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EliteImpressions
11-07-2004, 10:04 PM
I have been giving local companies some of my business cards to hand out. I promised them 4% of the profits I make from customers that reference their name. Does anyone do this? And if so, how do you determine how much to give them. I was thinking that a set price of $20 or so per customer would be more appealing.

Stuttering Stan
11-07-2004, 10:16 PM
4% of "profit" sounds small. What if you only made $100 profit off a small job, $4 isn't much.

HOOLIE
11-07-2004, 11:19 PM
What sort of companies are you doing this with? Retail, contractors? Anyway, I don't know that I'd necessarily offer them anything. I swap business card with some of my customers who own their own businesses. Just do it to help each other out.

If you were to offer some kind of finders fee, I'd make it a one-time payment, versus an ongoing percentage of profits.

Lanelle
11-08-2004, 01:17 AM
That could become quite an accounting burden if it were successful---especially for maintenance accounts. How long would this 'finder's commission' be awarded? Seems that referring clients is a matter of good will and then occassionally remembering the business person who has sent customers to you is the way to go. Depending of the level of business generated by the referrals, a gift card to a local restaurant or tickets to a sporting event might be a nice 'thank you.'

jerryrwm
11-08-2004, 01:30 AM
One large LCO in central Texas would pay a bonus or basically a commission for finding them new business that signed an annual contract. They paid equal to one month's revenue from that account which amounts to about 8.3% commission. They paid out the commissions quarterly. Made sure that the new customer was going to stay with them and that there was no funny business going on.

tonygreek
11-08-2004, 11:32 AM
as stutter said, 4% of "profit" sounds small. anytime you throw in the word "profit", it's open to interpretation. if you are set on doing commissions, i'd go with gross. the first time you send someone their check for 8 bucks that they think probably generated you thousands, will probably also be the last check you send them.

tony

Team Gopher
11-08-2004, 11:11 PM
Hi EliteImpressions,

Here is a quote from this post (http://server2.lawnsite.com/showthread.php?t=87049).

"We give anywhere from 5-10% commission on accounts we get like that. Now most of those are high end accounts where we can just add that to what we would normally charge and noone knows the difference. I get with individual managers when I can and cut them checks 3 or 4 times a year based on grass sales from their referrals."