Referral fees

What arrangements to offer for referrals

[cmendla]

The bulk of our business is hardware and software consulting although we do a fair amount of web design as well.

Right now I'm dealing with a client who is going into a new sideline where he would be in a position to refer clients for all services.

My question is, what kind of referral fees/commissions seem to work?

Things I have to consider
- One time fee vs ongoing commissions (Ongoing is much harder to track)
- What is a decent fee for the various referral fee scenarios?

Anyway, if anyone has any ideas, I'd greatly appreciate them

thanks

cg

[Fortune Hunter]

I have seen this type of arrangement range from 5-25% of the initial piece of business is worth to you. I have also seen some ongoing commission arrangements, but those are much more rare in a referral situation because unlike a sales person a referral partner is not out on a regular basis building a relationship with your client and soliciting new sales. That is what you are doing now.

What this will come down to at the end of the day is what they think is fair to keep referring business to you. You can have any opinion you want, but if they feel it isn't worth it they will simply stop referring business to you.