peter Kang and Sei-Wook Kim dismantle the "hope-based" approach to referrals and lay out a strategic framework for building a consistent pipeline. Drawing from the book The Referral Code, they redefine referrals as a transfer of goodwill and share actionable tactics for intentional referral generation.

Peter and Sei-Wook cover how to identify the right people to ask, the critical importance of timing your ask within a "state of appreciation," and how to craft effective, open-ended questions. They also discuss managing referral relationships long-term, staying top of mind, and when a transactional referral partnership might make sense. For any agency owner ready to transform sporadic referrals into a predictable engine for growth, this episode provides the blueprint.

Key Moments

1. Redefining Referrals: Moving from hope-based belief to an intentional system.

2. The Golden Rule: Never ask for a referral outside a state of appreciation.

3. Avoiding Common Mistakes: Vague asks, poor timing, and automated blunders.

4. Building Your Referral List: Identifying former clients, peers, and affinity networks.

5. The Art of the Ask: Using open-ended phrasing and framing it as helping others.

6. Cultivating a Shortlist: Focusing on quality relationships over volume outreach.

7. Managing the Engine: Following up, showing appreciation, and staying top of mind.

Real Talk Takeaways

1. A referral is a transfer of goodwill, not a favor. It’s built on the positive emotions someone felt working with you.

2. Only 5% of people are natural referrers. The other 95% need to be reminded, which means you must ask—and keep asking.

3. Timing is everything. The worst time to ask is when a client is unhappy; the best is when they are actively reflecting on your positive impact.

4. Be specific. Instead of "anyone who needs marketing," define your ideal client profile and the specific situations they face.

5. Your network is a multiplier. A first-degree connection may not be the direct referrer but can connect you to someone who is.

6. Referral management is relationship management. Always keep your referrer in the loop and show genuine appreciation.

7. For super-connectors, a formal, incentivized partnership might be appropriate, blurring the line between emotional referral and strategic partnership.

Timestamps

00:00 – Introduction: The Problem with Hope-Based Referrals

01:07 – Defining a Referral as a Transfer of Goodwill

04:16 – Wrong Ways to Ask: Vague Requests and Bad Timing

06:57 – How to Build Your Intentional Referral Engine

09:31 – Who to Target for Referral Seeking

11:24 – The Right Way to Ask: Phrasing and Mindset

13:07 – Managing the Referral Process and Staying Top of Mind

15:17 – When Referrals Become Transactional Partnerships

Notable Quotes

"We hear over and over again that agencies rely solely on referrals... but they don't treat referrals as a system. It's like a hope-based belief." — Peter Kang on the common agency referral trap.

"Only 5% of people are natural referrers... that leaves 95% of us who need the reminding to take that action." — Sei-Wook Kim on the necessity of consistent asking.

"A referral is essentially a transfer of goodwill. It's people sharing the feeling that they had working with you with other people in their network." — Peter Kang on the emotional core of referrals.

"The rule number one is you have to ask... and then they say rule number two is keep asking. The consistency over time will compound into meaningful impact." — Sei-Wook Kim on the foundational principles from The Referral Code.

Links & Resources

Peter Kang on LinkedIn: https://www.linkedin.com/in/peterkang34/

Sei-Wook Kim on LinkedIn: https://www.linkedin.com/in/seiwookkim/

AgencyHabits Website: https://www.agencyhabits.com/

AgencyHabits on LinkedIn: https://www.linkedin.com/company/agencyhabits/

The Referral Code by Larry Pinci and Phil Glosserman

The Shortlist by David Ackert