Commission pay

[Fbermudez]

Hi everyone I run and indigo press during the day and do vinyl graphics as a side business, I have a buddy that once in a while gives me work for vinyl graphics on work truck
but is usually small so as appreciation I buy him giftcards to restaurants or give him cash.
But now he got me a good deal to install vinyl cut graphics on 36 different locations.
My question is how do you guys pay commission to your sale staff or to people that refer your business.
any help would be appreciated.

 

[Boudica]

We don't pay anyone for referrals, we just thank them.

 

[Gino]

2 to 3%

 

[netsol]

2 to 3%

sounds reasonable, i suppose it depends on what your normal customer acquisition cost is

 

[Stacey K]

Lot's of people like to remind me they referred someone, so they can get a deal. I don't unless they are a really good customer and they refer several people to me. Then when they want something small like a single yard sign or some one off decal, I don't charge them.

 

[Boudica]

We work with several other printers that can't do large format. Sometimes the jobs come through them - and other times they refer their customer to us. 9 times out of ten - the referral is a PITA, and they just shoved them off onto us, rather than being in the middle.

 

[garyroy]

Someone who gives you a referral to 36 locations is definitely worth some $$$. For sure.
This guy is talking for you. Imagine paying a salesman 10% on everything he sells?

Do the jobs, figure your profit, lets say $100 per location (round number) which totals $3600.
I'd have lunch with him and ask him "Would you be cool with me throwing you $250 for that referral"?
If his eyes light up and he says yes, I'd give it to him right on the spot.
Now he's motivated to keep talking to everyone he meets. You have a part time salesman and a new customer with 36 locations.
Sounds like a no brainer to me.

 

[netsol]

We work with several other printers that can't do large format. Sometimes the jobs come through them - and other times they refer their customer to us. 9 times out of ten - the referral is a PITA, and they just shoved them off onto us, rather than being in the middle.

nobody said it wouldn't be a pain in the ass.
a friend has been referring clients to me since 1987. he is very consistent, EVERY ONE IS A DISASTER.
he means well, i normally, when they mention his name, lie and say whatever it is, is a product we don't make, but refer someone else.

there is no reason a referral COULDN'T be valuable, but it has not been my experience

 

[signheremd]

2-3% would be typical. As high as 5% is not out of the question for certain jobs. Normal Finder's Fee is 2-5%. But the question becomes whether you pay this person just once or if you pay him everytime the new business uses you from now till forever... That would shape the percentage in my mind.

 

[Fbermudez]

Thanks for everyone's input, this really helps me out on how to pay him for this referral.

 

[netsol]

one of my largest clients always pays a standard salesman's commission for every referral, for the obvious reason that they want you to do it AGAIN.
this is for the FIRST TRANSACTION, OR FOR RETURN OF A LOST CLIENT (WINBACK SITUATION)

 

[Notarealsignguy]

The question is, is he an employee of the company that he is giving you the referral for? I don't like commissions because it can run afoul of ethics rules for employees, it's a kickback. I would fire someone for it and drop the vendor. We will do favors as a thank you, like paint someone's car, trailer, decal their boat cowls etc but I make it known that it is not an expectation of future work from them.
The other thing that nobody mentions and maybe it is just a sign industry thing but the whole moonlighting thing rubs me wrong. If it is something unrelated to your current employment then no biggie but if you're lettering trucks on the side while doing the same thing for your day job, it is not fair to your employer that you do not bring the work to them. After all, most people pay their employees through thick and thin and I see it as a 2 way street.

 

[Stacey K]

nobody said it wouldn't be a pain in the ***.
a friend has been referring clients to me since 1987. he is very consistent, EVERY ONE IS A DISASTER.
he means well, i normally, when they mention his name, lie and say whatever it is, is a product we don't make, but refer someone else.

there is no reason a referral COULDN'T be valuable, but it has not been my experience

Is that friend my Dad by chance? LOL He means well too but all his referrals are for his friends looking for some kind of wall decal photo of their old car or some pinstripes on a 4 wheeler. I told him unless it's a business don't mention my name LOL

 

[Gino]

Ya might give someone a 5% commission on a job if it's over a certain amount..... say $2,500 or so. Then, for every other job coming in from that same customer 2.%. If the customer comes directly to you, that's a toughie, cause now they're technically YOUR customer.

 

[netsol]

Is that friend my Dad by chance? LOL He means well too but all his referrals are for his friends looking for some kind of wall decal photo of their old car or some pinstripes on a 4 wheeler. I told him unless it's a business don't mention my name LOL

THE REAL PROBLEM IS, when your father's friend (or my friend's friend) shows what a jerk they are, you really don't feel free to eject them with a footprint on their butt. anyone who knows me knows i am not shy when i am displeased. the problem is, your father & my friend MEAN WELL.

 

[Texas_Signmaker]

I'm a fan of giving $50 or $100 in gift cards to restaurants as a tank you.

 

[Gino]

Somebody gave me a $50 gift card one time to a place that was frickin awful. I've received more gift cards as tips and pure thoughtfulness than a commission.

 

[Notarealsignguy]

I used to get herb for a tip quite regularly when I drove a tow truck back in my college days. Now I get to eat 3% on credit card payments as a tip.

 

[Notarealsignguy]

Is that friend my Dad by chance? LOL He means well too but all his referrals are for his friends looking for some kind of wall decal photo of their old car or some pinstripes on a 4 wheeler. I told him unless it's a business don't mention my name LOL

Haha my wife does that crap to me. I told the guy at the hardware store that we make signs, he wants a Calvin sticker pissing on dewalt, he's gonna come by this afternoon, I told him you would be here and gave him your cell number

 

[John Miller]

You will find it best to keep your referral thank you payments gift cards and restaurant cards, Take the $$$ out of it. Better to not hire him as a salesperson