paying for referrals

One thing that a few friends/relatives have been telling me to consider lately, is to offer a cash referral to people who refer business to my company, but that whoever they refer, MUST get a job done with my company, for them to be eligible for the referral fee.

In a way, I believe this to be a good idea.

For those of you who have thought the same idea, or have done it in the past, was a straight fee better or a % of the contract amount?



I was thinking of doing like $25 or something like that.

Or to even offer $25 off their own junk removal job, for each person they refer that gets a job done with us.

I used to pay 10% of profit off any job that I was reffered to

Originally Posted by mikeinreco

I used to pay 10% of profit off any job that I was reffered to

That is not bad. However, I think a flat cash referral of $25 or even a certificate of $25 off their next junk removal would be sufficient.

Originally Posted by GeorgeB

That is not bad. However, I think a flat cash referral of $25 or even a certificate of $25 off their next junk removal would be sufficient.

Geo why ask the question if your just going to say what your going to do anyway after someone answers your question on what they do?

Originally Posted by PartTimeScrapper

Geo why ask the question if your just going to say what your going to do anyway after someone answers your question on what they do?

I'm tired but that is still funny as hell.......George are you making money scrappin????........

Originally Posted by PartTimeScrapper

Geo why ask the question if your just going to say what your going to do anyway after someone answers your question on what they do?

1. Why a lot of people ask certain questions on here, the way they do. To see what others are doing, to see if it is better or worse then what they are doing.

2. I never said that either way is the way that I have already decided. Mikeinreco, said that he used to pay 10% of the profits from a job. So I simply said that a $25 certificate off their next job with my company, or $25 cash sounded sufficient to me. Besides, if someone referred a job, and you made say $50, then their referral is only $5...not a lot of people will see that as worth while.

Originally Posted by mikeinreco

I'm tired but that is still funny as hell.......George are you making money scrappin????........

If I wasn't, I wouldn't keep the business open. No sense to keep a business running if your not pulling in any profits.

Originally Posted by IdahoScrapper

LOL


Hey GB, what about a $25 gift card to their favorite restaurant? Might make a better impression and they'll think of you again when the need arises.

That is definitely a thought for sure. Depending on where you go at around here, the $25 would take care of the entire meal.

Another possibility is a $25 gift card to a cash station, gives them some cash for gas if their running low.

Thanks for some suggestions/ideas.

Just trying to come up with as many ideas/thoughts as possible before I set things up.

Just my too sense here, but as a member of BNI we have found that paying for referrals is mostly ineffective and does not leave a favorable impression of your business.

Sorry for those of you who don't know, BNI stands for Business Networking International, the worlds largest networking organization. BNI has weekly meetings and the entire purpose is to bring referrals for one another. Look online for a chapter near you.

Originally Posted by BurlyGuys

Just my too sense here, but as a member of BNI we have found that paying for referrals is mostly ineffective and does not leave a favorable impression of your business.

Burly,

I am not saying that I disagree with you, but I do believe this is all possibly dependent on how you go by doing it, and perhaps the type of business you have.

I know a few company's in my area that will pay when people refer others to them, and the referrals get work done. It is just their way of simply saying "thanks for spreading the word!" etc

I do understand where you are coming from though. People might view as "Well ****, that company sucks so bad that they have to pay people to bring business to them" or something similar.

Suppose it all depends I guess.

I tried my referral idea about a year ago. However, I put an add for a "partner" someone who know a few places already that we could scrap from, and we help one another out. I had close to 30 replies, but instead of those people actually wanting to work with me, they just wanted to tell me where to get stuff from, and I give them a cut lol.

2. I never said that either way is the way that I have already decided. Mikeinreco, said that he used to pay 10% of the profits from a job. So I simply said that a $25 certificate off their next job with my company, or $25 cash sounded sufficient to me. Besides, if someone referred a job, and you made say $50, then their referral is only $5...not a lot of people will see that as worth while.

So if you got a $50. job and you give out a $25. referral, then where is your profit?? That's where the 10% would make more sense.

