Incentivizing referrals with money is awkward

There’s something awkward about incentivizing referrals with money. I can’t help but cringe every time I see someone offering or asking for a referral fee.

The first time, also the last time, I was involved in a referral arrangement was 11 years ago. An organizer of a popular industry event offered to refer new businesses to my firm for a 10% referral fee.

He sent us more than a dozen prospects but not one became our client. This guy felt we were too picky, and I felt each lead was not the right type of work for my agency.

The challenge was, we were not offering a product or commoditized service. We would not engage unless it was an excellent match – kind of like dating.

To take the dating analogy further, would you ask your friend for a referral fee to introduce her to someone you think would be a good romantic match?

“Hey, I know this guy you might like. I want to introduce you. If you end up dating, can you give me $500?”

I guess not.

The best referrals are those that come from a pure intention to help – without any monetary gain. The joy of seeing a successful match should be more than enough reward, and it’s the right type of reward.

P.S. OK, if you insist, you can buy me lunch after the project is successfully completed.

Published by belle

Law school drop-out, ex-digital agency owner, mom of two. I blogged about entrepreneurship, service businesses, career growth and parenting on

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