A referral is supposed to come from somebody who genuinely likes your services and you as an individual-I believe throwing money into the mix, especially if that is not disclosed to the client, perverts the entire process. Referrals are based on trust-if a bride is asking a vendor for referrals to other vendors, it is because she trusts that vendor and their opinion. If they are simply referring a vendor that will cut them a check, and not necessarily the vendor that is the best fit for that bride, that's not right. This is the reason I'm also opposed to groups like BNI that attempt to coerce you to only refer one person for any particular service.
I agree with the poster above-I will offer special deals to customers referred to me by my vendor friends, and I do send thank you cards and sometimes buy a drink or two for other vendors, but I have an aversion to monetary kickbacks.
As a planner, there are companies who offer a discount to us so that we can markup their service and make more money. We love it when they offer this! But, not for the reason you might expect. At Details, we do not accept commissions; these supplier incentives are passed directly on to our clients. In addition, we invite qualified, reputable suppliers to become Details Preferred Partners. There is no charge to become a PP. These are suppliers who wish to be placed on our Preferred Partner list, linked to our website, and occassionaly thanked on our Facebook page. In exchange, they must offer a predetermined discount to our clients which they cannot receive any where else. The list is not exclusive. We have several photographers, florists, DJs, etc and make our recommendations based on the clients' personality, style of event, and budget. Our clients love that they have the option to "shop" from our PP list, but there is never any pressure to use those suppliers.
I will not accept any sort of commission or kickback for referrals that I give. I refer the vendors that I do because they do a great job and make my clients happy and therefore my job easier. However, as a hotel venue, I do offer planners that bring me a wedding the bonus of their meal being free (so the client doesn't have to pay for it,) and a free room for the day to use as their office, store a change of clothes and shoes, freshen up, etc. The room has a fridge and microwave as well as free phone and internet so they can really work from there. In exchange, we know where they are and how to reach them at pretty much any time during the day and they are on-site to help us put on a great event!
I have another way to look at this. I just started a client referral rewards program where I offer points for each referral a current or previous client sends me. The more points they collect, the better the reward! They can redeem their points for discounts off their current contract (obviously current clients only), for cash or other rewards. This gives back to my clients (as an appreciation for the referral as well as a thank you for hiring us for their event). I allow any/all of my clients (who'd like to) to participate. And it's rewarding for both parties, I get referrals and they get rewards! I do tell them to only refer us if they were completely satisfied with our services to them and if they'd freely like to refer us. And so far it's been a positive experience for all participating parties!
I appreciate the feedback. I've always felt funny about offering "commissions" to vendors. However, I know of a couple who deal with some high end brides that will never come to me because the money's not there, no matter how good I am. I wonder if the brides have any idea that this even goes on. It sure would make me think twice about whether the vendor really had my best interest at heart if I were the bride. I do like the discount idea though.
I do not accept to give out payment for referrals. I feel that word of mouth referrals to vendors that I feel give the same quality of service will bring me back the same good will.
My feelings on the subject; besides the fact that in many cases they are illegal is that if someone has to pay money in order to get business then that speaks for itself. I find that sometimes when I work a day of coordination I can spot the vendors who work on kick-backs because they just aren't as good as other vendors. I spend way more time putting out fires.
The practical side is that not only does it mean that in many case the quality isn't very good; but many vendors who offer kickbacks pay for those kickbacks by actually increasing their price. The couple ends up getting a lower priced service; but paying more money. That's not fair to the couple.
I always ask that any money offered to me be put towards a discount to the client. Them asking is usually enough for me to not feel very inclined to want to work with them again. I don't get offered kickbacks much anymore because they know I won't accept it.
Of course referrals are great, and we do show our appreciation. This is how it works!