Download This Special Report

Tuesday, October 31, 2006

High Quality Referrals Come From Business Agreements

When you form business agreements with other IT businesses, you can get great referrals. In the B2B world, the referrals you get from non-competitors are those that will give you long-term service contracts, which is what you want.

But what kind of fee should you give to those holding business agreements? It depends on specific factors, and following these guidelines can help you create the best business agreements:

1. Determine the worth of your average client relationship during the course of a year. If your business agreements gives you leads that almost always turn into sweet spot contracts, then $500 is pretty reasonable for a referral fee.

2. If the business agreement is just giving you one-time service calls, you shouldn’t pay a huge referral fee.

3. If you set up a business agreement, you should make sure you are getting the best referrals possible. Keep them simple.

4. In the case of fixed fee business agreements, name it a finders fee and use about $250 - $500 as a standard fee. You might go up to $1000, but only after you have a good set of referral criteria that would make that amount worth the effort. A business agreement that is based on a revenue percentage also might work well.

In the end, business agreements are created by gauging your comfort level with different strategies. Business agreements are a great source for referrals, but don’t get into paying high fees to companies if you’re not getting sweet spot clients out of the deal.

Added By: Computer Consulting 101