Are agents allowed to pay/gift for referrals?
- Thread starter Spin
- Start date
- 11,544
Yes and no.
The referral incentive cannot be tied to the eventual sale of a product. It has to be for the referral only, regardless of whether they buy or not.
The referral incentive cannot be tied to the eventual sale of a product. It has to be for the referral only, regardless of whether they buy or not.
- 11,544
Depends on how good you are and how serious they are.
That depends on how much you'd pay for a lead, which you're essentially doing here.
I'd rather pay 50 bucks per to meet a client's golfing buddies than send that money to someone generating Facebook leads.
- 5,534
There are a couple of other things to consider too.
1- In addition to the DOI, do any of the carriers, clusters or other entities you deal with have any rules on this?
2- If someone thinks you can do a good job to help their client/friend/family member etc. should you give them a gift? If they are giving a referral for the "right" reason, should you give them a gift? Will giving a relatively small gift for the referral somehow cheapen the process or make them rethink if they and you are helping the person, why would you give a gift? I read an article about Google, who many years ago found that their best hires were from referrals. They then started offering substantial cash incentives for employees offering referrals. Guess what? Their referrals didn't increase, despite the incentive, because people would refer their friends and family because they genuinely wanted to help their friends and loved ones, the cash bonus had no effect! Furthermore, and this may be a bad example, but my understanding was that when Bernie Madoff was running his scam, he would pretend that he was too busy to take new clients and referrals, which made people want to do business with him even more. Just food for thought.
1- In addition to the DOI, do any of the carriers, clusters or other entities you deal with have any rules on this?
2- If someone thinks you can do a good job to help their client/friend/family member etc. should you give them a gift? If they are giving a referral for the "right" reason, should you give them a gift? Will giving a relatively small gift for the referral somehow cheapen the process or make them rethink if they and you are helping the person, why would you give a gift? I read an article about Google, who many years ago found that their best hires were from referrals. They then started offering substantial cash incentives for employees offering referrals. Guess what? Their referrals didn't increase, despite the incentive, because people would refer their friends and family because they genuinely wanted to help their friends and loved ones, the cash bonus had no effect! Furthermore, and this may be a bad example, but my understanding was that when Bernie Madoff was running his scam, he would pretend that he was too busy to take new clients and referrals, which made people want to do business with him even more. Just food for thought.
- 1,110
That's how I've always felt about this. I've never once referred a friend or family member to a company for a cash incentive. My referral is my reputation. You think I'm willing to put that on the line for any cash amount with people close to me?
- 5,534
Oh yeah, I'm right there with you. I own some reasonably significant assets, and my reputation is the most valuable thing I own. By far.
- 6,019
I just called your neighbor. They told me that you've been up flying around the yard again at all hours of the night. They are not happy. Your getting the fruit cake you gave them for Christmas back, and they are asking for a restraining order against you.
- 5,534
I just called your neighbor. They told me that you've been up flying around the yard again at all hours of the night. They are not happy. Your getting the fruit cake you gave them for Christmas back, and they are asking for a restraining order against you.
Uh huh. Since we are on the topic of referrals, I think this would be a great opportunity for me to refer you to the dictionary definition of jealousy.
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