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ICFBuilder
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25 Posts
Discussion Starter · #1 ·
I'm thinking of giving my guys a referal fee for customers that they send our way?

Of course this would only be for jobs we get.

Anyone do this?

Good/Bad idea?
 

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Scooter
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304 Posts
I have not offered any percentage to employees for reffered customers. I have thought about giving it a try. I'm interested to see what some of the replies will be. I see where it could be a great idea but I also see where there might be some bad points.
 

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Captain California
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83 Posts
I've also thought about doing something like this, but haven't yet. I would appreciate hearing from anyone who has tried it.
 

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Captain California
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83 Posts
That's one way of looking at it.....and believe me, that thought crossed my mind too. I think the referral "bonus" would kind of give them a sense of ownership in the job, as well as lend some additional motivation.
 

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Registered
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2,716 Posts
I don't think I would make a set amount for an employee referral--Just remember to thank them with
bonus check.

It is their continued employment that they are aiding with the added work. An appropriate thank you check should be enough.--MIKE--
 

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Full Service Renovations
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1,318 Posts
I don't think I would make a set amount for an employee referral--Just remember to thank them with
bonus check.

It is their continued employment that they are aiding with the added work. An appropriate thank you check should be enough.--MIKE--
I don't disagree, however, all to often things we do as employers for employees (ie. favors, bonuses when times are good, lending equipment, etc., etc.,etc.) goes from the nice thing to do to the expected. Thats what really does it for me.... Maybe I am just jaded.:no:
 

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ICFBuilder
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25 Posts
Discussion Starter · #8 ·
My thought on this is:

I have two of my employees who live in another town nearby.

One of the guys has gotten us 3 jobs from people he knows.
2 of the customers he brought in have more work for us this spring.
We also have one other project to quote.

I was thinking $25-$50 possibly more depending on the size the job?

I thought it might help morale and help keep us busy at the same time.
 

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Particulate Filter
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4,430 Posts
I know from some psychology courses I've taken that there are several types reward punishments. There's basically like six combinations of three factors

unpredictable/predictable
avoidable createable/unavoidable uncreatable
postive/negative

So you can have predictable (I know when it's going to happen ie every year there is a christmas bonus) or unpredictable (I may get a bonus but I don't know when).

Avoidable/ creatable means if there is a bad stimulus for example an open flame I can move away from it and avoid the burn. Or another way to put it is for example I know that if I get my boss a job I will get a bonus. Behavior is linked to outcome.

And of course there is good things and bad things that can happen.

Out of this matrix the scientists found and measured with rats (and presumably humans too in some context or other) that creatable rewards in which the occurence of reward is random yielded the most persistent behaviour. Kind of like gambling. In fact exactly like gambling. You don't know when you will get the big win but if you keep putting quarters in one of these times you'll get it.

We want employees to keep putting quarters in.

Cmon, any other behavioral psycologists out there feel me on this?
 

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Scooter
Joined
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304 Posts
I know from some psychology courses I've taken that there are several types reward punishments. There's basically like six combinations of three factors

unpredictable/predictable
avoidable createable/unavoidable uncreatable
postive/negative

So you can have predictable (I know when it's going to happen ie every year there is a christmas bonus) or unpredictable (I may get a bonus but I don't know when).

Avoidable/ creatable means if there is a bad stimulus for example an open flame I can move away from it and avoid the burn. Or another way to put it is for example I know that if I get my boss a job I will get a bonus. Behavior is linked to outcome.

And of course there is good things and bad things that can happen.

Out of this matrix the scientists found and measured with rats (and presumably humans too in some context or other) that creatable rewards in which the occurence of reward is random yielded the most persistent behaviour. Kind of like gambling. In fact exactly like gambling. You don't know when you will get the big win but if you keep putting quarters in one of these times you'll get it.

We want employees to keep putting quarters in.

