Comments on: Is Paying Referral Fees Wrong? http://bly.com/blog/general/is-paying-referral-fees-wrong/ bly.com direct marketing blog Thu, 08 Jan 2009 14:03:31 +0000 http://wordpress.org/?v=2.3.1 By: Ryan Gotham http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-674968 Ryan Gotham Fri, 14 Nov 2008 21:31:20 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-674968 It's been explained to me by a former FBI agent that the difference between a kickback (illegal) and a referral fee is that the referral fee is disclosed to the idividual who is ultimately going to pay the bill. ie; if a homebuilder pays a referral fee to a real estate to be recommended to the homebuyer to build a house then that fee should be dislosed to the homebuyer or it is a kickback. It’s been explained to me by a former FBI agent that the difference between a kickback (illegal) and a referral fee is that the referral fee is disclosed to the idividual who is ultimately going to pay the bill. ie; if a homebuilder pays a referral fee to a real estate to be recommended to the homebuyer to build a house then that fee should be dislosed to the homebuyer or it is a kickback.

]]> By: Rebecca Toering http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-674893 Rebecca Toering Thu, 30 Oct 2008 05:53:12 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-674893 Do you have to be licensed at all to get a referral fee? How about an agreement between friends? Fee is so minimal and just for a short time. Do you have to be licensed at all to get a referral fee? How about an agreement between friends? Fee is so minimal and just for a short time.

]]> By: Tina http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-647317 Tina Wed, 19 Dec 2007 04:34:32 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-647317 Bob, I just happened upon this while trying to search for info about referral fees. My husband and I own a very small custom cabinet shop and have recently agreed to accept referrals for residential work from another cabinet shop in town that only does commercial work. At first we were just happy to get the work, however it is now wearing on us and we are debating tonight about whether we will continue. Some of the problems with this set up are the following: 1) Price increases to customer as the fee must be addeded into the job. 2) The company referring our company is only doing it for the money, they don't care who they refer if they will pay. 3)Generally the referral is just a person calling in from the phone book and they happen to be in the #1 position. We actually refer other trades that we know do exceptional work and would never ask nor take a referral fee from them. This is our way of taking care of our customer base. So in short I agree with Bob, however when you are trying to make it in business a referral sure helps pay the bills...even if there is a fee. Tina Bob,
I just happened upon this while trying to search for info about referral fees. My husband and I own a very small custom cabinet shop and have recently agreed to accept referrals for residential work from another cabinet shop in town that only does commercial work. At first we were just happy to get the work, however it is now wearing on us and we are debating tonight about whether we will continue. Some of the problems with this set up are the following: 1) Price increases to customer as the fee must be addeded into the job. 2) The company referring our company is only doing it for the money, they don’t care who they refer if they will pay. 3)Generally the referral is just a person calling in from the phone book and they happen to be in the #1 position.
We actually refer other trades that we know do exceptional work and would never ask nor take a referral fee from them. This is our way of taking care of our customer base.

So in short I agree with Bob, however when you are trying to make it in business a referral sure helps pay the bills…even if there is a fee.
Tina

]]> By: JanDuan http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-613656 JanDuan Sun, 18 Nov 2007 12:34:36 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-613656 7 brand new PSP titles have also been announced and they’ll be made available via the new network. These <a href="http://game-world2008.blogspot.com/" rel="nofollow">downloadable games</a> include three action titles, two musical titles, a racing title and a shooter, suiting every gamer’s tastes. If you own a PSP, you’ll be able to access the new content with the aid of a Wi-Fi connection or through your PC connected via USB. Keep in mind that the new titles will be shorter than the usual UMD games, but we’ve seen blockbusters ranking high in game reviews, although they only took up 200MB of storage space. US gamers might get a surprise for Christmas, as the PC compatible version of the PSN will become active this winter. Care to guess what those 7 titles are? I’m hoping for Kingdom Hearts: Birth by Sleep demo, or a brand new Ridge Racer, although I won’t be surprised to see NFS ProStreet surfacing on the PSP this winter. Sony’s finally doing something to catch up with the Xbox Live and the Wii’s similar service, but as long as there’s no daily update and the lag’s omnipresent, the PSN will still be number 2… or even 3. <a href="http://game-world2008.blogspot.com/" rel="nofollow">Source</a> 7 brand new PSP titles have also been announced and they’ll be made available via the new network.

