If you are specializing in a very narrow segment of your industry odds are that you will have many people calling you looking for a service you don’t provide. A recent post on a yahoo group yielded several emails from people looking for a weekly lawn mowing service. The problem is that there are over 50 companies in my town doing it and I am not one of them.
In the past, I have referred people to landscapers that I am friendly with and know do a good job. However, I have not received any reciprocal referrals. Do I keep on referring them to my so called friends or just tell them I don’t do that kind of work? Each job is worth over $1000 a year and usually leads to adding on several neighbors within the first two years.
Some people have suggested collecting a referral fee. While a few extra dollars is always nice to have it doesn’t help grow my business any faster.
#1 by John Seiffer - Business Coach on November 7th, 2006
I would not ever take (or give) a referral fee. You loose all credibility about your referral being in the customer’s best interest. And I would not hesitate to mention that you don’t take any fees.
Your first reason for referring someone should be that you think they are the best person to serve your customer. That means you have to know them well enough (both the customer and the other provider) to know.
Having said that, you might want to develop a stronger relationship with those to whom you refer. Find out why they are not referring you. Some don’t because they are lazy. Some don’t because they are getting referral fees from someone else. Some don’t because they don’t know you and your work well enough.
The ones you want a relationship with are the ones who feel that referring you is in the best interest of their customers. They need to know you well enough, know their customers well enough and also know the value of that type of in-the-customer’s-best-interest referral. It takes time to develop a network of providers like that but it’s a valuable service you can provide to your customers. Dealing with other providers like that should bring customers to you as well.