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Discussion Starter · #1 ·
I get a lot of requests for exterior painting. I was wondering if it's unheard of to refer that lead to a company for 10% of the sales contract? I'd like to get with one company to send about 30 leads to a year. From what I read it's not uncommon to have a referral fee agreement with a business. I just wanted to get some other contractors opinions. Thanks for any help.
 

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Talking Head
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I get a lot of requests for exterior painting. I was wondering if it's unheard of to refer that lead to a company for 10% of the sales contract? I'd like to get with one company to send about 30 leads to a year. From what I read it's not uncommon to have a referral fee agreement with a business. I just wanted to get some other contractors opinions. Thanks for any help.
10% for a LEAD? Not a chance. When a sales person gets 10% it's for a signed contract.
 

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10% for a LEAD? Not a chance. When a sales person gets 10% it's for a signed contract.

Ethan, I'm with you. Where did this 10% referral fee thing come from?

Let's see, average price to paint an exterior house, 30 referrals x the 10% "referral" fee equals about 40-50K

For making 30 phone calls not too shabby
 

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Discussion Starter · #4 ·
That's what I'm saying. After the contract is signed. I wouldn't expect anything if they didn't get the contract.
 

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For 10% you better be selling the job and getting the signed contract.:eek:

More than likely if the painting contractor would figure in your fee he would lose a lot of jobs also.

Just my $.10
 

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10% for a LEAD? Not a chance. When a sales person gets 10% it's for a signed contract.
That's what I'm saying. After the contract is signed. I wouldn't expect anything if they didn't get the contract.
I think what Ethan is saying is that giving someone a number, then they do all the sales work, does not warrant 10% of the contract. However if you do the leg work and make the sale, then sure, 10% isn't too bad.
 

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Discussion Starter · #8 ·
I think what Ethan is saying is that giving someone a number, then they do all the sales work, does not warrant 10% of the contract. However if you do the leg work and make the sale, then sure, 10% isn't too bad.
Thanks. I don't have any experience with bidding painting. I'm sure I could learn, but I'd rather just hand it over to someone else. If I was to ask for a percentage, what would be fair? Considering I'd only be giving them the lead to bid themselves.
 

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I've never paid for a referral or asked to be paid for one. Not saying anyone else has to do the same; I'm just not in that business.

Edit: It's not a religious thing just that for anything more than a nominal amount I'd be better off spending the same money on my own branded marketing.

Edit again: as for selling the referrals, you'll never get a referral back from that guy unless you're willing to cough up the same. I'd rather have the good will and the referrals back from a loyal partner.

Edit again: Though i'd like referrals back it's never a quid pro quo.

Edit again: lots of prior threads on this subject.
 

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Discussion Starter · #10 ·
Well I'm in the profit business. You never paid for any advertisement? I find that hard to believe. Advertising is super expensive, and there no promise of a signed contract.
 

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rant, you wouldn't pay 40-50k to make 400-500k?

Yes I would, but only if I got the project with the addition of the referral fee tacked on above my price. But if you're asking would I give up 10% of my profits to pay the referral fee, the answer is a BIG NO.
 

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id gladly give 10% to anyone who got me a job

it works great for anyone who has more than a 10% profit margin
10% is ridiculous in my opinion. I will admit I paid 1-3% to some realtors for some 6 figure jobs when we are at the height of the recession. My dad and grandad never paid or accepted one. I have never and will never accept one. If i reffer someone its because they are good. I refer other GCs reguarly when I cant get to the job.

Ill never pay one again. It made me feel dirty and it cost me 3%....

The referrals come for me from my clients, subs and suppliers for doing what I say when I say, and being a man of my word.
 

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I've never paid for a referral from another contractor nor expected to be paid.

Once you find no painter is going to pay you 10% for finding a name, you'll realize we are right.
 

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Discussion Starter · #16 ·
id gladly give 10% to anyone who got me a job

it works great for anyone who has more than a 10% profit margin
That's what I was thinking. I mean if someone offered me a graffiti removal job for 10% of the contract I'd be all over it. If you can't afford $10 for every $100 of business I bring you it's time to rethink your bidding process.

Are we the only ones who think 10% is fair?
 

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Im no painter, but as a GC I hope to net 10% after overhead and salaries at the end of the year.....

Most painters, even high end ones dont seem to do to well unless they are running 25 guys. I know a few really good ones who make a good living with one or two crews, but thats rare. 10% is a lot.

I would personally not mark up a job for the refferal fee unless I really didn't like the client. ;)
 
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MGRG said:
That's what I was thinking. I mean if someone offered me a graffiti removal job for 10% of the contract I'd be all over it. If you can't afford $10 for every $100 of business I bring you it's time to rethink your bidding process. Are we the only ones who think 10% is fair?
Yeah probably are. 10% of a 10k job is ridiculous for just giving a name.
 

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Discussion Starter · #19 ·
Yeah probably are. 10% of a 10k job is ridiculous for just giving a name.
I can't see how. I mean I'm bringing them like 30 new customers a year. If they was 10k jobs that's 300k a year I brought to you, that you didn't hear about before.
 

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MGRG said:
I can't see how. I mean I'm bringing them like 30 new customers a year. If they was 10k jobs that's 300k a year I brought to you, that you didn't hear about before.
What you don't realize is that any smart and reputable contractor is going to have to bid their 10k job at 11,100 so they can give you your cut for doing nothing more than giving a phone number.

They'd be better have having a salesman that will go door to door finding customers and pay them 10% because they are at least earning it.

Are you going to pay 10% to get a name?
 
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