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Discussion Starter · #1 ·
Is it a common practice to give kick backs to customers who refer work your way.

I recently put in an estimate for a job and the potential client said a friend wanted him to go with a contractor who'd give him some determined amount or percent of money for referring persons to him.

I do just fine not paying commissions, but is this done to boost business.
 

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Nate, that's not a kickback, that's just a finding fee. A kickback is borderline criminal.

A kick back goes like this: GC lands bid, scratches bidding subs, shops cheaper, tells each new sub bidder to up the quote and split the difference.

Bob
 

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I have a 'working agreement' with other contractors, pretty much we just pass leads around. Sometimes we may pass a little payola around, most of the time it's more like drinks and dinner.

I have never 'kickbacked' to a customer. I have one cust. that really does not understand what I do but he sells the he11 out of me, his leads have nearly a 2:1 ratio.
 

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Ask your customer if his friend is going to give that money he recieved for referring the other contractor to him back to your customer if the contractor turns out to be a turd! Or if that friend is going to help pay for the costs involved if that first contractor screws up and disappears 1/2 way through the job.

Sell your company and yourself and let the customer decide if his friend getting 50 bucks is worth going with some other contractor the customer has never even met.

By the way is the customer really that naive to not know where the money to pay the friend is coming from? Personally I would be miffed if I was a customer and I knew that $50, $100 or $500 of my money was basically being handed over to my friend. I would be more inclined to tell this contractor with the referal program to take the referal money off my total bill.

The whole thing makes no sense to me no matter how you look at it.
 

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Discussion Starter · #5 ·
Teetorbilt said:
I have a 'working agreement' with other contractors, pretty much we just pass leads around. Sometimes we may pass a little payola around, most of the time it's more like drinks and dinner.

I have never 'kickbacked' to a customer. I have one cust. that really does not understand what I do but he sells the he11 out of me, his leads have nearly a 2:1 ratio.
I am reffered by others that I subcontracted from too. I have sent them gift certificates and tickets to things. But not with homeowners that have referred me to family, friends and neighbors.
 

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Discussion Starter · #6 ·
Glasshousebltr said:
Nate, that's not a kickback, that's just a finding fee. A kickback is borderline criminal.

A kick back goes like this: GC lands bid, scratches bidding subs, shops cheaper, tells each new sub bidder to up the quote and split the difference.

Bob

Sorry, wrong wording. Let's call it a homeowners referral commission. :cheesygri
 

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No...you should have your customers wanting to refer you to all of their friends. I've even had a customer that couldn't afford to have me do a job I looked at before selling the house that called to specifically get business cards so they could pass me off to all their old friends when they left....Just make em so happy they can't stand but to run their mouth off about you. I think you get more that way than from bribing the customer, so to speak.
 
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