These downloadable games include three action titles, two musical titles, a racing title and a shooter, suiting every gamer’s tastes. If you own a PSP, you’ll be able to access the new content with the aid of a Wi-Fi connection or through your PC connected via USB. Keep in mind that the new titles will be shorter than the usual UMD games, but we’ve seen blockbusters ranking high in game reviews, although they only took up 200MB of storage space.

US gamers might get a surprise for Christmas, as the PC compatible version of the PSN will become active this winter. Care to guess what those 7 titles are? I’m hoping for Kingdom Hearts: Birth by Sleep demo, or a brand new Ridge Racer, although I won’t be surprised to see NFS ProStreet surfacing on the PSP this winter. Sony’s finally doing something to catch up with the Xbox Live and the Wii’s similar service, but as long as there’s no daily update and the lag’s omnipresent, the PSN will still be number 2… or even 3.
Source

]]> By: Kenny Lindsay, Auctioneer http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-454075 Kenny Lindsay, Auctioneer Mon, 30 Jul 2007 03:53:21 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-454075 The best way to say "Thank you" is with a check. The best way to say “Thank you” is with a check.

]]> By: carlos on web http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-135710 carlos on web Sat, 22 Jul 2006 08:54:45 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-135710 The ideas here are certainly helpful. I have just started a new software development company ( again ;-) ) in the Philippines. We do have people who come to us and are excited to refer us some potential clients. In the past, I did give referral fees as a way of saying thank you. The ideas here are certainly helpful.

I have just started a new software development company ( again ;-) ) in the Philippines. We do have people who come to us and are excited to refer us some potential clients. In the past, I did give referral fees as a way of saying thank you.

]]> By: Chris Gregory http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-129534 Chris Gregory Fri, 14 Jul 2006 10:05:26 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-129534 Greetings from London, England! I agree with Bob's original post: how objective can one's recommendations be if they're 'colored' by the promise of a fee? If you're going to make vendor recommendations where you'll get a fee for doing so, then the least you can do is make it clear at the time that you've got a financial stake in whose services (and products) you put forward. I take no fees from any vendors I recommend -- and make this clear to clients at all times. I'm sure that's one reason why they value my input, and why I get so much word-of-mouth business. Chris Gregory Greetings from London, England!

I agree with Bob’s original post: how objective can one’s recommendations be if they’re ‘colored’ by the promise of a fee?

If you’re going to make vendor recommendations where you’ll get a fee for doing so, then the least you can do is make it clear at the time that you’ve got a financial stake in whose services (and products) you put forward.

I take no fees from any vendors I recommend — and make this clear to clients at all times. I’m sure that’s one reason why they value my input, and why I get so much word-of-mouth business.

Chris Gregory

]]> By: Robin J. Elliott http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-123750 Robin J. Elliott Wed, 05 Jul 2006 21:21:29 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-123750 Hi Bob After 19 years in business, I insist on paying referral fees and getting paid. It works well for me and I truly believe that people appreciate what thy pay for and that ultimately in a Capitalist society we should be rewarded for the value we create. Every siuccessful Joint Venture I have been involved in has been based on a firm foundation of generous reciprocity. People lave a fortune on the table when they're too weak witted or timid to demand compensation. When they realize that they justify their position. Pay and get paid, is what I say. Hi Bob
After 19 years in business, I insist on paying referral fees and getting paid. It works well for me and I truly believe that people appreciate what thy pay for and that ultimately in a Capitalist society we should be rewarded for the value we create. Every siuccessful Joint Venture I have been involved in has been based on a firm foundation of generous reciprocity. People lave a fortune on the table when they’re too weak witted or timid to demand compensation. When they realize that they justify their position. Pay and get paid, is what I say.

