Paid referrals: are they really such a great idea after all?

Posted by Ian Donaldson from My Business Advice Ltd on 30 April 2009

Paid referrals: are they really such a great idea after all?

- On the face of it, paid referrals and client incentive schemes seem to be a good way to win more business

- According to one networking expert however, these schemes have a fatal flaw

Client incentive schemes, where referrers are rewarded for passing business on to their contacts, are becoming increasingly popular in some areas of the business networking community.

While on the face of it, such schemes seem like a good idea, with referrers incentivised to pass on work and clients. Business expert Andy Lopata advises caution however.

In a new business TV show on yourBusinessChannel, Lopata asks, if your contacts really have faith in you then why would they require a financial incentive to refer you? And if they don’t have faith in you, would money really compensate for the risk of damage to their reputation?

Watch this thought-provoking show right here:

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