What to Do When Someone Gives You a Bad Referral

Not all referrals are gifts. Some are grenades.

Someone in your network sends you a referral. You’re excited - until you get on the call and realize:

• They have no budget
• They’re not your target market
• They’re a nightmare client the referrer wanted to offload
• They ghost you after the intro
• They waste hours of your time and never buy

Now you’re stuck. You don’t want to seem ungrateful to the person who referred them. But you also can’t afford to chase leads that go nowhere.

This post is about handling bad referrals gracefully - protecting your time without burning bridges.

Types of Bad Referrals

Not all bad referrals are equal. Understanding the type helps you respond appropriately.

The No-Budget Referral: They want what you offer but can’t afford it. They’re not being dishonest - they just don’t realize your price point.

The Wrong-Fit Referral: They have money but need something you don’t do. The referrer didn’t fully understand your specialization.

The Not-Ready Referral: They’re just exploring. No urgency. No commitment. They’ll “think about it” for six months.

The Problem Client Dump: The referrer knows this person is difficult and is trying to pass them off to you. This is the worst kind.

The Ghost: They seemed interested when the referrer mentioned you, but now they don’t respond to emails or calls.

“A bad referral isn’t always bad intent. Usually it’s a mismatch between what the referrer thinks you do and what you actually do.”

Always Thank the Referrer

Here’s the rule that protects every relationship:

Thank the referrer regardless of the outcome.

They tried to help you. Even if the referral was terrible, the intention was good (usually). Acknowledging that keeps the relationship healthy.

Send a quick message within 24 hours of receiving the referral:

“Thanks for thinking of me! I’ll reach out to [name] this week and let you know how it goes.”

This does two things:

• It acknowledges their effort
• It sets up the loop-closing conversation where you can provide feedback

Linda Morales

Mortgage Broker

Morales Mortgage Solutions

Richmond, BC

Fictional character for illustrative purposes

“I get referrals from real estate agents that sometimes don’t qualify - credit issues, income that doesn’t verify, unrealistic expectations,” Linda shares. “In the past I’d get frustrated and say nothing. Now I always thank them immediately and then follow up with specifics later. The thank you protects the relationship. The follow-up educates them on what works better.”

The 15-Minute Qualification Call

Before you invest hours in any referral, do a quick qualification call.

The goal: determine in 15 minutes or less whether this is worth pursuing.

Questions to ask:

“Tell me what you’re hoping to accomplish.” (Do they have a clear need, or are they just exploring?)

“What’s your timeline for making a decision?” (Are they ready to act, or is this a ‘someday’ project?)

“What have you already tried?” (Have they done their homework, or are you starting from zero?)

“What’s your budget range for this?” (Can they afford you, or is this a waste of time?)

“How did [referrer] describe what I do?” (Did the referrer set accurate expectations?)

Based on the answers, you’ll know within 15 minutes whether to continue or gracefully exit.

“The 15-minute qualification call protects hours of wasted effort. It’s not rude to ask questions - it’s professional.”

Scripts for Declining Gracefully

When the referral isn’t a fit, you need to decline without offending the prospect or the referrer.

To the Prospect (Wrong Fit)

“Thanks for taking the time to chat. Based on what you’ve shared, I’m not sure I’m the right fit for what you need. My specialty is [specific thing], and it sounds like you need more of a [different thing]. Let me suggest a couple of people who might be better suited…”

To the Prospect (No Budget)

“I really appreciate you considering me. Based on where you are right now, my services might not be the best investment yet. Here’s what I’d suggest: focus on [earlier-stage priority] first, and when you’re ready to [next step], let’s reconnect. I’d be happy to help then.”

To the Prospect (Not Ready)

“It sounds like you’re still in the exploration phase, which makes total sense. I don’t want to push you before you’re ready. When you’ve decided to move forward, reach back out and we’ll pick up where we left off.”

David Park

Insurance Agent

Park Insurance Group

Langley, BC

Fictional character for illustrative purposes

“My time is my most valuable resource,” David explains. “I can’t spend three hours with someone who’s just shopping for quotes and has no intention of switching. The 15-minute call lets me figure that out fast. And when I decline someone, I always redirect them somewhere. ‘I’m not the right fit, but here’s someone who might be.’ That way they still got helped, even if not by me.”

Honest Feedback to the Referrer

Here’s where most people fail: they either say nothing (and keep getting bad referrals) or they complain (and damage the relationship).

