11 replies to this topic

[royhill]

I have a couple of close acquaintances who in their professional and personal circles have the opportunity to network with people who use my type of services. Generally these are people that work for large corporations who have several layers of "defense" before you can get to see them (if ever).

I would like to "encourage" them to hand out my cards with either a flat fee or a % of each 1st order. If a % it would need to be on the gross and not my net as I don't want them to know what I pay.

Anyone do this type of thing? Any suggestion who be appreciated.

I tried a search and didn't really find anything for this.

Thanks - Roy

[aapromotions]

I would have no problem giving them a fee. Why not, it's business you probably wouldn't get. But one caveat. I would not do it if the referral or lead they were giving you was from the company they worked for. It could be considered 'stealing' from the company.

It doesn't rise to the Peter Madoff level of stealing but, if anything, not ethical on their part.

[djoctagone]

What happens if you pay a referral fee after a sizable order's booked and the customer takes 90 days to pay?

I'd be more interested in exploring how you can help your close acquaintances grow their business or endeavors if they help you. This could include heavily discounted promotional products from a pre-specified core group of preferred vendors.

Click on the tags below for more ideas.

[aapromotions]

Obviously the fee would be paid after the client pays the bill. It's not like they are working for the distributor and if I read this correctly have their own jobs or professions.

Money talks and ............... walks. Money is a good incentive and if done with a little bit of thought will generate business. I do it and it always works.

[royhill]

Thanks for the replies. As Allan said, the fee would be after the order was paid for, and yes they have their own careers. It would be understood about orders from with-in their own organizations would not be part of this as I already do work for them, however these individuals are not in the position(s) I deal with and I do not intend to get involved in any "kick back" scheme within any company. However they mix with "higher ups" or owners of other companies and could possibly get me in the door.
I have given small thank you gifts to others in the past but these people could continuously feed me leads to whom they've recommended me to and the leads are actually calling me or awaiting my call.
Allan, could you tell me how you do it? What % or how much flat? I want to be fair and keep them doing it without breaking the bank. Thanks again - Roy

[ScottH]

I guess I'm different. My business is built completely on referrals (very little advertising and haven't made a cold call in 10 years).

I hope that clients value my services enough to pass my name along without any financial incentive to them. I do give small gifts occasionally for referrals and really should have a 'program', but I seem to do fine without it. I think most of my clients would be almost offended if I offered them money for a referral. I just referred one of my clients to another client for photography, and I would never expect from the photographer anything more than a 'thank you'.
Personally, I think it's a slippery slope.

[aapromotions]

Scott, I get a bunch of referrals from clients. I don't think we're talking about those type of referrals. I offer a monetary percent to those who are working and out there and have nothing to do with anyone I'm doing business with. It's usually to independant reps of companies, that want to pick up another 'line'.

Not sure where the slippery slope comes in.

[royhill]

Allan, you're right again...the people I'm talking about are not my clients, they just happen to work for the same companies I do business with in other departments. One did help me get in the door at his company years ago and I think I took him out to dinner, but we have had dinner before as we were friends.

Scott, like you most (if not all) of my business comes from referrals. When exsisting clients reffer me I send them a thank you and possibly a small gift (with my logo) and let them know I'll continue to give them the best value for thier $s as I have before. Thanks -Roy

[MRI Suzanne]

I have been paying a few friends for referrals. I give them a % of the net profit of the orders I get from their referral forever. I have been thinking about changing that to a % of the FIRST order from their referral, though.

[ToddRas]

Be careful for paying for referrals!! Like other people have said it's good to reward clients who pass along your information, but it's not like imost clients are out looking for business they can send you.

Once you start offering "paid" referrals you might be wasting your time on worthless opps just because your friend or client wants to get paid. I have seen this happen to a rep I know and his relationship with his current client was damaged because the client thought they desereved more from the referral.

Just something to keep an eye on!!

[MRI Suzanne]

You're right. These are not referrals from clients. I wouldn't want to start that, you're right. These are referrals by friends that result in an order only. However I only pay if they order and I receive payment, and it is only a percentage of THAT order's net profit. I would never pay for just a referral.

[robster1]

Interesting post.

I think a pay-for-referral might work best for a networking group--but not for employees of clients that you already do business with. This seems a bit of a slippery slope, as someone mentioned in a previous thread.

Anybody care to share what percent is reasonable for a paid order--5%; 10%?