Paying Referral Fees to Subcontractors

Dear Kirstin,

I am a faux finisher and I do some murals, too. When my clients ask me for referrals for designers, I give them names
of people whom I think can help them. Should I let the designer know that I referred them?

- Arlene, Baltimore, MD

Dear Arlene,

Not only should you let the designer know you referred someone to her, you should also ask for a referral fee or a
percentage of the contract if she gets the client.

In the creative industry it is somehow "standard" for designers to get a percentage of contracts for murals, faux
finishes, and other artistic work, but somehow it is not standard for the reverse. He who has the client's trust is the
one who holds all the power. Should you be the one who the client trusts enough to ask for a referral, you should be
rewarded for giving that referral.

If someone refuses to pay a referral fee or percentage for work you handed to them, then work with other designers or
vendors. There are plenty of people out there who understand the value of a "hot referral" and are thrilled to reward
people for them.We all know how difficult and costly it is to get a new client and how much time and effort is spent on
marketing and selling. If someone hands you a "hot referral" that leads you right to new business, you should reward
that person with a check. Don't see it as a loss of income, see it as a gain in new business. Without the referral, you
wouldn't have had the business. Most successful businesses -- in every industry at every level - make a portion of their
revenue from money paid to them for referrals, and you should, too.

- Kirstin