Referral Fees for New Business

9 Oct

Inquisix is all about sales reps getting a referral to a prospective customer in return for giving a referral to their customer. It’s really a win-win-win-win scenario as each customer has agreed they’re interested in learning about a new solution and each rep gets a warm referral to a new prospect.

But are sales reps willing to do favors? Do they make an introduction to one of their customers on behalf of another sales rep? Of course they do – it may be a “you owe me one for next time” type of favor but that’s how it works – just make sure you give as many favors as you get!

And are sales reps willing to sell their contacts? Yes, of course they are, that’s what sites like JigSaw are all about – selling your contacts in order to get new contacts. Of course it’s done anonymously as no sales rep wants a good customer to know that their info has been sold – where’s their share!?!

Another way sales reps can make money selling their contacts is via the referral fee. Many companies provide the referral fee to non-employees who help them win business with new customers in exchange for a portion of the sale.

On LinkedIn recently, a question was asked if it was ethical to offer a referral fee for generating new business. There are 7 answers (including one from me) in the affirmative from sales reps, consultants and small business owners with no dissenting replies. This is different than selling a business contact’s information anonymously, rather this is a fee earned for introducing and helping sell the solution to your customer.

One Response to “Referral Fees for New Business”

  1. pc4media October 20, 2007 at 8:20 am #

    Referral fees are a slippery slope, and less effective than a salesperson that knows how to prospect and network effectively. I firmly believe that the reason someone should refer someone is because the selling party can solve a buyer’s problem. Someone who is receiving a referral fee may have that intention. However, by accepting money from the selling party, their intentions can be considered suspect. Once someone’s intentions are suspect, trust is loss. And trust is critical in an relationship when a referral is made. If that’s not there, the “referral” is useless.

    Of course, I’d love to see some numbers that support “referral fees” as a reliable “go to” market method. But I suspect they are always a bastard step child to other methods of prospecting.

    Atleast with Jigsaw, there is no personal connection where trustworthiness and good intentions are implied. It’s not much different than scraping the web for contact info. I’d rather someone get my info there and cold call me, then pay one of my trusted contacts to introduce me.

    PS. you have to get rid of this registration process if you want people to actually comment on here. the average person won’t make the effort. if you’re worried about comment spam, use akismet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: