# referral fees?



## treeman82 (Jan 3, 2006)

I normally never give anybody a referral fee. I figure that they will give out my name / number if they like the work I did and want to help my company grow. For the first time the other day a customer asked for a referral fee of $100 for a $1000 job. I said that if I got the job I would knock $100 off the bill he has with me right now.

So how do you guys treat situations like this? Do you give out the money or what?


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## begleytree (Jan 3, 2006)

Nope to customers. I have no less than 15 guys out there who do lawns and landscape, and I trade referals with them. They account for a lot of buisness, more than you'd think.
-Ralph


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## skwerl (Jan 3, 2006)

In my opinion, a 'referral' is a recommendation from somebody who wishes to see me succeed and prosper. Someone who wants me to pay them money for a job is a job reseller. They are looking to make money off of my work, essentially taking money out of my pocket in order to fill their own. Having to pay for a lead pretty much negates any idea of calling it a 'referral'.


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## treeman82 (Jan 3, 2006)

Brian, that's exactly how I feel. However you were a lot nicer about the "job reseller" description than I am.

I will leave whom exactly out of this conversation, but I did offer a couple of guys a 15% finders fee for any work they can throw my way. A couple meaning 2. The reason being that I have never done anything for them, and they have never done anything for me. So it gives a little incentive.

Otherwise if it's a friend or customer or whatever, I may throw something in when I do work for them, or buy them lunch, you know...


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## rfwoodvt (Jan 12, 2006)

Sometimes we'll do a limited time offer giving referral "incentives" to our customers. But, if a customer asks for one we'll politely decline.

Sometimes we offer referral fees to other "green" providers. Mostly tho, especially if they have a decent customer base and are looking to improve their service offerings, we'll give the "Green Industry" a wholesale rate, let them keep the customer as thier own. Saves headaches later on.


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## ASD (Jan 12, 2006)

"Green Industry" YES
customers NO


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## Dadatwins (Jan 12, 2006)

TreeCo said:


> If I'm going to pay a $100 referal fee to a customer...........they are dragging brush for the day!



Ditto that, and I am going to cut it small and stack it like matchsticks for pissing me off. Customer had some set to ask for the fee, ask him if he going to pay income taxes on the $$$.


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## Mike Barcaskey (Jan 13, 2006)

nope, even lost a friendship over it
a former buddy gave me the lead on a job and I ended up getting it. He approached me four times over a month demanding a kickback. even threaten to go to my wife. wanted 200 out of 1400. hell, that was just about all the profit. (underbid the sucker) no longer talk to him.


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## BlackenedTimber (Jan 13, 2006)

I got into a situation early on where a local contractor was setting me up with alot of residential work. It was great the first 3 or 4 jobs, but then the guy really started to scramble to find me work, i guess to increase his purse... anyway, the "customers" he started to drum up were all really difficult to work with, very demanding, and always trying to talk down the price. I was never able to collect from some of them.
I dont associate with that guy anymore.
I say find your own work.


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## BlackenedTimber (Jan 13, 2006)

Oh, I forgot to add: I spend very little on advertising, about 98% of my work comes from word of mouth. My customers tend to send work my way, without charging me a fee. I think as long as the pricing is fair, and you do good work, the jobs will find you.


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## jmack (Jan 22, 2006)

*referal*



treeman82 said:


> I normally never give anybody a referral fee. I figure that they will give out my name / number if they like the work I did and want to help my company grow. For the first time the other day a customer asked for a referral fee of $100 for a $1000 job. I said that if I got the job I would knock $100 off the bill he has with me right now.
> 
> So how do you guys treat situations like this? Do you give out the money or what?


 hey treeman 82 whats happening. a customer??? actually had da balls to say this ya need to shut this down immediatly. was it after the fact, they got wind that it was a thou and wanted a hunge? or were they trying to refer you in hopes it would be 1000


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## notahacker (Jan 22, 2006)

TreeCo said:


> If I'm going to pay a $100 referal fee to a customer...........they are dragging brush for the day!



I'm with Dan on that one.  

Also, if you are in the business of giving discounts you will have to maintain that you are a cheap service.


