31 {{ upvoteCount | shortNum }}
31 {{ upvoteCount | shortNum }}

How much do you give as a referral fee?

by sadiecopywriter
19 replies
Okay, so this website designer I know calls me and says that he's got some one interested in my writing services.

I talk to this person and it turns out this guy is interested want to hire me for a big job. I want to give my web creator friend a referral fee, but I don't know how much to give him.

Is there a standard amount for referrals like this? I was thinking 10%, but I don't know if that's enough...:confused:

What's typical in this situation?
#fee #give #referral
  • Profile picture of the author Jason Kanigan
    I stay away from cash as a reward for referrals. One of the things I do for accountants is develop non-monetary rewards for their referral systems.

    I do my best to send business back to the referring person, if I believe in what they're doing. Reciprocity works.
    Signature
    >> How To Grow Your Online Business [FREE Training Video, No Opt-In, from 10+ Year Vet]

    >> For Agency Founders: The Fast Shortcut To Selling SEO, Leadgen, Webdesign & Other Services
    {{ DiscussionBoard.errors[5384132].message }}
  • Profile picture of the author Kunle Olomofe
    The question is were you offering a referral reward to generate this sale or did they just think of you and send you a prospect? if the latter and you want to reward them ask them what you can do to say thanks. If they want cash only you can decide what to give them based on what you charge and how much your profit is per job etc.

    There is no standard, but I personally go for 30% of my PROFIT NOT COST PRICE, it's generous and will get you repeat business. If they did it as a friend, be grateful, say thanks and return the favor asap.
    Signature
    Celebrity Marketing Formula - How To Quickly Become A Celebrated Authority In ANY Industry/Niche... Coming Soon.
    {{ DiscussionBoard.errors[5384334].message }}
  • Profile picture of the author Steve Solem
    I would think anywhere from 10% - 25% would be reasonable, but you should consider how much this project is worth and what you would typically need to spend to get a new client.

    Remember that one good referral like this can result in a client with a lifetime value worth possibly thousands, and they could also refer you to other possible clients too.

    Cheers,

    Steve
    Signature
    Need Offline Leads? Get them more easily with two great Lead Gen reports and 65 pages of quality PLR PLUS flyers, postcards and other marketing materials. Starting at under $5!
    {{ DiscussionBoard.errors[5384528].message }}
  • Profile picture of the author ErikNilsson
    Just Give him 25% It is reasonable.He may add you to other clients also in future..
    Signature
    USA Bank Account + ATM Card for Non-USA Residents Service PM me
    {{ DiscussionBoard.errors[5384693].message }}
  • Profile picture of the author RRG
    Depends. If you have holes in your schedule and want more business, offering strategic partners a 20% commission and actively promoting that opportunity to them can bring you a lot of extra business you wouldn't have had otherwise. And, since people referred to you by a trusted friend or associate are less likely to be price shopping, you could even quote a higher fee to help absorb the commission.

    Worst case: 80% of something is better than 100% of nothing.
    {{ DiscussionBoard.errors[5384723].message }}
  • Profile picture of the author txsigma41
    I usually do 10-15%, and havent had too many complaints from partners.
    {{ DiscussionBoard.errors[5394326].message }}
  • Profile picture of the author imanbahrani
    I run an SEO agency here and have many virtual sales people (think friends, collegues, clients, other contacts) constantly referring us with new clients because we are very generous with the % referral (we give 60% of first sale). They get their money and we get a whole fresh pool of clients who are worth ,000's in the long run....win win situation
    Signature
    GUARANTEED Rank Boost or Your Money Back
    {{ DiscussionBoard.errors[5394937].message }}
  • Profile picture of the author serena85
    If you pay him or her a decent amount of money, you are getting recommended for sure to others.
    {{ DiscussionBoard.errors[5394980].message }}
    • Profile picture of the author Dan Ashburn
      I typically give 20% of my profit margin however it depends on who it is. If the person who has referred me is someone I know can bring me business time and time again I will increase this amount whereas if it is a friend who happened to mention me to a mate in the pub I will stick low as it was in conversation and he wasent thinking of the money and is grateful when I offer him a cut...
      {{ DiscussionBoard.errors[5395355].message }}
      • Profile picture of the author Jgregory
        I don't offer a bounty for referrals. But I do keep up regular communication with satisfied clients asking for referrals from their colleagues... just an introduction.

        Here's some old school advice on getting those Referrals... and I still use it. And 32 years have passed since a mentor taught me the value of saying Thank You with style.

        + Buy a packet of very expensive Thank You cards with matching envelopes... heavy linen cardstock.

        + Keep this with you at all times. Within 1 hour of receiving the referral, write a sincere thanks in your handwriting.

        + Drop in a $20 gift card from Starbucks, Amazon. or Barnes & Nobles.

        + Find a Post Office and get it in the box right away with First Class stamp. Do not wait.

        My briefcase always has the supplies to do this at a moments notice.