The middle path is honest, constructive feedback.

When the Referral Wasn’t Qualified

“Hey, thanks again for connecting me with [name]. We had a good chat, but it turns out they’re not quite ready to move forward yet - still in the early exploration phase. No worries at all! Just wanted to close the loop. For future reference, the clients who are the best fit for me are usually [specific criteria].”

When the Referral Was Wrong Fit

“I spoke with [name] - great person, but what they need is more [different service]. I referred them to [someone else] who I think can help. Thanks for thinking of me though! Just so you know, my sweet spot is really [specific niche] - that’s where I can add the most value.”

When the Referral Was a Problem Client

This is tricky. You don’t want to badmouth anyone, but you also don’t want more of the same.

“I connected with [name] - interesting situation. We decided it wasn’t quite the right fit for either of us. If you run across anyone who [specific criteria of good client], definitely send them my way!”

The key: keep it positive, be specific about what you’re looking for, and don’t make them feel bad.

“Training your referral sources to send better referrals is part of the long game. Feedback should be constructive, not critical.”

When to Accept Anyway

Sometimes you should pursue a referral even if it’s not perfect.

For relationship value: If the referrer is a VIP in your network - someone who sends you lots of good referrals - it’s worth spending time on an occasional miss to keep the relationship strong.

For learning: If the referral helps you practice something you’re trying to improve, the experience might be worth it even if it doesn’t convert.

For future potential: Sometimes people aren’t ready now but will be later. Planting a seed with a not-ready prospect can pay off in 6-12 months.

For referrals from them: Even if they’re not a fit for your services, they might know people who are. A good conversation can lead to other introductions.

Sarah Martinez

Marketing Consultant

Martinez Marketing Group

Vancouver, BC

Fictional character for illustrative purposes

“Not every referral needs to convert to be valuable,” Sarah points out. “Last year I spent an hour with someone who definitely wasn’t going to hire me - startup with no budget. But she was well-connected, and I helped her with a few quick tips. Six months later, she referred me three paying clients. The original referral was ‘bad’ by any normal measure, but it turned into one of my best referral sources.”

The Problem Client Dump

Let’s talk about the worst kind of bad referral: when someone intentionally sends you a problem client because they want to get rid of them.

Signs this is happening:

• The referrer seems relieved to hand them off
• The prospect complains about their previous provider immediately
• They have unrealistic expectations from the start
• Something feels off in how the introduction was made

If you suspect this is happening:

Don’t take the bait. A client who was a nightmare for someone else will likely be a nightmare for you too.

Decline politely: “After our conversation, I don’t think I’m the right fit for what you’re looking for. I want to make sure you find someone who can really help.”

Consider the referrer relationship: Someone who dumps problem clients on you isn’t a good referral partner. You might need to have a direct conversation or reduce your investment in that relationship.

Building Better Referral Sources

The long-term solution to bad referrals isn’t better scripts for declining - it’s training your network to send better referrals in the first place.

Be specific about what you’re looking for: “I’m looking for [specific type of client] who are dealing with [specific problem] and are ready to [specific action].”

Share success stories: When a referral works out well, tell the referrer what made it great. “That client you sent was perfect - they knew exactly what they needed and were ready to move fast.”

Give feedback consistently: Every time a referral doesn’t work, close the loop with constructive information. Over time, your network learns what you actually need.

“The best defense against bad referrals is offense: be so clear about your ideal client that your network can’t get it wrong.”

From Frustrated to Strategic

The business owners who struggle with bad referrals are reactive. They take every referral, invest lots of time, and then complain when it doesn’t work out.

The business owners who handle referrals strategically are proactive. They qualify quickly. They decline gracefully. They educate their network. They build systems that protect their time while preserving relationships.

Same referrals coming in. Completely different outcomes.

Ready to Build a Better Referral Network?

We built Rhythm of Business to help professionals build referral relationships with the right people - partners who understand your ideal client and send you quality referrals.

Weekly visibility keeps your referral sources updated on exactly who you’re looking for. Industry exclusivity means you’re working with complementary professionals, not competitors sending you rejects.

Build the referral network that respects your time.

Related Reading

• How to Give a Referral That Actually Converts - Be the referral source you wish you had
• How to Politely Decline a Referral Request - When someone asks you to refer them
• How to Say Thank You for a Referral (Templates That Work) - Even for the bad ones