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| | The Minding Your Own Business Network is not currently active and cannot accept new posts | | Do you know about referral fees? | Views: 1826 | | Mar 07, 2007 10:41 pm | | Do you know about referral fees? | # | 
Barb Desmarais | |
I have been approached be a medical doctor who now makes his living teaching people about ADD/ADHD. He's written a book, leads online courses and gives lectures. He would like to refer clients on to a parenting coach if they're asking for more than he's able to offer. He is asking for a referral fee if I gain clients that have come directly from him. This seems reasonable to me although I've never been involved in any arrangement like this. I've asked him to put in writing how he sees a partnership with me and what kind of fee he expects.
What questions should I ask him? Should I get a lawyer to review any agreement I make with him? What is a reasonable fee? Is it a percentage or a flat fee? His site is: http://www.addadhdadvances.com.
Do you have any advise for me?
Barb
http://www.theparentingcoach.com
Co-Moderator: The Parent's Lounge network
http://TPL-network.ryze.com Private Reply to Barb Desmarais | | Mar 07, 2007 11:12 pm | | re: Do you know about referral fees? | # | 
Shann Vander Leek | | Hi Barb,
I use a flat 10% referral fee with my strategic partners.
I drew up a simple referral letter including the fee.
You can reach out to me privately if you want a copy of my
letter.
Have a great night!
Shann Vander Leek
True Balance Life Coaching, LLC
www.truebalancelifecoaching.com
www.truebalancelifecaoching.blogspot.com
231.668.1111
I help small businesses and professionals achieve extraordinary results and create balance in their lives.
Visit www.truebalancelifecoaching.com to schedule a complimentary coaching consultation.
"You gain strength, courage and confidence by every experience in which you really stop to look fear in the face ... You must do the thing you think you cannot do." Eleanor Roosevelt
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Private Reply to Shann Vander Leek | | Mar 07, 2007 11:15 pm | | re: Do you know about referral fees? | # | 
Laura Wheeler | | The best way to set up a referral program is where there is not a need for anyone to check up on anyone else. Each person benefits when they do what they are supposed to, and not if they don't.
For referrals, here are some suggestions:
1. You credit referrals only if the patient or the doctor tells you that he referred them. That places the burden of proof on them - either he calls you and tells you he referred someone, or they tell you when they contact you that he referred them. I provide an incentive - I offer a discount to referral clients if they mention who referred them (commissions are calculated on contract price AFTER discounts). This keeps tracking simpler. You can also provide him with business cards of yours which have a write in line for his name. If it has an incentive on it, then they will present it to you, and you know who referred them.
2. He gets paid when you get paid. This is pretty standard with affiliate programs and referral programs. This keeps you from paying for dead leads, and means you only pay on actual business generated from it.
3. Set a limit. You only pay referrals on a certain number of visits, not indefinitely. I pay them on an initial contract, but since you work with ongoing situations sometimes, you'd have to think about what you can afford, and what will provide a good incentive to him. The shorter the term, the higher the commission to make it worth the bother for him.
4. Make sure you set up a contact list, or a database or something where you can record referrals - who they are, and who referred them. That way, when you get a new client you can check that to make sure they are not already referred (very many referrals, and it is easy to forget a name).
Referral programs can work very well, but they depend on a lot of factors. This situation, where someone naturally HAS to refer people, sounds like it could be a successful one, if you think ahead of time about what you can do that is sustainable - that is critical. It won't work if it is not sustainable by him, and by you.
I'd involve a lawyer to draw up the agreement, just so you make sure it is worded in a way that cannot be misinterpreted. Make sure you are clear about what you want though, we've had lawyers who did a lousy job because they listened more to what they thought we OUGHT to need, rather than what we really DID need (and they got the terms all wrong), or because they simply did not care to find out what we were trying to do.
Just my experience.
Laura
Mom to Eight
President, Firelight Business Enterprises, Inc
DBA Firelight Web Studio
Small Business Web Services - Come in from the cold and feel the difference.
http://www.firelightwebstudio.com/Private Reply to Laura Wheeler | | Mar 07, 2007 11:46 pm | | re: Do you know about referral fees? | # | 
Robert Harrington | | Normally professionals in Law, Real Estate and I can only assume doctoring, are not allowed to refer people to only one service provider because of the inherent conflict of interest...what if another provider is "better" and i am only refering clients to this one service provider for the referral money...instant lawsuit action here.
And again if the consumer has a bad result the consumer can sue the referring party and win big. and of course you will be a defendant in any legal action.
It's just not worth it.
I would not pay referral fees to any professional unless I was part of their organization and worked under mandated referral rules.
Private Reply to Robert Harrington | | Mar 08, 2007 1:24 am | | re: Do you know about referral fees? | # | 
Biana Babinsky | | Hi,
I know that in some industries business owners are not allowed to accept referral fees. If someone referred someone to me and they can accept commissions, I always send a reward for a referral. It really depends on what the referral is for, though.
I sell many different products (e-books, special reports, teleseminars and audio recordings). I pay 40% commissions through my affiliate program, so if someone referred a person and a person bought a product, they get 40% commissions.
If someone sent a one-on-one client to me, I would reward them differently, depending on the kind of help the client needs, how long we will work together for, etc.
Your mileage will vary, as each situation is different.
Biana Babinsky
Need To Get MORE Clients?
Get FREE Special Report, "Top Strategies To Get MORE Clients Online"
Private Reply to Biana Babinsky | | Mar 09, 2007 6:57 pm | | re: re: Do you know about referral fees? | # |
Barb Desmarais | |
Biana, Robert, Laura and Shann ~
Thank you so much for taking the time to respond to my post. Your thoughts and advice mean a lot to me as I've never had to consider anything like this before.
I'll be weighing everyone's feedback carefully and also letting my intuition guide me. I haven't made a decision yet and will be waiting for his reply to my request to put his proposal in writing.
Thanks again and have a great weekend!
Barb
http://www.theparentingcoach.com
Co-Moderator: The Parent's Lounge network
http://TPL-network.ryze.com Private Reply to Barb Desmarais | | |
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