Our clients are dental clinics and a good new client spends $10k-$20k with us the first year. In this industry, word of mouth is very important for trust. We have personal relationships with each of our clients. There's one client who likes to nag a bit to get a lower price. I offered the client a 10% referral bonus but she said that she would refer us clients anyways without the fee. If we offer the bonus then it's not internally motivated and we feel like they are doing it for the money but not because of our good service and relationship they have with us.

I think you have your answer if clients are welling to refer without a fee. If there is a fundamental reason (for instance, you want to influence the pipeline for new prospects), then why don't you segment some of your clients and test the monetary referral aspect at a lower than intended rate. If you find the quality of prospects doesn't tarnish when doing so, you can release it out to all clients. However, if there is no effect or you are not getting the return from those prospects they refer - you can always discontinue the referral program (and go back to clients referring without a fee).

I think you will have a gut feeling + seeing the #'s if there are cases where clients are doing it for the money (i.e. prospect quality is down).

If this answer resonated with you - feel free to request a followup call.

Many thanks and good luck!

Answered 6 years ago

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