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## SilentElk (Jan 30, 2006)

Only referal fee I ever dealt with is I get a 1-2% referal fee for refering customers to a landscape friend of mine. Average landscape project I refer is about $5000 so $50 to $100 in my pocket but he usually justs give me some free rental time on his equipment instead which I preffer. You know how expensive it is to rent a S300 bobcat? As far as referals to me, I dont think I have everyone ask for a % BUT if the referer was a associate of mine, stump guys for example, I would make sure he got a real good price for the stumps I gave him.

Scratching each others backs is much better than a fixed rate as long as there is enough scratching to keep both sides happy.


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## daveyclimber (Jan 30, 2006)

Here is what I do , I have made many friends with workers at Davey Tree , ACRT , Power Company (PG&E) and such when I used to work at Davey . I give all persons willing to participate roughly 20 or 30 business cards and have them write their name on the back , When I work for a client I ask them how they heard about our company . If they have a card with one of the aformentioned names that person gets $50 unles the job is less than $250 . 

I don't mind giving kickbacks , I figure if someone is willing to pimp my company , they deserve a little slice of pie . There is plenty of money floating around out there and everybody works a little bit harder when there are incentives


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## ASD (Jan 30, 2006)

$50 unles the job is less than $250 said:


> hay if you give me $50 for every $250 worth of work (20%) you can have all of my customers


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## daveyclimber (Jan 30, 2006)

doing referrals the way I do generally will net me 3-4 jobs a month , so 150-200 dollars a month really isnt a big deal when your average job is $600 . Your looking at around a ten % fee on a way to get 15-20% of my work . Fine by me and it works


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## Tree Frog (Jan 31, 2006)

I prefer to give out gift cards instead of cash. Cash seems to be the root of all evil and changes the prespective of people. So with this I decided that if a customer provides me with a lead and had no ill attention of greed, I may supply them with a gift card, a new tree, a coupon for next year.

Personally if the customer demands that you give them a finders fee of such an amount then you may be better off not having them as a customer.


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## oldugly (Feb 1, 2006)

Some of my best customers are also my closest competitors. We don't really have a referral fee arrangement, but will give eachother jobs when we are too busy, or the other needs the work....Usually we just make sure the primary contractor, or customer contact gets somethng on the job.
Ex. I had a job for 650. and started a long term contract that wouldn't allow me to get it done before snow fell, so I gave it to another company that was hurting for work. He took it for 550, so we both made some money, although he did the work. He kept his crew fed another day, and I kept a satisfied customer,.... and beer money.


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## jmack (Feb 2, 2006)

*commish*



daveyclimber said:


> Here is what I do , I have made many friends with workers at Davey Tree , ACRT , Power Company (PG&E) and such when I used to work at Davey . I give all persons willing to participate roughly 20 or 30 business cards and have them write their name on the back , When I work for a client I ask them how they heard about our company . If they have a card with one of the aformentioned names that person gets $50 unles the job is less than $250 .
> 
> I don't mind giving kickbacks , I figure if someone is willing to pimp my company , they deserve a little slice of pie . There is plenty of money floating around out there and everybody works a little bit harder when there are incentives


they are not pimping you davey they are activly selling your service for a commision j


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## jmack (Feb 2, 2006)

*no way*



Tree Frog said:


> I prefer to give out gift cards instead of cash. Cash seems to be the root of all evil and changes the prespective of people. So with this I decided that if a customer provides me with a lead and had no ill attention of greed, I may supply them with a gift card, a new tree, a coupon for next year.
> 
> Personally if the customer demands that you give them a finders fee of such an amount then you may be better off not having them as a customer.


customer? no way i still can not belive customers are talking to you this way, "nice job your skills are excellent, if you give me money i will exploit you in hopes of more work from my freinds, and i will let you do all the hard dangerous work" shut it down!j


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## jmack (Feb 2, 2006)

*o/a*



oldugly said:


