Is it ethical to give a cash/gift or commission for referrals?
Fellow guerrilla Vince Golder posted a question on the Guerrilla Marketing Tips for Small Business forum on LinkedIn, asking:
“I’ve had a couple of debates over the years with people who were quite firm in their belief that any form of cash/gift commission given in return for a successful referral was a bribe!! I would rather pay one of my own clients or contacts a just reward for promoting my business, than an expensive agency or media company.” What do you think?
Let me start by saying that cash, gifts and commissions are three very different things. Each may be appropriate or not, depending on the circumstances. Guerrillas ALWAYS look for appropriate ways to REWARD customers for their business.
As I’ve said before in this forum, the best way to get referrals is to ASK for them. (See my recent blog on the topic, March 4, 2009, below) And only reward referrals if you want to KEEP getting them.
No, it is not a bribe. And no, it is not enough to simply express your appreciation.
A nice Thank You card is a good start, but don’t be tempted to send it by e-mail. Personally, I use Hallmark, because I care enough to ____________________ .
Cash is awkward, so enclose a gift card instead. Coffee at Starbucks, free fries at McDonald’s. Better still, relate to their interests: something from Amazon or Borders for bookworms, or office supplies from Staples to reward the whole office.
If the referral is unsolicited, keep the amount something under $100. For bigger referrals, consider bigger rewards: a bottle (or case) of nice wine, a magazine subscription, dinner for two somewhere special, or the fruit-of-the-month club from Harry & David. You can always take them out, for coffee, for lunch, for a round of golf. We’ve given clients pairs of plane tickets. We once took a dozen people from United Airlines to a Rockies game.
There are two guerrilla gifts you can give to people who can’t accept gifts: flowers and food. For women, send a simple bouquet with a business card, delivered to their office by FTD. A variation is to send a large bouquet (something everyone can enjoy) to the Reception desk, with a “Thanks Everyone” note. And if you send flowers on a holiday, like Easter or Halloween, all the better. If you customer is a man, send roses. Red ones. You send me a dozen red roses with a “Thank You” note, and my wife is going to love me, and I’m going to REMEMBER you.
Food works if you send enough to share. Send Domino’s, KFC, or a monster Subway at lunchtime. Or a big birthday cake decorated with your logo and a big “Thank You” in icing across the top.
A professional speaker routinely pays bureaus 25% commission, but the agent who recommended you sees only a fraction of those funds. So I send the rep a very large box of Godiva chocolates. (Wasn’t it Will Rogers who said, “I never met a chocolate I didn’t like.”)
In another example, Wendy Kruger, with Speakers Platform in San Francisco, booked me for a string of several seminars. I knew that she was a fan of Cirque du Soleil, and a bit of browsing revealed that there was an engagement running in San Jose. So I used the Internet to book a pair of VIP back-stage tickets in her name at Will-Call. She took her boyfriend out for a surprise date, and nobody’s the wiser. (That is just SO California!)
If you’re closing a big contract with a new customer, buy a nice pen. A RILLY nice pen; a Cross or Mt. Blanc. After you’ve signed the paperwork, “accidentally” leave the pen behind. They’ll quietly put in their desk and remember your generosity every time they use it.
If you’re concerned about ethics, give them an award, a brass plaque or silver trophy engraved with your appreciations. It will be given a place of honor on their desk or bookshelf.
Here’s guerrilla work-around; send an age-appropriate toy for their kid. Who would begrudge a child a new toy?
Another loophole: if the item has your logo on it, it’s a tchotchke, not a gift. It’s not a bribe; it’s ADVERTISING. So you can send them a coffee mug or a golf towel or a $200 down parka, or any useful item for that matter, imprinted with your advertising, and they will wear it with pride. And they’ll tell all their friends.
Still not sure what to do? I once received a birthday card that read, “People who say you’re hard to shop for obviously don’t know where to buy beer.”