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Fair Kickback/Referral Fee?

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  • #16
    Re: Fair Kickback/Referral Fee?

    We do not pay kick back or referral fees. Nor do we accept them.

    However, we offered a local drain cleaner all of our drain cleaning calls in return for a $10.00 fee per call. Our reasoning is this, if the call came from our yellow pages, it cost us to get that call. We answered the call, collected the info. (and qualified) the customer, then called him with the info. We followed up with customers to make sure they were happy. He did not want to offer anything to us- and this was a steady flow of business.

    Instead, we invested in better drain cleaning equipment and now advertise that fact. We were trusting him with our customers and new customers, therefore, we felt entitled to something for the risk we were taking. along with our time in handling the call.

    Hope this helps to see another point of view.


    • #17
      Re: Fair Kickback/Referral Fee?

      Originally posted by Plumbcrazy View Post
      We do not pay kick back or referral fees. Nor do we accept them.

      However, we offered a local drain cleaner all of our drain cleaning calls in return for a $10.00 fee per call.
      Call me stupid or something, this is the same but your just labeling it another name . $10.00, is very reasonable though.
      Great Link for a Construction Owner/Tradesmen, and just say Garager sent you....

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      • #18
        Re: Fair Kickback/Referral Fee?

        Garager - I separate the two this way.

        No referral / kickback - If a customers asks "Do you know a good electrician?" I give them a recommendation and expect nothing in return. I don't call the electrician, I don't follow up with the HO etc. On a bathroom remodel, we recommend other trades and have them work directly for the HO. They do the same for us. No kickback, no referral. Working with other good trades is in our best interest.

        Administrative fee- I am providing a service. For a new customer, they get set up in our system (+ I have spent time qualifying/diagnosing the call, making the appointment, follow-up etc.) The drain cleaning company will respond to my call for service much faster than if the customer called direct. For existing customer - the call is logged in their history. Drain cleaner works for many different plumbing companies so the chance of him recipricating is very slim. Without any sort of fee, it would not be worth our while to get involved and risk customer calling back with "Mr. Draincleaner was late, took too long, charged too much etc."

        We have since found a drain cleaner who is very happy with this arrangement.

        Hope you can see the difference between the two.


        • #19
          Re: Fair Kickback/Referral Fee?

          Originally posted by DUNBAR View Post
          I sent some guy tons of work when I got busy with my 2nd biz,

          still waiting on that percentage based check he told me I'd be getting for all the work he gained in that move.

          Instead of money, I like to bank favors over cash. Seems to be very well thought out because then you can instantly obligate them to do something for ya because you lined their pockets.

          That beats green bills hands down imo.

          Got a check last week for 5% of the calls I sent the company. Wasn't much but it at least pays me for time on the phone doing the shuffle.

          He went on to add that they also got the job doing a replumb for a bakery locally.

          Every little bit helps I suppose and the follow-through was a compliment to the relationship.

          Now with others that I do referrals money. One fringe benefit was the use of a camera this past weekend. That had a tremendous value.

          The other guy is a drain cleaner that gets my neck out of a noose when I'm too busy and willing to trust him with one my customers without losing them.

          But I always feel that when I ditch a call, it's gone permanently. Not the end of the world but sometimes that has to happen.
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