Retail Referrals

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We are a small business and have been asked to partner with a local flooring company. They want to refer our company to their customers and in return we would give them a percentage of the jobs completed that they referred to us. Is there a standard percentage that we should give them for referrals?
 

Desk Jockey

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I think a set amount for a minimum and one for average jobs would save a lot of bookkeeping. Just for example $25.00, $50.00.

It would keep it simple
 

jcooper

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We are a small business and have been asked to partner with a local flooring company. They want to refer our company to their customers and in return we would give them a percentage of the jobs completed that they referred to us. Is there a standard percentage that we should give them for referrals?


They should be happy to have someone who will do a great job, not need kickbacks. I wouldn't give a lot.
 

ruff

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$25.00 - $50.00 if you have a reasonable (for you, so you still make some money) minimum charge and if a one time deal (just the first job), is a very inexpensive way to get a new client, possibly for life.
Nothing wrong with it, actually a good move.

And if they are referred (recommended) by the dealer, they are less likely to deal with price resistance.
Go for it.

Don't compromise on the minimum charge, as they will have you run for "just a little stain", every other day. After a few years you'll see how many turn into good repeat customers and can decide if to proceed.
 
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Ron K

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It's a two way street you know.
Well said.
I just cleaned the showrooms once a year when they referred clients.
Relationships should be built on trust not payola!!
Another cleaner could just come in and give them a bigger %, then what happens to you.
 
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The Great Oz

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They should be happy to have someone who will do a great job, not need kickbacks. I wouldn't give a lot.
I thought so too, until the recession. We found that all of our great retail friends that really loved us sold their referrals to anyone that would pay.

The flip side of the argument is: What would you have to pay a salesperson to bring in that work? What are your marketing costs per $100 of return? Paying the retailer 5% of the first visit to that customer might be the cheapest/best marketing investment you make. ...And, you're in the home of someone that made a new furnishing purchase recently and trusted their retailer enough to call for a referral. Might be a good lifetime customer.

Ofer makes a good point about sticking to your minimums, and you should not get involved in "free inspections" to check out a problem or you'll become their unpaid customer service rep.

Good luck!
 
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BIG WOOD

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I have a local company that I partner with and our agreement is for me to pay them 10% of the job IF it goes over $150. So if it's just a little $75-$125 minimum job, then there's no referral fee.
 

ruff

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.......
Relationships should be built on trust not payola!!
Another cleaner could just come in and give them a bigger %, then what happens to you.

"Relationships should be built on trust not payola!!"- Ron, I understand the sentiment and knowing some dealers I definitely know where it comes from. However- Trust is earned not given. If they get the chance they will have the opportunity to earn the trust and potentially new clients for life.

"Another cleaner could just come in and give them a bigger %, then what happens to you."- Nothing. They did not have these clients to begin with. And the clients they have already done (given- at a discount) are still theirs. Nothing to lose unless they are super busy as it is and need to take on some debt for new equipment.

On the other hand it is not a bad idea to get a sense of what kind of a place they will be dealing with and are they worth the hassle. Intuition, experience and the ability to carefully listen are good business skills.
 
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ruff

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Great Ron, you took two words out of an entire post and I'm supposed to relate?
The short answer is no. However read the whole post.

Lets take your statement as an example:
.. refer .. only .. kick-back

Why Ron, I appreciate your candor.
Most may :icon_redface: while making such a brutally honest statement about their own business practices, but not our Ron :winky:
 
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Ron K

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The "two words" were just to tell you I responded to your post.
Thats the only way I know that someone responds to my response.
Honestly I think you get what I mean... when I refer someone it's my (reputation and name on the line) thats all you got as a business I don't feel $50.00 bucks is worth it.
JMO You coming up for the ARCS of Seattle?
If so I'd love to show you a word lass ORG grummpany or we can just get baked!
 
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ruff

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Didn't know that about the short quote. Makes sense. And here I got all worked up :winky: :hopeless:

Ron, I know exactly what you mean and agree.

However, the original poster asked about paying a fee for getting the work. She is not referring but want work referred to her. And even if the source does it for money, she can still make long term clients out of these clients. She is getting a foot in the door, the rest is in her hands.

Given, these referrals do not always fan out to be the best of clients (been there done that), but some will. As I specified, unless there's some expenses or issues not discussed, and if a reasonable minimum is applied, there's nothing to lose and some potential gain.

Not coming to ARCS, though I'd love to. Just a carpet cleaner. Thanks. Let me know if you come to Northern CA.
 
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ruff

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Lookie lookie at the above comments.
Chavez & Sutley the tweedledee and tweedledumb of Mikey's board.


tweedledee-tweedledum-2.jpg


We'll just have to guess which is the second.
Any bets?
 
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