> Some of my best customers are also my closest competitors. We don't really have a referral fee arrangement, but will give eachother jobs when we are too busy, or the other needs the work....Usually we just make sure the primary contractor, or customer contact gets somethng on the job.
> Ex. I had a job for 650. and started a long term contract that wouldn't allow me to get it done before snow fell, so I gave it to another company that was hurting for work. He took it for 550, so we both made some money, although he did the work. He kept his crew fed another day, and I kept a satisfied customer,.... and beer money.


hey old and ugly, yeah it feels good to take care of each other.we won a city bid for 500,000 the next bid was 625,000 we knew they were a small outfit so it wasnt that off. the crews started working and were promptly accosted by a kook, the town knew him he had inserted himself as a naturalist, he had enlisted the help of a starryeyed firstyear forestry student for fancy footwork, a couple o science facts and a lot of smoke and mirrors, the guy crossed the line, when he began yelling at crews, distracting the op, and complaining and badmouthing us to the city.powderkeg. conferance call the next day we bought out for a dollar and we were happy to let the other guys have the work because we knew they were slow, we always checked in and found no one seemed to bother them, no refereal needed there, you just entered the world of colusion j


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## Tree Frog (Feb 2, 2006)

jmack said:


> customer? no way i still can not belive customers are talking to you this way, "nice job your skills are excellent, if you give me money i will exploit you in hopes of more work from my freinds, and i will let you do all the hard dangerous work" shut it down!j




You have a point jmack, allowing people to know that you give commissions on referals is a problem. I perfer to keep this ace in the hole. I am a firm believer in ethics and the fact that passing people's name around should not be a money producing adventure. 

Thus far the people that I have provided anything too never expected anything in return. I enjoy suprising people.

Thanks for the input.


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## Nickrosis (Feb 2, 2006)

Matt, I like your approach. This week we were bouncing around ideas about discounts and offers and such. A referral credit like you're talking could be a sweet thing. Say $25 up to $500 then $50 for any job over that - or whatever.



treeman82 said:


> I normally never give anybody a referral fee. I figure that they will give out my name / number if they like the work I did and want to help my company grow. For the first time the other day a customer asked for a referral fee of $100 for a $1000 job. I said that if I got the job I would knock $100 off the bill he has with me right now.
> 
> So how do you guys treat situations like this? Do you give out the money or what?


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## daveyclimber (Feb 3, 2006)

jmack said:


> they are not pimping you davey they are activly selling your service for a commision j




They are pimping ME , They are personal friends who offered to pimp me for free , I said thats nice , I will give you something for your time . They said thats great , I said thats great . You take care of those who take care of you . Thatnks for your interpetation


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## Nickrosis (Feb 3, 2006)

daveyclimber said:


> They are pimping ME , They are personal friends who offered to pimp me for free ,


 Does your family know this? Sorry...


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## daveyclimber (Feb 3, 2006)

Nickrosis said:


> Does your family know this? Sorry...




 Funny


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## jmack (Feb 4, 2006)

*davey whore fer cash*



daveyclimber said:


> They are pimping ME , They are personal friends who offered to pimp me for free , I said thats nice , I will give you something for your time . They said thats great , I said thats great . You take care of those who take care of you . Thatnks for your interpetation


 oh my!


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## B-Edwards (Feb 18, 2006)

I wont pay a dime for referral,,, I'll return the favor but pay NO


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## market (Jul 23, 2006)

daveyclimber said:


> doing referrals the way I do generally will net me 3-4 jobs a month , so 150-200 dollars a month really isnt a big deal when your average job is $600 . Your looking at around a ten % fee on a way to get 15-20% of my work . Fine by me and it works



one certainly can build a business model around paying for leads / referrals but i seldom hear of it. Paying say 10% of gross for business would seem like a manageable expense, if the referrer could supply a significant volume of business

anybody ever try online lead generation services like you see when you search for "tree service" or "your-city-here tree service"


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## woodbutcher44 (Sep 2, 2006)

the fact are there .ads cost $.If you are in a real competive area and the arangement is made for referal fees ahead of actual time of the est. .Thhen a %5 of the actual profit margin in very reasonable.
How ever if the aproch was made aftre tell the customer that you dont usualy do this and if they would like to help wiht expanding your business you will do so in on the next job.
you may find a very useful lead person.


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