Author Topic: Paying for referrals?  (Read 748 times)

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Offline Todd Muskopf

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Paying for referrals?
« on: February 27, 2016, 06:51:42 AM »
It's common practice to offer a reward for referrals. 

A big question would be "does rewarding the sneezers for referring help or hinder future referrals?"

 I found that the "inner reward" of doing a good deed and helping my business is more important to my clients than giving them cash or prizes.  I've offered lots of money over the years, and I get more referrals by being appreciative.

What do you think?

Offline Darren Cassese

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Re: Paying for referrals?
« Reply #1 on: February 27, 2016, 09:21:39 AM »
I wish someone would run some hard stats on this over a 2 year period and report out.

Every time I feel they are working, I can't help but feel it is money that could be invested elsewhere to attract outside of that circle.

For me, a better reward is a discount on future service. But the question always remains as to whether or not this was a tangible nudge/call to action or if they would have acted anyhow on their own volition.

Overall, my general feeling is that if you have to spend a few bucks to get tangible action towards purchase, then it is worth it.
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Offline Jeff Behm

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Re: Paying for referrals?
« Reply #2 on: February 27, 2016, 10:00:27 AM »
Interesting.  One of my larger client's marketing director just booked her boyfriend with me for a headshot because his mom hated the one provided by the Naval Acadamy. She opened by say in "I have a small assignment, I don't even know if you're interested".  I do ad work for her family's firm, including corporate headshots.  When she inquired, I remarked that I appreciated her business and for such a good client, would knock off 30%.  She in turn was appreciative and told me there is a new project she's putting together now, and will be having me shoot.  It's a bit of an aside from the OP, but people like thinking they have some pull for friends, and are appreciated.  Think of the theme song from Cheers "where everybody knows your name".  They like to feel special in an impersonal world.  We can't knock 30% off all the time or for every occasion, but for friends of the business, who bring referrals, something unexpected goes a long way.

Offline Todd Muskopf

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Re: Paying for referrals?
« Reply #3 on: February 28, 2016, 06:21:48 AM »
My "hard stats" 

I do about 60 full senior sessions per year and a few dozen more short sessions, totaling about 100 seniors each year.

I'd been giving them each referral cards.  For giving out cards with their name on it, the recipient got $20 off their session and the people giving the cards got:

1st referral  $10
2nd referral  $25
3rd referral  $50
4th referral  $75
5th referral $100

So, they could make a lot of money for passing out cards.

I've been running this since 2009, but the chart on my wall shows the stats from Sep 2013 until I stopped the program in 2015, three seasons of seniors, so here's what's on the chart:

1st referral: 26
2nd referral: 9
3rd referral: 1
4th referral: 0
5th referral: 0

So, even with the sliding scale of increased rewards, the kids couldn't be bothered to get those referrals.

Bottom line--I think the cards were an afterthought.  I think it was "Oh, you're going to Todd? Hold on, I have a discount card".

So, there were 36 cards redeemed, so $720 taken off session fees and $530 paid out in commissions to the givers, and about $150 or so spent printing out the cards.

Now I just hand out business cards with NO discounts or commissions involved, and get just as many referrals.

« Last Edit: February 28, 2016, 06:23:19 AM by Todd Muskopf »

Offline Houston George

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Re: Paying for referrals?
« Reply #4 on: February 28, 2016, 09:52:04 AM »
I think you've discovered that satisfied clients are going to refer, not because you offer a monetary reward, but because they were happy with you and the service you provided. Speaking for myself, I'm not going to refer a family member or friend to someone who provided me a service that dissatisfied me no matter what the incentive.
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Offline Jenny Gavin-Wear

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Re: Paying for referrals?
« Reply #5 on: February 29, 2016, 03:56:38 PM »

I've thought a lot about this over the last year or so.  Currently I get more referrals from those who just like my work and want to see me succeeed than one or two who I have offered some benefit.  I'm nervous about offering any kick backs and the agencies that recommend me have even refused discounts offered.