]]> By: Lisa Taylor Huff http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-111263 Lisa Taylor Huff Fri, 23 Jun 2006 21:00:53 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-111263 It's a tough call. Up until recently I never considered entering into an arrangement where others would refer clients to me with the expectation of receiving a referral fee. I don't refer to others just to get referral fees either. Most of the referrals I get are from people who are just serving their clients and that's enough for them. Sometimes I will do something "extra" for one of my referrers as a Thank You but in each case I determine what Thank You looks like: it might be a credit toward future services (existing web clients love this), a gift certificate to Amazon, and once I took a colleague and her husband to dinner when they were visiting my area because she really had sent me quite a lot of business and I wasn't able to reciprocate the same level of referrals. On the other hand, I do think there are situations where, if both parties can set it up right, a cross-referral or a fee-based referral situation could work out very well for both, without there being ANY ethical dilemma... as long as you really sincerely believe the other person is offering a quality product or service that will be helpful to someone else. And let's face it, if you can find the right referral partner and it helps you build your business, AND the clients are getting what they need, then who is being hurt by that? So, while I don't - and won't - accept referrals from people who "expect" to be paid, I am open to coming up with some sort of "thank you" arrangement if someone takes the time to send me some business. I think it's only polite, if nothing else. It’s a tough call. Up until recently I never considered entering into an arrangement where others would refer clients to me with the expectation of receiving a referral fee. I don’t refer to others just to get referral fees either. Most of the referrals I get are from people who are just serving their clients and that’s enough for them. Sometimes I will do something “extra” for one of my referrers as a Thank You but in each case I determine what Thank You looks like: it might be a credit toward future services (existing web clients love this), a gift certificate to Amazon, and once I took a colleague and her husband to dinner when they were visiting my area because she really had sent me quite a lot of business and I wasn’t able to reciprocate the same level of referrals.

On the other hand, I do think there are situations where, if both parties can set it up right, a cross-referral or a fee-based referral situation could work out very well for both, without there being ANY ethical dilemma… as long as you really sincerely believe the other person is offering a quality product or service that will be helpful to someone else. And let’s face it, if you can find the right referral partner and it helps you build your business, AND the clients are getting what they need, then who is being hurt by that?

So, while I don’t - and won’t - accept referrals from people who “expect” to be paid, I am open to coming up with some sort of “thank you” arrangement if someone takes the time to send me some business. I think it’s only polite, if nothing else.

]]> By: Hidden Helper » Blog Archive » Bob Bly and referral payments http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-108563 Hidden Helper » Blog Archive » Bob Bly and referral payments Tue, 20 Jun 2006 01:40:41 +0000 http://bly.com/blog/general/is-paying-referral-fees-wrong/#comment-108563 [...] One of my Bloglines favorites is Bob Bly’s blog. Today I posted a comment to his post: “Is paying referral fees wrong?” . Basically, the question was whether being promised referral fees compromises a person’s integrity. If clients come to you for objective, unbiased advice and you are getting a kick-back from the vendor you refer to, how objective will you be? You can read my response here, but to expand on my answer on his blog, this is a topic that has been on my mind quite a bit. I’m still struggling to figure out the best course of action. I recently had a client that send a very good client my way. I thanked him profusely and offered him a finders fee for the first project. He accepted and I’m fine with that. However, that was not a condition of the referral. My CPA specializes in doing taxes for independent contractors and has saved me lots and lots of money for the past two years he’s been doing our taxes. I refer other people to him because he’s so good. He has a program that gives you a $25 discount off your taxes for each new client you bring to him. I guess the point here is you have to have the mindset that you’d give the referral even if you got nothing in return. Let’s face it, your reputation is way more important than a $25, $50, or even $100 check. I try to be flexible. Some people send me business and tell me upfront they’d like a referral fee. As long as it’s reasonable, that’s fine. Others refuse any offers of payment and just want their client to be happy. I have to admit that I respect that more. [...] […] One of my Bloglines favorites is Bob Bly’s blog. Today I posted a comment to his post: “Is paying referral fees wrong?” . Basically, the question was whether being promised referral fees compromises a person’s integrity. If clients come to you for objective, unbiased advice and you are getting a kick-back from the vendor you refer to, how objective will you be? You can read my response here, but to expand on my answer on his blog, this is a topic that has been on my mind quite a bit. I’m still struggling to figure out the best course of action. I recently had a client that send a very good client my way. I thanked him profusely and offered him a finders fee for the first project. He accepted and I’m fine with that. However, that was not a condition of the referral. My CPA specializes in doing taxes for independent contractors and has saved me lots and lots of money for the past two years he’s been doing our taxes. I refer other people to him because he’s so good. He has a program that gives you a $25 discount off your taxes for each new client you bring to him. I guess the point here is you have to have the mindset that you’d give the referral even if you got nothing in return. Let’s face it, your reputation is way more important than a $25, $50, or even $100 check. I try to be flexible. Some people send me business and tell me upfront they’d like a referral fee. As long as it’s reasonable, that’s fine. Others refuse any offers of payment and just want their client to be happy. I have to admit that I respect that more. […]

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