Referrals amongst contractors

[Jeff Robison 14]

What do you consider a decent referral fee? Say I give a deck guy a lead that I do not want, or they give me a referral on a big commercial job.

I am thinking 10% of the total job if they get it. Is this too low? Too high? Or just keep it a good gesture amongst friends in the industry and nothing gets exchanged?

Jeff Robison

Clean Up Atlanta

678-360-2518

[Jeff 232]

I quite often will give another contractor $50 - $250 as a thank you, Keep it informal is what I like to do. Most of the time its just a thank you and return the favor, Unless its talked about, a percentage when you get the call

[PressurePros 249]

It depends upon what a company's acquisition cost is for leads. If a guy has a marketing budget of 10% gross sales and you send him a hot lead that turns into work at his usual margin, then asking for ten percent is a very reasonable fee. The problem is, most guys won't see it that way. I think Jeff is right. Keep it informal and exchange leads. If you think it will be too one sided make a prearranged price per lead. If you came to me and offered me leads at 10% of what I am charging I would say no thank you.

[bigchaz 157]

Not everyone is thrilled by giving out their prices, so percent might not be the best method. If you get to know the guy good, come up with a service that you wont do at all and swap with him even trade.

The benefit comes from not having to do the job you don't specialize with. I do only wood restoration so I'd be more than glad to refer some roofs to a guy that does roofs. Seems like most roof people and house washers don't want the hassle of dealing with wood so they send it over to me.

On a particularly large job, I'd make it a point to send some money their way, or do a little more up selling for them when you do bids

[newlook 265]

I do a 3% to 5% payout on any and all referrals!