Should An Upholsterer Pay Referal Fees?
Should an upholsterer pay a referral fee from a decorator or another business? When an upholsterer is first starting out, or low on work, he may be desperate and be willing to accept almost any conditions, just to have work to pay the bills.
Look at it from the client's point of view. Is a paid referral really unbiased? If a decorator or other business is getting a kickback from a particular upholsterer, will the client get the best service?
When someone gives a referral, there is an implied recommendation of outstanding quality or service. The referral says, "I highly recommend this shop. This shop is a shop that you can trust." The client is referred to a good shop. The best interest of the client is a priority.
However, when a kickback is given, then the best interests of the clients are made secondary to the bias of the referring party. When a kickback is paid to a referring party, there is the tendency to give referrals that benefit the referring agent, rather than the client.
Kickbacks are unhealthy
Paying Kickback puts the upholsterer in an unhealthy relationship with the referring agent.
- By the very nature of the transaction, the fee arrangement is often kept secret from the client. (How many workrooms would tell a client "I paid that decorator to send you to me"? and, does the decorator tell the client that he/she gets a kickback from the workshop?)
- The kickback puts the referring agent in more of a superior-subservient relationship with the craftsman.
Aren't Kickbacks Just Advertising?
Some might say that paying referral fees are just another form of advertising. However, one of the main differences between referrals and advertising is that clients know that the workshop is paying for advertising, so they compensate for any quality claims in the ad. On the other hand, when someone refers someone to a workroom, there is kind of an unspoken assumption that the referral is a testimony from someone who has had some work done, or has seen the work of the craftsman. A referral is general assumed to be a recommendation about the craftsperson being someone extraordinary. A referral is often tainted when there is a fee involved.
When I Give Referrals
On the opposite side of the fence, I often get calls from clients about types of work that I don't do. I refer those jobs to other craftsmen. If I've seen and approve of the quality of the other craftsman, I'll give a recommendation. If I haven't seen their work, I'll tell the client that, or I may just refer the client to the phone book. I don't expect to be paid when I send other shops work. I do what is best for the client.
I don't pay referral fees. The quality of my workmanship is my referring agent. I also have lots of before and after pictures of my work, as well as slide shows that show the work at various stages. A potential client can see for herself the quality of my work. By watching the slide shows, it's almost like letting the potential client watch me doing some of my previous jobs all the way through.
Instead of paying referal fees, Advertise!