Originally Posted by Whm1

I think for it to be a benefit you need to offer what someone wants/ needs. If you go with a discount on trash removal, you make out, get more business and don't payout unless they act on giving you $, but it gives no incentive. If they have money to pay for trash removal, then why worry about finding someone else for a $25 off coupon. Go with cash, or if mailing...gas card. Anything else starts wasting your time. $20 cash is worth more to more people than $100 off of something they may not want or may not be able to afford.

Because with the way the current economy is, people are all about saving and being tight wads. You would be surprised on how my junk removal jobs I see posted on craigslist every week, where people want a $300 job done for $65 etc.

Originally Posted by Mechanic688

So if you got a $50. job and you give out a $25. referral, then where is your profit?? That's where the 10% would make more sense.

That is why I would change my submission pages a little bit, so if it is a referral, they can list the name and number of the individual who referred them. So then, when I make the bid, I add the fee into it.

Originally Posted by GeorgeB

One thing that a few friends/relatives have been telling me to consider lately, is to offer a cash referral to people who refer business to my company, but that whoever they refer, MUST get a job done with my company, for them to be eligible for the referral fee.

In a way, I believe this to be a good idea.

For those of you who have thought the same idea, or have done it in the past, was a straight fee better or a % of the contract amount?

I was thinking of doing like $25 or something like that.

Or to even offer $25 off their own junk removal job, for each person they refer that gets a job done with us.

Useless post is useless.

If you already know what you are going to do then do it. If you want people to tell you about their referral programs then ask them straight out.

George their is a post on this forum where common sense is the biggest thing in this business. So many of your posts are severely lacking in such.

I often wonder how you are successful in the business you are in.

Originally Posted by drozenski

If you already know what you are going to do then do it. If you want people to tell you about their referral programs then ask them straight out.

George their is a post on this forum where common sense is the biggest thing in this business. So many of your posts are severely lacking in such.

I often wonder how you are successful in the business you are in.

In regards to your first sentence, try re reading my original post as that is what I was doing. Asking others who have done referral programs, what has worked best for them.

And no, I do not know what I am already going to do. That is the whole point in getting ideas and learning from others that have done it, if it was worth the effort or a waste.

I agree, common sense is the biggest thing in any business. However, common sense also tells you that if your unsure of something, or don't know, then ask, and what better person/people to ask then those who have possibly done it themselves already.

In regards to your last comment about my success. I have been in this business for roughly 4 years, and in my re business for longer than that. Must be doing something right.

You also must be successful when you keep getting contacted by the same clientele wanting to do more business with you, they refer their friends, colleagues, family, etc over to you, which in turn gives you more clientele, when corporations of all sizes pick you over the competition that has been in business for over 20 years, and then keep on contacting you.

When clients are so grateful that you accepted to their job, when major companies like 1800gotjunk refused to do the job.

I think you get the point...

A business is a road, littered with forks, traps and treasure to pick up.

It is up to the person running that business to pick what fork to take in the road, what treasure to pick up and when to realize when they picked the wrong fork and go a different way before they fall into a trap.

They will make these decisions 100's of times a day. The successful ones are rewarded and the others, well you know.

George,

Pick your forks, grab your treasure and continue. If you are at a fork and need advice then ask. But dont pick road #2 then ask people if it was the right choice. Ask before you make your decision.

Before cash I would look for a bartering option. The referrer gets something useful free instead of buying at retail, and I unload some junk.

I recall seeing some news about stores deducting value from gift cards if they're not used for a while.

Originally Posted by drozenski

A business is a road, littered with forks, traps and treasure to pick up.

It is up to the person running that business to pick what fork to take in the road, what treasure to pick up and when to realize when they picked the wrong fork and go a different way before they fall into a trap.

They will make these decisions 100's of times a day. The successful ones are rewarded and the others, well you know.

George,

Pick your forks, grab your treasure and continue. If you are at a fork and need advice then ask. But dont pick road #2 then ask people if it was the right choice. Ask before you make your decision.

again, that is what I did..

Originally Posted by charn

Before cash I would look for a bartering option. The referrer gets something useful free instead of buying at retail, and I unload some junk.

I recall seeing some news about stores deducting value from gift cards if they're not used for a while.

Well, unfortunately for that, a lot of what we get is plain junk. Place, most people dont want to wait around for something that we may never find. Most will want something now, and not a year later.