I currently am a part owner of a website design company and we are trying to figure out what a good finders fee to give is? And is percentage better, or flat fee?
closed as off topic by John Conde♦ Oct 7 '11 at 11:47
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If "Customer A" refers a client, and that client purchases one of my smaller packages, I would give Customer A "X" amount of dollars.
But if "Customer A" refers a client, and that client purchases one of my larger packages, I would give Customer A "X + Y" amount of dollars.
Because my business is advertised by word-of-mouth. My existing customers are my best advertisers.
Another idea that I thought of would be to provide the FINDER an additional service, instead of money. I don't want to give my hard earned money away. Neither do you.
But if Customer A just earned you another job, then print them some new business cards with that new logo. Or update that gallery script some new CSS3 version. Or optimize some of their keywords. You get the idea.
A finders fee needn't be a finders fee. Maybe a valuable service would be a better fee. :D just my dos centavos amigo!
I would err on the side of being generous, while maintaining your necessary margins. You will get more business that way.
For our SAS products, we give a 25% recurring comission to our affiliates. I would assume if you are doing custom design work then it would depend on each finder. You may have a finder that brings you a client that is ready to buy your goods. I would reward a finder that can bring you such high calibur prospects well. You may have another one that brings you a MOOCH that takes up your time, grinds on price, and at end you break even on your time. Pay those finders less.
Perhaps consider a sliding scale. Where you have a set hourly rate $50 per hour. If someone refers you a client you share 50% of what you charge over the set rate. So if you charge $80 per hour, then you would give the finder 1/2 of the project overage. $15 x 80 hours, as an example. This model encourages holding value, bigger projects, and gives you higher returns than your minimum that you can re-invest in marketing or getting new affiliates.