# referral fees



## Mocha Tees (Dec 9, 2008)

hi again
i have custmrs that send people who want big orders or even sending someone who wants one shirt..do i offer a referral fee or discount on their next purchase?

is there a specific discount offered to orders of 6 or more customized rhinestoned tees??

there is a lot of material & time that goes into putting together these wonderful designs so i am not a fan of discounting too much..
how does this work?
mocha


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## splathead (Dec 4, 2005)

If your customers aren't asking about a referral fee, I would not worry about it. I recommend businesses all the time who I do work with and I don't expect a fee.


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## Girlzndollz (Oct 3, 2007)

I agree with Joe, Mocha. That is totally a personal business decision on your part. Some would consider it in the marketing and advertising budget, others not. Doing good biz to generate word of mouth is hopefully, the goal of treating customers right. That doesn't mean you *have* to reward customers who spread the word, but you could if you felt it would benefit the bottomline more. In the end, that is the key question, does it benefit your company's bottomline more to offer it, then it does not offering it. Each person has to look at the biz plan and financials and make that call. Good luck with your choice. =)


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## Mocha Tees (Dec 9, 2008)

wow thats great...
i just had a young lady who was expecting a discount on her purchase because she referred her boss who ordered 12 shirts at $25 each...
and now the boss is expecting discount because of the quantity..
i explained that the more material the more it costs...why would i be in this and not make a profit?..not to just break even...and she is an owner of a biz herself..
is it just me but why are people feeling they should be disounted..even though i always do a little bit more for the contact person or owner...i don't get it..

girlzndollz what is bottomline? i am soo new to this..this is a small at home bizness part-time for me that i just started a few months ago and it is taking off kinda quick so all type of situations are coming at me...i am sooo thankful to have found this site..no one i know is in this bizness..
so thanx for any help, suggestions & lessons
mocha


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## Girlzndollz (Oct 3, 2007)

Hi Mocha,

The bottomline is what your business is earning. The goal is to increase the bottomline - just another way of looking at your growth and net profits. 

Some people do offer discounts to current customers the bring in new business, but unless it was discussed prior to her bringing you the sales, she should not be counting on a discount. She is just *working* you. Everyone is trying to save a buck these days.

Some people offer folks a 5 or 10% discount on a future order if they bring in sales. Literally, you could set something up anyway you want it to work.

Say your current customer refers biz to you, and it brings in $500 of gross sales to you. After the job is complete and bill is paid in full, you can issue the person who referred the job to you a 5% discount certificate on a future order with you, of up to $500, which they can use in the next 6 months. 

See? You can offer nothing but your thanks, since you did not have an arranngement with them, or you can construct a reward system that you can live with. If you do offer incentives/rewards for referrals, I would be *very* careful with the wording. 

Set goals, limits, and experation dates for the rewards, as well as terms like you must be paid in full for the job to count. If you take Paypal, I think payments can be reversed for a certain amount of time. Make sure the rewards are issued after that date, so no reversal of payment can happen to you on a job you are going to reward a referral for.

If you are not comfortable with establishing a referal/reward system, don't let this pressure get you to do so.

The other woman has a biz. There is such a thing as professional courtesy. She recommends you when the opportunity arises, and you return the favor when the opportunity arises, that is, if you believe in her service, product, etc. 

She hired you for a service at $X, and you fulfilled that service. If she wants to refer your business, that is very nice of her. That doesn't mean she gets to demand a discount. 

Others have their opinions on this, and hopefully more people will share their experiences, good and bad, with this topic.

My only real advice is, offer rewards on your terms *if* you are even interested in doing so. Sometimes it can make good sense, sometimes, not. Good luck with everything. If you go ahead and offer rewards, will you let us know how you set it up and how it works out?


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## pwapparel (Feb 16, 2007)

Mocha Tees said:


> girlzndollz what is bottomline?



I'll take this one...

Your "bottomline" is basically your overall profit.

For this scenario, if offering the discount to your customer keeps her in the referring spirit and in the end your profit is higher because if it, do it.

Good Luck!


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## Girlzndollz (Oct 3, 2007)

pwapparel said:


> I'll take this one...
> 
> Your "bottomline" is basically your overall profit.
> 
> ...


Yep, that's the route I'm going, too:



girlzndollz said:


> In the end, that is the key question, does it benefit your company's bottomline more to offer it, then it does not offering it?


So, Mocha, you have to look at the amount of biz $$ the referrals bring in, and what the cost of a referral program would cost $$. 

That will help you decide. It'll take some number crunching, but since everyone's biz's are set up differently, and operate differently, you have to look to your numbers to answer the question.


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## Mocha Tees (Dec 9, 2008)

OK... thanx all for teaching me about bottom-line..bizness 101.. i have always heard of it but never knew what it was..
yes girlzndollz, i will keep u posted..u gave very good advice about implementing a referral system....
i do like that because it is my way of showing my appreciation to someone for me to get the bizness
my best friend tells me i am too emotional in bizness...

i just think about how i would like to be treated if i referred someone some bizness that netted them (your ex girlzndollz) a $500 order, it would be nice to either get a discount on my next order or like u said a % off the nesxt big order...love it!
my daytime job was started on a referral system & it has kept me going (along w/Excellent work) and keep customers coming back 12yrs later..

will keep u all posted!
thanx much
mocha


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