A couple weeks ago I attended a local networking seminar. The speaker was a nice lady who speaks about attitudes and positive reinforcement, that kind of thing, I know she speaks all over the country. We talked after the meeting and she said she was happy to have met me because she needed another VA. We exchanged info and that was that.

Today she called me, not to hire me but to refer me to another client of hers. Here is my question, she said right up front "I have a client I would like to refer to you for 20% of your income (from this client) for the next year." I was a little taken back by her statement because in the past, I have paid a referral fee but not a kickback (basically thats what it is) for a whole year. She said, "I would like to refer people to you so basically you dont have to market, and I will refer you, I have lots of clients." She said the other VA she works with is too busy to take any more referrals, thats why she's calling me.

I dont know why but this just sounded fishy to me. My first instinct was to say thanks but no thanks... but then I thought, people pay for marketing all the time....is this kosher, would I do this if I were in her shoes?

What would you do? Im confused

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www.sageva.com
Shelley Halpain,

Well, I would not make an immediate decision. Are you the only VA she wants to recommend or are there others? I know marketing is a PIA but at least when you do your own you are researching whos these people are.

All client relationships aren't a match made in Heaven as we all know. What if you start working with one of her clients and it doesn't work out? Would you owe her anything anyway? Would she apply the credit (if you already paid) for the next client?

Also would every client need what you offer, how many clients does she have? To me I would want to know the answer to these questions.

These are some of the things you may want to think about. Have you Googled this lady, do you know anything about her background? I know everyone loves another stream of income. But I for one would rather pick my own clients. You can always ask to test drive it and see how it goes? For me the contract language would have to be very friendly to me. I always like an easy way out for my own protection.

Guess I'm just not that trusting of other people. My 2 cents only. Good luck whatever you choose to do.

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JoCarole
http://www.shoreofficeservices.com

Hmm, this reminds me of the way that temp and staffing services operate. I've never been in a situation where I was expected to pay for a referral, so I'm not exactly up to speed on how it works, but like Jo Carole, I'd be concerned about what happened if the VA/client relationship didn't work out.
Plus, I'd think that you yourself would need to raise your rates by the 20% in order for it to be a financially positive situation for you.
I don't think I personally would feel comfortable entering into this type of situation.

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~Tina Marie Hilton of Clerical Advantage
& author of the VA Survival Guide & Workbook

Before becoming a VA, I owned a contractor referral network. I'd view and sometimes use the work of local contractors and then refer them to homeowners for a percentage off the total bill. If it were for an ongoing service such as a cleaning crew or gardener, I'd receive a percentage monthly for one year. The stipulation was though, that the homeowner was MY client, not the contractors for that one year period. The homeowner paid me, and I paid the contractor less my fees.

A partnership like this can be beneficial, but you need to know whose client it is for that one year period. Talk to the other VA and see what she thinks about the arrangement, how it works for her and what her mindset is.

Also keep in mind that when a VA subs out work, we don't pay the sub the full amount that we earn, but a percentage as well. That's 20% less marketing that you'll have to do to receive that client.

This could be lucrative for you if you play your cards right. Talk to the other VA and take a good look at any contract that she'll most likely want you to sign so that you can make an informed decision.

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April Sullivan
The REVA Academy

April has some good points especially about making sure the client is defined as being your client. I also agree with her advice about speaking with the other VA.

The other things that I would consider are:
1) Would the types of clients she would be referring similar to what you would consider to be your ideal client? You would certainly want the option to turn down working with a specific client if you felt they weren't a good fit.

2) Are you willing to fill your practice with clients where you are getting less than your full fee? This might warrant a discussion with her that you are only willing to take on X number of clients as long as they sign on for X numbers of hour per month.

3) Do you consider the amount of time/cost you put into marketing to be equal to the money you would paying out to her over a year? Personally, I don't know that the cost of my time and effort that I put into marketing would come out to a cost of 20% of what I earn from each client. This is where I would consider either lowering the percentage or negotiating a tiered system with her where if she referred and you retained 5 clients then she would get 10% for the 1st three and 15% or whatever for the any additional clients.

My own personal feeling is that the price seems too high.

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Kimberly
Facebook Marketing Magic!

You all make very good points, thank you for your input.

I have no problem giving a fee to someone if they send me clients and it becomes a working relationship but I dont think I am comfortable with 20% for a year... that seems a bit over the top to me. My husband said in the music business a 10% finders fee is pretty standard for 1 tour (generally 3-6 months).

My gut reaction was to say no but in retrospect I think that was mainly because of the way she came across, very blatant and almost rude to be honest... she was prob in a hurry or something...

Im going to call her today with my thoughts and go from there...

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www.sageva.com
Shelley Halpain,