Write a letter directing a colleague to refer a client to another company. 

Dear Sir/Madam,

This is to thank you for referring <referred client> to us, but we are sorry to inform you that our (name of Company) does not provide the proper kind of <products/services> to meet <referred client>'s needs. Therefore, I have referred this client to another company more suited to <his/her/their> circumstances.

We, at (name of Company) certainly have great appreciation for your referrals and continued recommendations, but we don't wish to inconvenience your customers by having them come to us when we can't help them. Therefore, kindly refer any contacts who need <product or service you don't provide> to <alternative company name> at <alternative company number>, where their needs will be catered to.

I thank you again for the kind referral, and look forward to the our continued association.

Regards,