Cmon, any other behavioral psycologists out there feel me on this?
How about negative reinforcement:shifty:: Every morning an employee shows up without a project that he can hand you on a silver platter, you beam a hammer at him.:w00t: Maybe after a few mornings of being whacked with the business end of a hammer he will start showing up everyday with projects on a platter that you can pick and choose from.:laughing:
 

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Registered
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92 Posts
Stop being so damn greedy. This shouldn't even be a question in your mind. OF COURSE you should reward him. It is business that you didn't have to find. Give the man a percentage of the project. Give EVERYONE something that helps your business. People flip over getting something as simple as a thank you note. My son has gotten me several jobs from his teachers growing up...He reminded me last night that I owe him $24 for doing a small job for his current teacher...which is true!

The way I see it...the more people you have out there marketing your business the more insulated you're going to be in this market...why not encourage it a little by giving back some of the money you would have never seen anyway?

I give my lead guy 1% of the gross project that he brings in or that he upsells to a current customer...He has made several thousand dollars this year in bonuses that way...it's a win win! What is so difficult about your decision?
 

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Nest Home Improvement
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890 Posts
I do typically provide rewards (financial bonuses or personalized gifts) to those that help me secure new business. There is no written policy or promise and the rewards are unpredictable and are commensurate with the size of the new project.

Your staff should be promoting your company either in the quality of work they produce, providing top-level customer service and within their personal or social networks outside of work. It makes for good job security for them. Providing them rewards is good job security for you!
 

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Registered
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917 Posts
Just make sure the guy works for you for a while first.

You might get a new guy who appreciates his $10/hr until he gets you a nice big job and he finds out from the people he knows that your working for, how much your charging them. Instead of understanding how much it costs to run a business, he'll be pissed that your making thousands compared to his hundreds.

Which will then turn him into a whiny laborer complaining about how cheap you are, etc. BUT you can't fire him because the HO will give you sh*t for firing this great kid who talked them into giving you the work.


Normally I'm sure you would be able to tell this type of employee from the start. I work alone or as a sub so I dont deal with employees much .
 

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Registered
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7,181 Posts
We offer 1% of a signed contract if the employee is who referred us. We actually offer that to everyone. 1% may not seem like much but our jobs can be anywhere from 5 grand to 25 grand so you never really know. Most of the time this only happens if the job is to big for them to do on their own within a weekend timeframe.
 

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The Finisher
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1,396 Posts
I reward my employees with 10% of the gross project. They come to me every month, asking for a new stack of business cards. I've probably done over $100,000 in work this year just on their referrals.

I treat them well, and in turn they are marketing machines.
 

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Registered
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31 Posts
RWTAPP, I think it depends on your business. 95% of my work is from referrals and repeat business. I work very hard to keep them coming. I have a small company and try to create a real team approach. We must all work together to get the job done, find new jobs, and continue to make a living. I invest a lot of time in my employees training and I want to keep them. I offer two bonuses, job performance based, and referral based.

I educate my guys on how "side-work" hurts everyone and use the referral bonus as a little extra motivation to bring the work to us. This has worked very well for us and continues to provide additional referrals from the initial referral that we paid for.

The bonus paid is not a lot starting at $15.00 for a handyman job to $50.00 for our larger jobs (kitchens and baths) and I pay the bonus when we start the job.

Aren't there companies out there that sell you a name of someone who might be interested in work for more than that? Plus they sell this to how many contractors? I will gladly pay $50.00 to my employee who gets me in the door with an advantage, plus I don't have to pay it until we get the job.
 

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Gumby
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112 Posts
Pay Up

If anyone brings you a job, pay them a portion of profits and make it a policy. If you had a salesman would you not have to pay 6-10%. I am not saying pay 6-10% but be as generous as the job will allow.

Unlike a xmas bonus, this is a great way to get business. It is pay for play.
This is not arbitrary but directly linked to your bottom line, and the job itself.
 

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ICFBuilder
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25 Posts
Discussion Starter · #19 ·
Shingle wrote:

We must all work together to get the job done, find new jobs, and continue to make a living.

This is exactly how I want to run my business. I am all about the team approach.

I am going to talk to my guys about this and start doing this. I am going to start out low $20 per referal on small basic jobs that we get and more at my discretion on larger jobs.

Thanks for the feedback guys
 
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