In an earlier post, I mentioned that some freelancers offer referral incentives and a few people asked more about this. I don’t have a formalized referral bonus program, though I’m likely to send you a nice card, maybe even an Amazon gift certificate if you refer me to a great new client. I’ve given and gotten plenty of referrals but never given or gotten an official bonus or incentive.
Personally, I think you should refer people to one another because you believe in them and want to bring people together, not because you want your $500 or whatever the case may be. (Some people do a lump sum referral bonus once certain conditions are met, others give a percentage of the project to the referrer.)
But maybe I’m missing something. Maybe you’re a freelancer or a small business owner who’s used a referral bonus program to turbo charge your business? Or maybe you’ve gotten burned by this arrangement? Either way, I’d love to hear your thoughts on the topic!
Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net
I’ll be interested to see other peoples’ comments here too! I’ve never offered a referral bonus, but on a similar note, I do occasionally offer a “first time” reduced rate for new clients who come to me for copyediting of their scientific manuscripts.
I’ve worked independently as a designer and writer for nearly 35 years. From my perspective, a referral is a common business courtesy – not an additional income stream. Like you, I am always quick to show my appreciation for a referral from others, but it is usually in the form of a handwritten thank you note and small gift selected specifically with the other person in mind.
For many years, I had a very successful – and mutually beneficial – business relationship with a marketing professional. We collaborated on projects and referred potential clients to each other. Out of the blue, one day he says he has a referral for me, but he is EXPECTING a “finder’s fee” for sending the client my way. It didn’t end there. I was also told he felt he DESERVED a percentage commission for all future work with the possible client, as a sign of my appreciation. I was stunned. I felt the individual came across as incredibly greedy and unprofessional, and let him know so when I ended our business relationship of 10+ years. His actions told me that, in what was a bad economic climate, his business was suffering financially and he felt it necessary to rely on the work of others to bring in added income.
I often say, in regards to my own business, that “it’s not that I don’t play well with others; I just want to choose where, when and with whom I play.” In this particular case, I no longer wanted to “play” with this individual. One of the great benefits of working independently is that it is your own business and you get set the rules. One of the rules I’ve chose for my own efforts is to not participate in the practice of accepting/paying referral fees. I much prefer recommending the great work of others as a courtesy while doing business.
Jeff, thank you SO much for weighing in! I absolutely agree that this marketing person sounds a little desperate. Perhaps those terms would work if they were couched a little differently. Then again, there’s karmic pay-off for giving referrals, so maybe that’s enough.
My clients have always provided referrals freely, and free. In return, I always make sure to do the referral-back-scratch when I can with designers and web designers.
There was one occasion where a longtime client asked for a one-off 10% kickback on an enormous project. I did so willingly and gratefully, because unfortunately he’d gotten aced out of the design side of the project. But it was only because of the relationship, and the fact that we’d partnered on so much business over time, that I agreed to do it.
I think it depends on the structure of a given deal. Someone who was always looking for a finder’s fee would not probably last long as a client—unless they were securing projects well above my customary rate! If someone bills me out at $150 and takes 10 or 20 bucks, that’s just business, eh?
My friends and I have a fairly simple system. Depending on each person’s preference, we usually would treat each other to a simple drink (coffee/tea/pulled tea or teh tarik in Malaysia). XD Mine would usually be at least 2 referrals, while some of my friends may treat right after the referrals sign a confirmed contract.
It’s not obligatory but it is a nice gesture. Plus food in Malaysia is always appreciated.
I don’t have a formal system, but I do like to treat colleagues who refer someone to me to a cup of coffee, a glass of wine, or a meal. That way they feel well thanked and we get to spend some time together, talking shop or business.
I had my first-ever referral earlier this year and I was so pleased that I gave my client one free hour of services to put toward a new project. She appreciated the gesture but I wasn’t 100% satisfied with it because it could be perceived as me trying to hook her into hiring me again (and I’d like to be more subtle than that!). In the future, I think I’ll send a small gift or invite my client out on a coffee date. Thanks for the great ideas!
Erika.
I remember a Creative Director friend of mine gave me a $100 gift certificate for Tower Records after I sent a copywriter his way. At the time, $100 was a *huge* sum of money, and it was so unexpected.
I do like to thank friends and colleagues who have sent work my way. One friend introduced me to the client that kept my mortgage paid and my children fed for the first year after my divorce. As soon as I could afford to, I bought him a gift card to a local restaurant and wrote a card thanking him not only for the referral, but for his moral support during such a rough time.
If the referral comes through someone who doesn’t want to be thanked, I make a donation in the person’s name to a cause I think they’d like.
Dana