Referral Fee Commission Agreement

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. Do you want my individual feedback on your referral fee plans? As soon as you draw up your initial plan – so that there is something tangible to discuss – I am happy to help you make a call advice. This proposal and the Commission`s agreement are less detailed than the other agreements of this subcommittee. So you can use one of the other documents in this sub-file. You can treat recommendations « non-in-% » – including flat fees, gift cards and other rewards. Talk to your accountant to understand which recommendation rewards are deductible. Here`s my step-by-step process that helps you decide how you handle transfer fees in your agency. Don`t forget to involve your lawyer and accountant as soon as you design the original policy.

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. The main difference between a recommendation simply recommends a product or service and a reseller sells it himself. You don`t need to offer a transfer fee, but for most agencies, this tends to be less recommended, because people don`t have any extra incentive to do initiations. Most commission programs contain language for what is qualified for a commission or referral fee. This may include a signature from the agency, that the referent receives « credit » for the transfer fee – and that there is no transfer fee without the mutual signature in advance. If you`re already paying sales commissions, the total net effort for the reference activity is probably similar to what you pay today for outgoing prospects – because the recommendations are incoming leads and agencies tend to pay a lower commission for incoming leads. For example, you can pay 10% for outgoing leads or 5% for incoming leads. In this case, you can pay 5% to the referent plus 5% to your seller who completes the financial statements. They could consider a « fair-middle » approach. For example, if you know someone but you haven`t been in contact for years – and you only get there now, because someone recommended you contact them – I would say that you owe at least some of the referral fee to the speaker, because they triggered the behavior of a sale. If you want to pay a 0% referral fee, because you don`t like the referral fee, or because you want a substantive agreement with another company, that doesn`t matter.

Many agencies do not pay a transfer fee; in this case, the referees will receive a thank you note and perhaps a symbolic item with a face value (z.B. a gift card worth $50). Some agencies opt for a flat fee – and many agencies only pay a transfer fee; Learn more below. Don`t you want to pay forever, but encourage recommendations to long-term customers? Consider a step down structure (z.B 10% of sales in the first year, 5% in the second year and 0% after). Yes and no. Sales commissions are for most agencies a cost of activity. Right now, if you don`t make sales commissions – even as payments to yourself, if you`re the seller as the owner – your margins are now technically « overestimated. » I am not a lawyer or CPA, so you want feedback from your legal and financial advisors. That is to say – to save you money, here is a model of a free recommendation policy for your lawyer, to design a legal agreement: for example, I have created a program of recommendations specifically for current and past clients. When they introduce me to a new customer, both parties (referer and refer-e) will each receive a $500 credit on their next invoice. A recommendation agreement describes how an af