Referral Fee ???

[Pats300zx]

I am looking for some Autopian advise. I have been approached by the service manager in a high end car dealership for detailing work. The service manager contacted me directly and stated that he has several clients that are looking for quality detail work. The manager has seen some of my work on one of the client's cars that I recently detailed when it was in for service and asked for my name and contact info.



The service manager would like to refer clients to me. In exchange, he is asking for a referral fee. I have not gotten to the point of asking what amount the fee would be. The arrangement would be between myself and the manager and would have nothing to do with the dealership.



I see several advantages and disadvantages to this and am looking for some input.



Advantages:



1. All of the cars would be high end or exotics.

2. The clients could turn into potential long term clients

3. I could pick and choose what I wanted to work on.



Disadvantages:



1. The fee could cut into the amount of money that I would make on a detail and would cause me to increase pricing to offset the fee.



Any thoughts???

 

[reaper34]

first I would try to find out what kind of fee he wants, I think that would make things alot easier to decide.

 

[backwoods_lex]

You could pay a referral fee in the beginning, as long as it is small, develop a customer base, and then just work from there without needing any referrals. You could consider it the cost of advertising. Since I am new in the business, I would definitely go for it in order to break into the field of exotics.



It's a little shady that the guy is trying to make cash this way off the books. You would think that the service manager at a high end dealership would just reccomend you based on the quality of your work, but maybe that's just me. Good luck!

 

[Envious Eric]

I see why thought, maybe the detailers there arent as good as him, and he wants to sell the best services to his potential customers, so he says go to XYZ detailing...



Maybe $20-$25 per car???? that is what I give my clients when they send me new work...



I will be watching this thread because I have to make a proposal to detail out of a busy stereo shop, and have to give them a cut of the detailing proceeds...they originally said something like $50 from each car, but I am going to change that real quick...they are asking for almost 40%...no way that is going to go down

 

[imported_DJ Mayo]

$20 per car that he brings you. Tell him that could be 10% for doing nothing in some cases.

 

[RTexasF]

Whatever you decide on make it clearly understood that this will be a ONE TIME fee for referring NEW customers only. If you convert some of them into regulars he gets nada.

 

[Pats300zx]

Whatever you decide on make it clearly understood that this will be a ONE TIME fee for referring NEW customers only. If you convert some of them into regulars he gets nada.

Oh definitely. Thats one of the advantage I see to doing this. Longer term clients.

 

[mixxer]

hey pat do you own your own shop? I would say a fair fee would be 5- 10% of the total price of the detail he sends you.

 

[dublifecrisis]

I have no real knowledge when it comes to running a detailing business, but in times like these, I would be willing to give someone 10% for consistent business. Recession jitters, mortgage writedowns, and the "credit crunch" mean a lot of people are tightening the wallet. Paying to get a car detailed might end up a lot of folk's list of expense cuts.

If after a year, the guy is STILL sending clients your way, I might even mail him a Christmas gift. These types of deals are what some entrepenuers dream about.

 

[Pats300zx]

hey pat do you own your own shop? I would say a fair fee would be 5- 10% of the total price of the detail he sends you.

No..I only do this part time on the side. 10% was what I was leaning towards.

 

[David Fermani]

Watch out Pat! I know this guy is the manager, but if his superiors find out, he could get fired for a conflict of interest. I use to give "bird dog" payments to many people at dealerships, but it was out in the open and the General Manager knew too. Great idea, just treat it like a business and you'll be ok. Remember to make it worth while (financially) for the person to refer you the work and worth while for you to do it. Mark it up to cover your increased expenses.

 

[imported_weekendwarrior]

Pat, I don't know what you charge, but let's assume $250 for a detail for a daily driver...interior clean-up, wash, clay, AIO via the rotary, hand applied sealant/wax, tires, wells dressed, wheels cleaned, and trim and glass detailed. I would offer the guy this job, as a freebie once a year for his personal car (or his wife's car). If you offer him $25/car, and he gives you 15 referrals, that's $375 you are paying him, versus giving him the $250 (again, an assumed price) freebie, that would probably only take you 6 hours.

 

[Twista616]

I feel its a win win either way! Look at it like this, he's willing to give out your information for a small fee. You have to give to recieve. Plain and simple. If he has some people that need good work, he gives them your information. Its their job to contact you...not his. So, if they contact you, you can sell them whatever you need to cover that small fee. I think $25 flat is perfect since he won't know if you sell a full correction or not. If you do 10% of a $600 correction, your only paying $25 verses the $60 at 10%. If you take a smaller job, it might hurt you there, but either way i would do it!



Its the whole chain effect there after, that person will tell atleast 3 other people...and so on...

 

[salty]

H*LL $50 a high end customer is cheap. Raise your prices and do flawless work. High end work is hard to come by.

 

[imported_Denzil]

In all honesty Pat, let your work and current clients do the advertising for you man. It's free and doesn't cost you anything. Are you short on your current clientele base?

 

[Pats300zx]

Are you short on your current clientele base?

Not at all. It just seemed like a good opportunity.

 

[KnuckleBuckett]

It is a good opportunity and a compliment. Sure the guy is a bit of a sleeze, however, as long as you play it square, I don't see an issue.



I would work out a flat rate of sorts. Maybe a flat rate varying with the number of referrals.



If you gave us some rough numbers we could probably help a bit more.



I am sure you can make this a positive opportunity.

 

[imported_rydawg1]

I would do it Pat! Think of it as he works for you to get you high end jobs.

 

[ajnavo61490]

Whatever you decide on make it clearly understood that this will be a ONE TIME fee for referring NEW customers only. If you convert some of them into regulars he gets nada.

+1



i was about to type that, then i found out someone already beat me to it! :ignore

 

[imported_Denzil]

Not at all. It just seemed like a good opportunity.

Heh, well it seems that everyone with the exception of me is in support of this idea. I'm not outright saying it's a bad idea at all but I figured it's much better to go with free advertising especially considering the amazing results of the cars you work on.



If you can work something out where you'll make an exponential amount of money and clientele base in comparison to your "investment" (paying that manager's cut), it would definitely be a great investment. I just hope you don't become overwhelmed with potential customers/regulars and that whatever leaves that manager's mouth in "advertising you" is clean advertising and doesn't oversell you, so to speak. :xyxthumbs