Finders fee for referrals

M

Matt Cardoni

New member
A local auto electronics shop contacted me about detailing for them. They currently do it in-house, but are looking to sub it out. We would like to have an arrangement where they just refer the customers to me directly and I would pay a finders fee to them. Does anyone here have an opinion on a fair number, probably a % of the job price? We discussed options of paying a larger fee for the first job, then any repeat business would have no fee. The other option is to pay a smaller fee each time the customer returns.
 
I think the best way to do business is by them referring you work, and when you're too busy you refer them work. It's really not in the best interest of your customers if other people are making money off the job behind the scenes. Just my .02
 
IMO doing something like that would be opening a can of worms. There can be problems like them claiming you are not being honest about the amount of work they send you and you are shorting them and other things like that. I think a business to business deal like that works best when it;s just "you refer people to me for detailing and I will refer people to you for electronics." Maybe each of you could have the other's banner or something hanging in your shop that people will see with a note next to it that says "highly recommended" or something.
 
I am in agreement with John about this. If they want to recommend you because a job is beyond their level to do, or because they are booked and they genuinely feel you are a quality person to be in concert with then that is fine. If you feel likewise they are a reputable company that does quality work then the arrangement can be mutually beneficial. This would be a sticking point for me. I would never want to refer a client of mine to someone in my local area. I would even work a Sunday to avoid it, and I have. If they were not local but out of or near Tampa then Garry Dean is who I would refer them to.



Referrals are a tricky thing. If the person does poor work, it IS a reflection on you on some level. How much you value that is your choice. I'd say no % behind the customers back. If you trust their work, then mutual referrals when you are too busy or they are is benefit enough.
 
+1.



If a mutually beneficial referral system is possible... great! I refer people to certain businesses because I believe them to be the best at what they do at a fair price. I get referrals for the same reason. If I get a large number of referrals from someone and haven't had the opportunity to return the favor through referrals I send a bit of gratitude another way. I am in no way obligated and they do not have an expectation. If they choose to refer people to someone else because they get a small %, I figure in the long run it will reflect on their reputation if the quality isn't there.
 
Only way the "referral" should really be paid is if you were to work out of their facilities using your business name, but using their facility as your workspace and area for you to get noticed by their customers. I realize this isn't a referral, but many smaller businesses work this way. I know a massage therapist that does something like this with a cosmetic surgery "hospital" and I believe has a 80/20 split with the hospital for any work done out of there.
 
I would say around 10-20% for the referal would be fair, Which probly works out in the ball park of spending $ on extra marketing to attract extra customers yourself so I think it can work well. I have a similar agreement with another business where they sub-contract their work to me and I do it at their shop using their equipment and thay pay an hourly rate, maybe thats something to look into.



Vehicle Detailing Adelaide
 
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