I would go discounts rather than cash as always better methinks to reduce income that you may never actually receive than to pay out money that you already have.
Only issue really is that it creates a familiarity threat to your objectivity where clients introduce clients. It also creates further issues in relation to MLR where one may be expected to reduce the required checks as these are freinds of existing clients so you may end up inadvertantly upsetting existing clients with the checks that you need to perform.
On the back of my business cards I've got the "We Love Referrals!"that is one of the Vista Print options but I don't actually advertise incentives as such as my hypothesis that if I do a good job for clients then they will recommend my services to others without financial incentives.
If a client asked about an incentive scheme for introductions then I would offer a 5% reduction on their bill but it would very much be down to the client asking about it rather than me offering it.
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
My current thinking right now is offering £20 cash per referral. This would be on the understanding that the referral becomes a client, and that the money would be paid on payment of the first invoice by the new client.
This leave me a bit of room for maneuver, as I still have 6 weeks or so between taking on a new client and their first payment.
My other thoughts are to offer the referring client and the new client 50% off their next invoice and first invoice.
My reasons are that I know that good advertising is difficult to buy. Ad's in papers might get a zero return, the same with flyers and letters. Word of mouth is the best I'll get, and if I only pay when it's successful surely thats a win-win-win situation for all involved?
The other good thing is that I can push this when client numbers fall (by sending clients letters or putting a reminder on the invoice), and ignore it slightly when numbers are higher.
There should be no need. I want people referring me because I do a good job for a fair price. If people are referring me because they want to reduce their bill, as Shaun says, you could end up upsetting clients somewhere along the way.
That said, for my mentoring clients, who are predominantly bookkeepers I offer them discounts for referring Accounting clients as there will always be a mutual relationship with the client and bookkeeper.
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Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
I am in the process of setting up my accounting and tax business.
I am going to offer 20% of the first fee of the new client as a kick back incentive to the existing client who refers them.
So for example if the new client first fee is £250 the existing client would get £50. This would be paid to the existing client when the new client pays their fee. Would be paid by either BACS or cheque (whichever the existing client prefers).
I am going to reserve the right to retain any incentive and deduct from any fees of the existing client that are outwith the normal trade terms.
I did think that James, but when I read the terms I came across this one, which seems to say we can't do that. Can you clarify the point, because it would be great if we could?
1.10.Asperity Employee Benefits Ltd. provides You with the information and services on the Website for Your own use. You are not entitled to use or distribute the information on this site for any purpose other than for your own personal use in transacting with Retailers. Use of any content of the Website for any other purpose, including any commercial purpose whatsoever, is contrary to these terms and conditions. You must not display the contents of the Website in a frame surrounded in other material that Asperity Employee Benefits Ltd. has not originated.
That clause refers to allowing others to use the site logged on as you, which is not allowed. Also you are not allowed to copy/paste the site anywhere.
You can buy the vouchers or cash cards yourself, then pass them on to someone else as a gift/reward (be aware of the bribery act).
Just remember you will need to activate the cards via ICB's benefits website before you give them to someone.
