In my experience, more often than not, it is a transfer tax for 10% of turnover. The second most common: a transfer fee of 5% of turnover. Then it`s a mix – for example, 20% of the first month, and nothing after. 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). 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. You must also be separated, but related to how you handle the recommendations of your agency`s current staff. Do you expect free transfers as part of your job? Will they receive a certain level of commission? Do you receive a nominal flat transfer fee? There are many options that go beyond the scope of this article.
But you will soon want to pin the details to avoid misunderstandings and hurt emotions later. Everything is negotiable. But I find that agencies that have promised transfer fees “forever” tend to regret it later. By expanding your agency`s referral partnerships, you can eventually hire a partnership manager to lead the entire process. But you won`t need this role to begin with. Recommendation fees are a kind of commission paid to the coordinator in a transaction – a person who is responsible for the arrival of a customer in your business. Sometimes this tax is paid in exchange for the introduction of business, but it is more often directly related to a sale. Depending on how you want to conduct your recommendations, there are many different schedules that you could use for referral fees.
It depends on what motivates your stakeholders best. Keep in mind that transfer fees are not legal for all sectors, so you need to do some inquiries to make sure you haven`t set up an illegal system. Talk about money at an early stage, even if the initial transfer would or would not. Maybe you want to get them under contract before you make the introduction, but it`s worth an exploratory interview first. Wondering what is normal or typical to pay in agency referral fees? In search of an increase in turnover, an agency owner asked me for reference criteria in executive coaching: if your referees do new business, you will find new business that you may not have yet had access to thanks to the expertise and links of the referents. And transfer fees motivate intermediaries more than the prospect of doing a service. Who doesn`t want a reward – especially a cash bonus – for helping someone? 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. Research costs are a reward and therefore an incentive to maintain business contacts and resources that pass on the needs of a company or organization to potential customers or partners. While contracts are not necessary in such agreements, the structuring and approval of the terms of research costs can be maintained by all parties on the extent of the compensation.