In an upcoming article, I will explore how to establish recommendation partnerships – including finding the ideal, bringing them together with the ability to recommend and managing relationships. Subscribe to my agency newsletter to make sure you don`t miss the future update. Keep in mind that you can receive fewer recommendations without a recommendation fee. At the end of the day, it depends on your business goals – what are your priorities? Non-fee recommendations could be more qualified… or less qualified because people do not decide to “veten” them first. Your lawyer can advise you in the language to use – and they can share if there are reasons not to pay a transfer fee based on your individual circumstances. These include language to protect themselves from conflicts of interest, including confirmation by recipients that they are not prohibited from accepting transfer fees. I usually see 12-month caps on transfer fees. This means that you pay a percentage for the first year you do business with the new customer. But some referral fees are paid on a long-term scale (i.e. as long as the new client remains a client of your agency). Your accountant can advise you accordingly.
But I recommend you structure the agreement (and your calculations) on the basis of revenue, not on contractual income. In other words, payments are based on when you receive the money. How many times should you pay the fees? Monthly is an option, although quarterly is definitely easier. You probably want a little delay – rather than immediate payments – in case a customer “repays” a refund. (But remember that disgruntled customers don`t always want refunds.) I am not a lawyer or CPA, so you want feedback from your legal and financial advisors. That means — to save you money, here`s a free model for transfer fees, so your lawyer can write a legal agreement: if you want to pay a 0% transfer fee, because you don`t like wire transfer fees or because you want a de facto agreement with another company, that`s perfectly normal. Many agencies do not pay a transfer fee; in this case, the referees will receive a thank you note and perhaps a symbolic item with a face value (z.B. a gift card worth $50). Don`t complicate things if possible. I recommend using a process related to your existing systems. You can create the referer z.B. as a “commercial” in your accounting software, so you can simply report on the recommendation fees due (“commissions”) instead of having to calculate everything manually.
Posted In: Uncategorized