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  1. #1
    A Smarter Way to Web! zivo's Avatar
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    Question Referral Program for your Business

    Hello:

    I am considering creating a referral program for my Internet consulting business, and am seeking suggestions or examples. For example, would you base the referral "gift" on a percentage of business or a token gift (like a restaurant gift card)? This program will ideally be targeted to my existing clients and colleagues as a way to grow my business through qualified referrals.

    Any insight, including what has or has not worked for you, on the giving or receiving end, is much appreciated!

    thnx... mp/m

  2. #2
    _ silver trophy ses5909's Avatar
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    I usually do token gifts, not based on the value. Of course, if they bring in a client with a big wallet, well, I will give something extra.

    I have given gift certificates, but also include things with the company name on it like pens, t-shirts, etc.
    Sara

  3. #3
    Jeremy Maddock WealthStream's Avatar
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    The most simple way of doing it is to pay the referring member a flat fee of something like $10 for every paying customer they refer (or give them $10 off their next visit to your consulting firm).

    Another option would be to set up a rewards system where they earn points and exchange them for things like eBooks, gift certificates, company merchandise, etc.
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  4. #4
    A Smarter Way to Web! zivo's Avatar
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    Thumbs up Thanks!

    Thanks for your input!

    I have been leaning more towards the "flat-fee" method rather than a percentage - a colleague of mine gives a cash bonus of up to 20% of the first gig back! I thought that was extremely excessive, but he has kept it for years.

    mp/m

  5. #5
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    If you wanted to give a cash bonus calculated on a % you could set a limit -
    e.g. [CLIENT] will receive a cash bonus of XX% off the project, up to $XXX.

  6. #6
    SitePoint Wizard johntabita's Avatar
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    I've been reading The World's Best Known Marketing Secret, Building Your Business with Word-of-Mouth Marketing, by Ivan Misner, who is considered the guru of the referral business. He says that "finder's fees" are not the most effective way to get people to refer you. I've found this to be true. He recommends that you find more creative and memorable ways to reward referrals. He tells the story of a realtor who happen to have a vineyard on his propery and decided to create his own "private label" wine, strictly for rewarding referrals. In six months, he had more referrals than from years of offering a finder's fee. The uniqueness and scarcity of the gift made it something people both talked about and wanted (i.e., they knew they could only get a bottle by referring someone.)

    Another thing that will cause people to refer you is the principle of reciprocation. I recently referred someone I met to one of my clients. Shortly thereafter, he responded by referring two people to me. This is why referral network groups work so well. Ivan Misner is the founder of BNI. I belong to a new organization called Yellow-Tie. The idea is to form a group of people that all sell to the same prospects that you do and can refer business to one another. In the long run, that may be more effective than a referral program.

  7. #7
    Matt Williams revsorg's Avatar
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    Quote Originally Posted by WDM
    If you wanted to give a cash bonus calculated on a % you could set a limit - e.g. [CLIENT] will receive a cash bonus of XX% off the project, up to $XXX.
    Why? Surely that discourages people from passing their BIG leads to you, which presumably are the ones you would really like.
    work: revs | ecru
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  8. #8
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    So you're talking a % of the value of the project they refer to you? What if that % is more than the project you did for them was worth?

  9. #9
    SitePoint Addict orion_joel's Avatar
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    I think i would lean away from the % system, as even though the client who refered the new client may know them and know what they are spending on there website they may not as well and your new client may not like the company who referred them knowing how much they are spending which could be worke dout if wanted. I find that a flat rate is much better or a gift certificate from a store or reestaurant. Most people i would think would find this better as well.

    The only thing you have to be careful of is how you go about giving the token gift, some companies have policys about staff receiving this sort of gift and it can get a little bit of a problem sometimes so it is always best to check this first to be sure you arnt going to cause any problems.
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  10. #10
    Not now, I'm kinda busy. pdxi's Avatar
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    This is something that I haven't done, due to the particular nature of my business. However, I think it'd be kind of tacky to give a cash bonus for referrals, based on any kind of percentage. It announces the dollar amount of the job, which is information that should be held in confidence between the consultant and client.
    Jeffrey Hunt, freelance PHP & MySQL developer
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  11. #11
    SitePoint Enthusiast
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    I personally wouldn't give cash for a referral in any form. I would certainly send a thankyou gift.

  12. #12
    A Smarter Way to Web! zivo's Avatar
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    Thumbs up Thank you all!

    Thanks to all of you for some great advice. You confirmed my thoughts on not giving a percentage bonus, and I like the ideas about a unique gift.

    I have on a couple of occasions sent a tin of Chicago caramel corn to my clients on the east coast, and they have loved it, especially as it is something unique to here.

    mp/m


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