Should you reward client referrals?
Referrals are always a good source of new business and can work both ways for practitioners and their existing clients. Rachael Power reports on recent exchanges on the subject.
An AccountingWEB member recently faced an ethical and moral dilemma when his client asked for a referral fee for introducing him to a contact who could attract lots of new business.
Michaelbeaver turned to Any Answers for advice: “Curious to know if anyone else does this routinely, and if so what do you offer?”
The answers ranged from staunch support of referrals to those who were “gobsmacked” by the thought of paying clients.
PracticeWEB's demand generation specialist Alex Tucker also took an interest. “Looking at the thread, it struck me that only one participant felt that rewarding referrals is wrong. They thougt if you do a good job, you should get referrals without having to offer cash,” said Tucker.
"The statement assumes that you have the right to referrals business if you do a good job, and also that prospects don’t have several people making a range of equally good recommendations."
Tucker believes that practices do need referrals. Research on customers of a German bank by Christophe Van den Bulte at Wharton University found that...