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Incentivising referrals from other businesses is a great way to expand your client base without having to manage in full the end-to-end processes of securing new customers or clients. A referral agreement can help you manage those relationships between your organisation and companies that send business your way.
Here's what you need to know about a referral agreement, including how to write one and where to pick up a handy template.
A referral agreement is a formal contract between two parties: a referrer and a business. It is a document in which the referrer agrees to send over potential clients to the business, usually in exchange for a set fee. Many companies enter into such agreements because quality referrals can offer a reliable source of revenue.
In mutual referral agreements, both parties will agree to refer clients to each other as a sort of reciprocal arrangement.
You can choose to create a referral agreement for your business at any time. Most commonly, companies may decide to implement a referral agreement for two reasons:
The contents of your referral agreement will be different depending on the type of work your business carries out. Here are a few key things to include in your referral agreement:
A referral agreement can be a useful tool not only in building a wider network of customers but also in establishing long-lasting and trusting relationships with other businesses.
By working successfully with referral partners, you can reap the indirect benefits of a referral agreement too, such as having more time to focus on other areas of the business, increasing your credibility, and improving brand awareness.
You don't have to hire a lawyer to help you draft up your referral agreement, but doing so can be very beneficial. A referral agreement is an important document to get right, and a legal professional can help you to tailor it exactly to your business needs.
Alternatively, you can use a referral agreement template for Australia as a cost-effective way to make your life a little easier.
Before you begin writing your referral agreement, you must decide on the commission structure that you wish to implement, i.e. how much you are going to pay a business or individual for a referral and at what point.
Once you've settled on your compensation, here a few key questions worth keeping in mind regarding your referral agreement:
There are lots of online resources available that offer up a referral agreement template for Australia. Most will allow you to browse the template for free, but you may need to pay a one-time fee to edit and download it.
Here's where to find legal templates:
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