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Incentives for referrals?

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  • Incentives for referrals?

    How many people give incentives for referrals, such as,"If I close on a job through your referral you get $10 off your next service call?"

    I ask for referrals, but would I get more if I sweetened to pot? I know they come with time, but as many of you know we were primarily excavating (septic install) contractors until a little over a year ago, when we went into pumping and sewer and drains, so we are still trying to get the ball rolling on the service side.

    What's everyone's experience?

  • #2
    Re: Incentives for referrals?

    I neither ask nor pay for referrals. Yet 99% of all new customers
    come from them. If you're good people will be proud to refer you
    as "my plumber."


    • #3
      Re: Incentives for referrals?

      It's very seldom that when I receive good service from a company that I don't at some point refer that company to a family member or friend. I doubt if any kind of monetary incentive will bring in more business than just doing a good job day after day will.
      Teach your kids about 30 percent of their ice cream.


      • #4
        Re: Incentives for referrals?

        I wouldn't do it.


        • #5
          Re: Incentives for referrals?

          If I'm going to give an incentive or a break on price, it's going to be on my terms, not because someone is dangling a potential new customer for us.

          I believe once you start doing that, the customer believes your prices are negotiable as well, and I'm not Monty Hall.

          All of our referrals come to us because of honesty first, so there is no need for us to use these practices.


          • #6
            Re: Incentives for referrals?

            Had a guy refer me to a couple people..Asked me if I " paid finders fees"..I told him sure "tell the deadbeat you referred me to to pay me"...I don't think I will ever have to do that meaning "pay for referrals"..I told the same guy if you refer me to someone and they don't pay will you help me recoup my losses ..I think he got it
            Last edited by OLD1; 03-11-2011, 01:10 AM.
            ''Beer is proof that God loves us and wants us to be happy" Benjamin Franklin


            • #7
              Re: Incentives for referrals?

              I pay nothing for referrals. Exchanging money creates bad blood. Especially when referring other contractors. Someone is always expecting something.

              As mentioned, people love bragging about finding a great plumber. They like the fact that they can call someone and not get cheated, ripped off, or have a crappy job done.

              I am starting beekeeping this payout? Home grown organic honey. Cause my customers are the sweetest!


              • #8
                Re: Incentives for referrals?

                As a customer I like the concept of "a finders fee" for referrals....
                The reality is I do not like the idea of being a pimp for your business.
                So..don't do it.

                If I have someone work for me and I'm satisfied with their work it is just
                human nature to recommend that person if asked "do you know anyone who..?"

                I'm the type of person who does not like coupons, rebates, or any other scam to
                separate us from our money!

                You provide a quality product for an appropriate price and I'll be the first to
                drop your name to anyone asking for a referral.

                Now, behind the scene, I'd keep track if a customer has presented your company with
                worthwhile referrals and then when they call for your services give them some sort of discount as "a good customer" etc.....without bringing up a referral payment .

                Cactus Man


                • #9
                  Re: Incentives for referrals?

                  I have gone back and forth on this but I agree with Old1 . Who knows what is going to happen after the fact.


                  • #10
                    Re: Incentives for referrals?

                    We don't pay for referals or give contractor discounts or give cash discounts. As was aformentioned, it makes it seem like your price is negotiable. Mine is not.


                    • #11
                      Re: Incentives for referrals?

                      Referral fees no but you should have some sort of recognition policy in place to thank the customer for the referral. Something simple as a Thank you card in the mail will do more for you then any $10 kick back ever would.

                      Recognition of the lead could be an email, thank you card in the mail, a phone call etc. When I was selling water softeners for EcoWater it was imperative to us as sales people to show appreciation to previous customers for their recommendations which resulted in sales. After a deal was closed and we were paid it just made good sense to recognize the customer who referred us.


                      • #12
                        Re: Incentives for referrals?

                        In California it is written(law) that $5 is the maximum a contractor can give as a gift. I don't like gifts from customers or other contractors for any reason, they think they are buying a favor.

                        I did accept a gift from a long time customer, they offered to pay for my contractors license. Money was tight, baby on the way, I took the bait. I will feel bad once I do get my license and raise my rates, I will loose 95% of my customers, but "hopefully" this will open the door to better and bigger opportunities.
                        We don't have preventative maintenance around here, we have CRISIS MANAGEMENT!