Finder Fees

[HawaiiVA]

If a current client refers you to a new client, do you offer a finder fee or discount on their next invoice? If so, how do you calculate the fee?

In the past, I have always just comped about $100 of work time as I was still a start-up. Now I have a high profile coaching mentor who wants to refer me to her clients. She wants a $125 up front for each sign on and than $125 3 months later if they stay on. Does any of you do something like this?

 

[Tess]

I always give clients 10% of the referral's first paid invoice, up to $1000. I am not in the habit of paying for referrals over the long term and feel like if a client wants to recommend me because she thinks I am fabulous, then great, and I'll thank her accordingly. Any other motivation for recommending me isn't genuine and isn't likely to bring truly ideal clients into my practice.

 

[LeeDrozak]

I give 10% of the next invoice as well. I agree with Tess about paying for referrals. However, if this is an arrangement you are comfortable with then look into doing it.

 

[StephanieP]

If this is a current client you may have a certain relationship with her to where this doesn't bother you. But, I don't like the tone (unless I'm misunderstanding something). I got the impression that she came to you and said, "I'll gladly refer people to you IF you pay me." That just doesn't seem in the spirit of what referrals are meant to be (IMHO). Most of the VAs I've seen (I'm a website peeping Tom) seem to create their own referral programs, not the other way around.

 

[VBPartners]

Typically, depending on the client, I'll offer between 10-15% of the next month's retainer.

However, all situations are different. If you need the referrals and work, then that may not be a bad deal. I would put some limitations such as that the finder's fee is not so much a set amount but rather a percentage of the new client's retainer.

Good luck either way

 

[frsvirtual]

I take 2hrs off the upcoming invoice. But it's a one-time deal per instance. I too don't like the tone your client seems to have - but then I'm not in a good mood at the moment so maybe I'm being too sensitive. LOL Why would you give someone a referral reward up front, or a reoccurring one too?

I really find her request rather bold, but if you're comfortable with it, then I guess go for it. However, if it were me, I would just thank her for the referrals, & tell her "this is my referral policy" - take it or leave it. lol

 

[HawaiiVA]

Truthfully, I have had some second thoughts on it too. She does it with a number of other VA's (I have seen the correspondence) and I think she counts on it as part of her yearly revenue.

In her original correspondence regarding the situation, it seems more like a monthly thing but than she asked for it up front.

Thanks for the input.

 

[Phyllis]

Wait a minute, you pay her to mentor you and she wants you to pay $125 - $250 for referring clients to you?

I think paying, or rewarding, for referrals is a good thing, but that seems a little steep, especially for someone you are already paying.

 

[HawaiiVA]

Wait a minute, you pay her to mentor you and she wants you to pay $125 - $250 for referring clients to you?

I think paying, or rewarding, for referrals is a good thing, but that seems a little steep, especially for someone you are already paying.

I provide virtual assistant services to her (along with several other virtual assistants.) She is a coaching mentor and her business is growing very quickly. She basically provides a rolodex of service providers to her new coaching clients and wants a kick back from me for being on the rolodex list.

 

[AwesomeAssistant]

I had a client that operated a referral business. So I was in her 'book' and on her website for her clients. What we did was trade services. She normally charged a certain amount for someone being listed in her referral business; so I traded that amount in my services.

Your case sounds a bit different though. I personally agree with what many others have already said - paid referrals are not the way to go. Anyone that refers me does end up getting one hour of my time free. But I don't advertise that and no one expects it. It's just a nice bonus.

If you associate with those that believe in referring business to one another because that's the right way to do business, these sort of issues don't even come up.

Hope you get it all sorted out amicably.

I provide virtual assistant services to her (along with several other virtual assistants.) She is a coaching mentor and her business is growing very quickly. She basically provides a rolodex of service providers to her new coaching clients and wants a kick back from me for being on the rolodex list.

 

[vosolutions]

I am also curious about this conversation as I have a colleague who is an accountant and we both belong to two networking groups together (she invited me to both and I joined both). Now I got a referral from her for a potentially large client and she has indicated that she would like a cut of the business on an ongoing basis. I'm very uncomfortable with this as we are "networking" in the same groups. I'm hesitant to start a precedent in this area - but I am not opposed to offering 10% of the first retained, as others have suggested. Any additional thoughts on this scenario?

 

[jrymut]

Hello,

I have a different but related question.

I have a colleague who trains people in internet marketing and she wants to recommend my services to her list. We are setting up a quasi-affiliate relationship--she does marketing to her list and promotes me and I give her a commission for any clients who work with me.

What would you consider a fair commission for this arrangement? Does any one else do this? It's not exactly a referral, because she is actively marketing me. But it's also not a subcontractor relationship because she is not a VA bringing in VA clients and subcontracting them to me. What seems fair?

Thank you for your help,

Julia

PS. HawaiiVA: Unless your client is an affiliate, on-going fees seem strange to me. When I hear "referral", I think the main point is good will on both sides, not income.

 

[Phyllis]

I would also tell her this is my policy and take it or leave it. If she is referring to other VA's as well, where is she getting the referrals from?

I would also look for a new mentor. But that's just me.