When To Pay Referral Fee?

Discussion in 'Lawn Mowing' started by clallen03, Apr 21, 2007.

  1. clallen03

    clallen03 LawnSite Senior Member
    Messages: 514

    My referral policy is if a client refers me to someone that signs a yearly contract I will give them a $25 American Express gift card. I give them because I also get points when I purchase these cards.

    The question is when do you'll think I should give the client these gift cards. Im trying to make sure the new client doesn't sign up and cancel after I have paid out the referral fee.

    I was thinking giving them to clients around the 6 month mark of the new clients contract. This way I have recouped my cost and have seen some profit at this point.

    What do you'll think?

    Thanks a bunch
  2. jray3369

    jray3369 LawnSite Member
    Messages: 58

    I would and have been thinking about it and say "if you get me a yard i will take $25 off one weekly mowing on the first of the following month. If its a samall $25 yard theres not to much lost and if its more you still can cover some expense. vs. the gift card is all money you have to come up with... even though it all come from the same place... Id say after three mowings...
  3. clallen03

    clallen03 LawnSite Senior Member
    Messages: 514

    I prefer to give cards or cash instead of my time. My hourly rate is $45 but on most lawns I get more then that because I'm pretty efficient. Also when I work I really hate to feel like I'm working for free, and thats how I feel if I don't get paid for a service I provide.
  4. Mark in MD

    Mark in MD LawnSite Senior Member
    Messages: 322

    I wouldn't make it too gimmicky.

    If you are rewarding your steady customer for a referral, I'd do it right away.

    However, I"d only have a program like this if I was trying to aggressively expand my customer list.
  5. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    You do it right away. look at it like this....If you have a customer that gives you referrals, and one that doesn't,...who is most probable to give you another referral? If you give it to them right away, you MAY be giving them incentive to give you ANOTHER referral while they still have time. Again,...there are two different type of customers in the category. There are those who give referrals, and those who don't If you have one that does, you should take care of them. If for some reason, the new one doesn't work out...so what? What are you out? 25 bucks? You will make that back...besides that, let's face it...chances are better than not, that it WILL work out.
  6. jdlawn

    jdlawn LawnSite Member
    from MO
    Messages: 68

    You should give the gift card right away. and I think since you are getting these people to sign a contract that all you have to do is put a $25 (or more) fee if that new customer wants to cancel the contract. Then you don't loose that $25 and your regular customer gets the referal $ right away.

    Just my .02
  7. Ravenwood Landscaping

    Ravenwood Landscaping LawnSite Member
    Messages: 117

    I agree here. This is that extra service that many people are lacking in this business. Yea, you might get shafted once or twice but really your talking about $25 increments. They don't add up that fast that it should pose a financial problem to your business if it doesn't work out. More than likely the reference is going to make you money in the end. It's that whole give a little to get a little theory.
  8. pclawncare

    pclawncare LawnSite Senior Member
    Messages: 991

    I dont know a whole lot about taxes and stuff i let my accountant worry about that stuff but couldnt you write these off as an expense similar to advertising cost and stuff. Just a thought maybe a dumb one but a thought

    HOOLIE LawnSite Gold Member
    Messages: 3,981

    You should give the gift card fairly soon, within a week or two to have it make a positive impact. Whether the new customer cancels or not...that has nothing to do with the referring customer. Not their fault.

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