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

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Originally Posted by mikeinreco

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

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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.

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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.

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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?

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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?

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

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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?

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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.

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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?

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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.

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Originally Posted by mikeinreco

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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again, that is what I did..

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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.

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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.

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Originally Posted by GeorgeB

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.

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???? Ive thought the same thing here recently if i started work for this big scrap yard and they have offered me a job in being head of electronics meaning im breaking down all his computers and i know where the best prices are im talking 10,000 or more boards wouldnt you want a referral fee from the buyer your getting your boss to sell to your talking lots of weight and youre delivering it too .I think the buyer should reward you for every 10,000lbs he should look after you very well

I've read this whole thread.. and this is what I think... My three pennies..

what I do.. I give out cards to people that bring in electronics scraps to our store, We've a storefront along with a recycle warehouse, and on the back of the cards, its says, 10.00 off of store purchase of 25.00 or more, or 25.00 bucks off for computer repair .. and it works really well, give them an option.. Giving out a flat referral, is not a good thing, lets say this person refer someone to bring in one computer ok You paid them 25..then another person brought in a computer there another 25. and lets say two more.. people brought in computer that was referred,, thats 100.00 that you just paid out... You're not going to make a hundred bucks on four or five computers.. so best to do an option..

again We sell, computers, repair computers, and recycle, and We fix phones.. and much more.. so We're able to do it, You might need to dibble with the referral fee, but don't over extend yourself put a min requirement so you can make money and not lose money..

here a good example.. sorry guys but just one more.

We offer five dollars off when people bring in a food donation... We've a min why... if they can only bring in a can that worth 25 cent its not worth the 5 bucks... So we put must bring in 4 cans of goods.. then it worth it ..

Good Luck in your decsion.

Are you getting any referrals now? How many do you think you will get if you were to pay the fee? Will you offer this fee to anyone or just big jobs that you think may have contacts to get you more?

I don't have a policy "in place", but I will always tell my regular computer guys that provide me with scrap that I will kick back to them if they can refer a load to me. Of course they know what I pay for scrap and if they can get it right they will just get it and then sell it to me.

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Originally Posted by hobo finds

Are you getting any referrals now? How many do you think you will get if you were to pay the fee? Will you offer this fee to anyone or just big jobs that you think may have contacts to get you more?

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Yes, I get referrals all the time. My referrals will come from past customers, or from people that I have talked to, that talk to others needing the service.

Most likely what I will do, is one of 2 options.

1. Offer a special discount off their own pickup for every individual that they refer, that gets a job done with VIP.

2. Once they refer say 4 or 5 people, then I give them a gift certificate to their favorite restaurant for dinner for 2 or their whole family, etc.

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Originally Posted by bnbsfsd

I've read this whole thread.. and this is what I think... My three pennies..

what I do.. I give out cards to people that bring in electronics scraps to our store, We've a storefront along with a recycle warehouse, and on the back of the cards, its says, 10.00 off of store purchase of 25.00 or more, or 25.00 bucks off for computer repair .. and it works really well, give them an option.. Giving out a flat referral, is not a good thing, lets say this person refer someone to bring in one computer ok You paid them 25..then another person brought in a computer there another 25. and lets say two more.. people brought in computer that was referred,, thats 100.00 that you just paid out... You're not going to make a hundred bucks on four or five computers.. so best to do an option..

again We sell, computers, repair computers, and recycle, and We fix phones.. and much more.. so We're able to do it, You might need to dibble with the referral fee, but don't over extend yourself put a min requirement so you can make money and not lose money..

here a good example.. sorry guys but just one more.

We offer five dollars off when people bring in a food donation... We've a min why... if they can only bring in a can that worth 25 cent its not worth the 5 bucks... So we put must bring in 4 cans of goods.. then it worth it ..

Good Luck in your decsion.

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I definitely get what your saying, and trust me when I say, that I have already decided that it wouldn't be something like that.

My minimum for scrap pickup is $35 to $40 depending on location, what I am getting, and how much work is involved.

So, most likely, it would be one of 2 options that I just mentioned.

I am still racking my brain.

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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.

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I asked a client what would be appropriate and he said they could not accept cash gifts. But if I bought lunch for the next managers meeting I could pitch my services to all of them.