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Recommended Affiliate Payout?

payments for partners who refer clients



12:04 am on Jul 21, 2008 (gmt 0)

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If you presently have a referral fee that you pay anyone who sends a new client your way, how do you determine the payout?

In the past, I've offered certain associates 10-15% of the total site cost, payable when a site is launched and I've received the final payment from the new client. I was curious as to what other designers pay associates whenever they refer a new client to them. I'm not talking a sales staff member who gives them the rundown or collects data, but an associate who simply passes contact info on to you or has someone contact you about a site, and you make the sales pitch yourself.

3:13 pm on July 23, 2008 (gmt 0)

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Think about what percentage of those leads bears fruit - and how much that means to you in dollars.

If too many are failing then that time and effort (and expense?) has to be covered.

There's no standard, it's about pitching it so that quality leads keep coming, and both you and your stringer make a profit.

Simply providing a lead is not necessarily a lot of work, but if they are weeding out the time wasters, then that's worth rewarding.

3:44 am on Aug 7, 2008 (gmt 0)

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I belong to some referral groups where I don't pay any referral fees, but to get referrals from sources outside these groups I have paid referral fees before. I may handle it differently than others, but I look at referral sources as a valuable business generation tool, but it must be good quality leads that don't require I spend 6 months trying to close the deal.

First, I have a classification system of 1-14 in terms of the quality of a referral with a "1" basically being that the person gave me a name and maybe phone number, but doesn't really know the person they are referring or have spent any time qualifying the lead. I wouldn't really pay a fee for this. On the opposite end is a 14 where it is basically a closed piece of business before I ever contact them. They have basically been sold by my referral partner and all I have to do is walk in with a contract and they sign it. I would pay 5-10% of the total contract based on the dollar amount of the business for a referral like this.

However there is a pre-step in here that I use, which is that when I come across someone I think could be a good referral partner I spend a little time "training" them. I meet a few times for breakfast or lunch on me and tell them about my business and what a good referral is and what is not. I give them a one page document that explains my business and what to look for in a potential referral. In other words I build a relationship with them and train them what to look for. First, the referrals they deliver are much higher quality as a usual thing and second I pay a small fee. In my experience I found the fee doesn't serve as the motivator as much as a decent relationship with them and my ability to return the favor someday.