BONUS REFERRAL PROGRAM ILLEGAL??

[TMDAWGLC]

I just started my own carpet and restoration company and had an idea about a bonus referral plan. in a nut shell, when i get a new customer i'll ask them how they heard of me and if they give me the name of a previous customer i'll kick maybe 3% of that new job back to the customer that gave the referral, and they can either have the money or it can be applied to their next service. does anyone know if there are any laws against stuff like this? or is this simply a stupid idea? let me know
peace out 8) [/b]

 

[TMDAWGLC]

do you do a flat referral fee or a percentage?
could this cause a conflict of interest with industry professionals (adjusters, plumbers, real estate folk)

 

[Jim Martin]

we have been doing it for about 3 or so years now and there is nothing
illegal about it

they can keep this and take it off there next cleaning or return it for cash value...........




click to enlarge

 

[Jim Martin]

Percentage

 

[MicahR]

3% is too low. My program and many like it give 10%. Even at 10% you'll be paying way less than a run of the mill phone book add.

 

[Greg Loe]

conflict of interest!!!!! you can not do that, the law states all bonus money must be sent to Greg Loe.

 

[Doug D]

10% is what I do here. Works well for us.

 

[Desk Jockey]

On of Mike Brummett's buddies gives 3-Five Dollars bills for every referral that his customers give him. (Joe Polish)

I thought it was a little gimmicky but the women that told me about it said she tells everyone she knows! Great!

I went to a Howard Partridge seminar and he also had a give money back deal.

A lot of the restoration companies around the country also have some sort of finders fee's or referral program.

We never have, I feel like we could be missing the boat, but I also feel strange about giving them money back. :?:

 

[Royal Man]

Referrals are great but, I have found that the reward that is most appreciated by your previous customer is only the trust and confidence that their friend is Not going to get a 1/2 ass job.

The money doesn't matter!

Still, ask for and encourage referrals.

 

[Jim Martin]

If you give any client a half ass job no referral is going to work for you but......if you give 110 % and then offer a nice referral package you will be way ahead of yourself and others.......
very few have every returned it for cash.....................


BUT........I have had clients keep it in a drawer for a year and turn it in to me to get the percentage back off there cleaning.
Most look at is as more of a coupon ....and almost every women out there love to use coupons.......

 

[Jim Williams]

I tried it last year. 15% off for the referred job and 15% off the referrers next cleaning. I got tons of referrals, but only 4 people redeemed the referral card coupons. Most people are happy to refer you without getting a reward if you do an awesome job and don't leave thier carpet wet for 3 days.

As far as being illegal. I don't think all the ad gurus would do it if it was. Howard Partridge is big on referral systems.

 

[Becker]

depends on what kinda work it is.. Are you paying an insurance agent on an insurance job?


Are you paying a property manager when the funds come from the deposit?


Simply paying a client for giving your name to the neighbor.. No worries.