        Best regards,
        Jan Gregory

        PS I do not wait to see if I sell a deal to the referral. It's not about payment or profit. Send the card immediately and do it each time you get a call from a client or friend.
        Referrals are the finest kind of lead.

        If the business is high-ticket then kick it up a notch. I've given clients $100 bills right from my wallet. Sent their wives to a day spa holiday on my company's tab.

        Even arranged to grab the check on an anniversary dinner once by calling the couple's favorite restaurant ahead and giving them my credit card for the meal. Never forgotten and often remembered.
        Signature

        Smile Big. Eat Well. Laugh Often.

        {{ DiscussionBoard.errors[5396546].message }}
  • Profile picture of the author iAmNameLess
    Jgregory is pretty right... I have offered $200 per closed lead I have received from friends... but I have noticed what goes even further is a thank you package. A giftcard, thank you card, take them to a football or baseball game. A personal approach is great.
    Signature
    {{ DiscussionBoard.errors[5397182].message }}
    • Profile picture of the author Jgregory
      Originally Posted by iAmNameLess View Post

      Jgregory is pretty right... I have offered $200 per closed lead I have received from friends... but I have noticed what goes even further is a thank you package. A giftcard, thank you card, take them to a football or baseball game. A personal approach is great.
      I agree with you... its the personal aspect of a Thank You that really counts. Deep down inside we spend our lives longing for closer connections, it's what makes us human. The thought is truly what counts most... a personal Thank You is a clear signal that another person is truly thinking about you and paying attention to you and your life.

      That personal invitation to a football game will be remembered long after a cash payment drops through the cracks

      Relationship building is key to building a long-term business... that's the bottom line for using a personal approach.
      Signature

      Smile Big. Eat Well. Laugh Often.

      {{ DiscussionBoard.errors[5408113].message }}
  • Profile picture of the author jjjust007
    20-30% cash. Cash is always best. Cash will spend for anything that is needed or they want, Gas money, Lunch money for the kids, Picking up something quick for dinner. Put it in their hand give them a big smile and tell them thank you! They will talk about you to every client they can think of without you having to to say anything.
    Signature

    Joe

    Live Phone Calls To Your Business!

    {{ DiscussionBoard.errors[5400492].message }}
  • Profile picture of the author Awesomo
    10% is reasonable. I give 10% for referrals too.
    Signature
    Get my free traffic report now! ===TRAFFIC SEIZE===
    {{ DiscussionBoard.errors[5411210].message }}
  • Profile picture of the author pattyolarkin19
    Hi I just started brokering mortgage notes and I was wondering if it`s a good idea to offer realtors a referral of 20% for locating note holders .Any thoughts on this?
    {{ DiscussionBoard.errors[5863819].message }}
    • Profile picture of the author RentItNow
      Originally Posted by pattyolarkin19 View Post

      Hi I just started brokering mortgage notes and I was wondering if it`s a good idea to offer realtors a referral of 20% for locating note holders .Any thoughts on this?
      Check the legality of this first. Also ask a few agents in your area the usual take. I know one place was paying in gift cards, trips and laptops to get around certain rules. You are going to get most of your referrals from 1 or 2 agents this way, make sure they are happy with your arrangement to keep the money flowing.
      Signature
      I have no agenda but to help those in the same situation. This I feel will pay the bills.
      {{ DiscussionBoard.errors[5864006].message }}
      • Profile picture of the author want2knowhow
        It looks like the referral reward system is die hard in the minds of the giver; strong belief's in monetary rewards and strong, card & gift giving rewards in the minds of others. For me, I'd fall into the latter category with the belief that it does builds strong allegiances with the receiver. I've sent cards with candy/brownies or with a $50 gift card (and that was just to family) and they were ecstatic, because it came on their birthday.

        That's what will be done for business referrer's and each year another will be sent (as well as during the year on holiday's). Trust me, the one they will really love is the $100 gift card for the Thanksgiving/Christmas holiday season!

        P.S--Wine is a tricky thing to send because each wine is different and if you send the wrong one (bitter not sweet...sweet not bitter)....it will definitely leave a (bad) taste in their mouths!
        Signature

        {{ DiscussionBoard.errors[5988933].message }}
        • Profile picture of the author kat57
          10-15% has worked well for me.
          The reciprocity thing...not so much. It is too intangible at times
          and one or the other person may feel slighted.
          Pay the man and you are square, on to the next one.
          {{ DiscussionBoard.errors[5990147].message }}
  • Profile picture of the author RentItNow
    I know real estate is 25% for fellow agents which is what i usually live by. However, if it is someone I do lots of referrals for we just reciprocate.

    Saying that, I actually had a guy tell me "I have all the business in the world, why would I need another customer! Gimme a bottle of Jack!"
    Signature
    I have no agenda but to help those in the same situation. This I feel will pay the bills.
    {{ DiscussionBoard.errors[5863976].message }}

Trending Topics