Referrals

Discussion in 'Business Operations' started by grassmasterswilson, Sep 21, 2012.

  1. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,468

    Got a buddy helping me do some seeding/aerating. He thinks he has some jobs he might bring my way. Thinks it would be mowing, applications, or seeding.

    What kind of referral fee would you pay?
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  2. ToddH

    ToddH LawnSite Silver Member
    Posts: 2,197

    Friends do not charge friends referral fees.

    Lunch and good times are often in order :drinkup:


    Acquaintances maybe.. One value of one service after about the 3rd service perhaps but you need to see what kind of client they are going to be too. :waving:
     
  3. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,468

    You wouldn't pay a friend a referral fee if he wanted to cold call or talk to some people/business owners? Doesn't cost you a thing unless you get the job.

    What would you pay a sales person if you had one? Flat few on acceptance or percent of gross?
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  4. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Posts: 1,405

    In the current state of the economy, adding the cost of a referral fee to an estimate could break the deal with the potential client.
     
  5. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,468

    I would only pay the referral of he brought me the work, it was accepted, and we did it
    Posted via Mobile Device
     
  6. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Posts: 3,466

    Helping as in paying him or helping as in doing a favor helping you out?
     
  7. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,468

    What I'm trying to say is.... I have a friend who is out of work and needs some extra cash. He loves to talk with people and knows a lot of people around town. I've told him I can only keep him busy seeding for a short time and when the work runs out I can't keep him on. He has talked about reaching out to some people he knows and trying to get some more work, estimates, etc.

    I told him I would pay him a referral fee for any jobs that he brought my way and I got. So he is strictly on commission and only gets paid based on a accepted estimate. He uses his own care, phone, etc. at no cost to me. Very similar to customer referrals that I do(give the customer a discount for referring a friend/neighbor).

    So what do you think the going rate for referrals is? 10%? flat $50-100? Just curious what rate would motivated him without breaking the bank on my end.
     
  8. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    The way you are framing it now sounds more like a commision as he is cold calling.
     
  9. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    I think you need to ask how salesmen are paid to get landscape work.

    Then you leave out that if any new work he brings in will he be working on those jobs as well.

    Then you leave out how much you net on these jobs. $5, $50, $500 impacts how generous you can afford to be because it appears you have empty slots in your schedule that your friend would be filling up.

     
  10. gcbailey

    gcbailey LawnSite Silver Member
    from WV
    Posts: 2,552

    never really called it a "referral" or "finders fee" but one of the other LCOs we work with, our unwritten rule is.... if we get a contract client (minimum 10 day service) then we'll pay for a dinner for his family (Outback, Cracker Barrel....). Always just a nod of the hat to show appreciation.
     

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