refer a friend cashback

[sddoug]

I added solar to my home last year and recently referred a friend to the same company. When his project was complete, I received a $500 referral bonus which I split with my friend.

That got me thinking that it would be great if everybody could get this cash back when signing up for solar. I dug around, and it seems almost all solar companies offer these refer-a-friend bonuses. I set up a website that acts as referral system and then sends the referral bonus minus a small commission to the homeowner.

I won't post the site here - I think that is against the forum rules, but will be happy to respond to private emails.

Do people think this is a good idea?

-Doug

[bando]

I added solar to my home last year and recently referred a friend to the same company. When his project was complete, I received a $500 referral bonus which I split with my friend.

That got me thinking that it would be great if everybody could get this cash back when signing up for solar. I dug around, and it seems almost all solar companies offer these refer-a-friend bonuses. I set up a website that acts as referral system and then sends the referral bonus minus a small commission to the homeowner.

I won't post the site here - I think that is against the forum rules, but will be happy to respond to private emails.

Do people think this is a good idea?

-Doug

not a bad idea however i had one rep tell me that they just tack it on to the proposal if there is a referral fee associated with it.

[sddoug]

not a bad idea however i had one rep tell me that they just tack it on to the proposal if there is a referral fee associated with it.

I thought about that. Wouldn't they then lose that person's business to a competitor?
My guess was that the referral bonuses are part of marketing that is split among all customers.

[Mr. Vegas]

It's a great deal. A few people I know have paid most of their lease costs in referrals. If you're on Facebook/Twitter etc. it's a great way to market your system to family members, set up the appointment with your salesperson and collect the referral fee. One company gives $1k (pre-tax) for referrals. With the expanding amount of solar installs going on in NY & NJ, you can get some good payments going.

[J.P.M.]

not a bad idea however i had one rep tell me that they just tack it on to the proposal if there is a referral fee associated with it.

If you've wrung all the $$'s you can out of a vendor, they' re likely to either mark it up to mark it down before quote or cheap out for the referral amount if they get the job. in any case, you may not be doing the referral any good. Think like the vendor.

[J.P.M.]

I added solar to my home last year and recently referred a friend to the same company. When his project was complete, I received a $500 referral bonus which I split with my friend.

That got me thinking that it would be great if everybody could get this cash back when signing up for solar. I dug around, and it seems almost all solar companies offer these refer-a-friend bonuses. I set up a website that acts as referral system and then sends the referral bonus minus a small commission to the homeowner.

I won't post the site here - I think that is against the forum rules, but will be happy to respond to private emails.

Do people think this is a good idea?

-Doug

Did you get a 1099 to split with him too ?

[bando]

If you've wrung all the $$'s you can out of a vendor, they' re likely to either mark it up to mark it down before quote or cheap out for the referral amount if they get the job. in any case, you may not be doing the referral any good. Think like the vendor.

yes i thought about that too. a good friend of mine is looking into solar within a few months time and although i will refer her, i want to make sure she gets good $/watt too. but it's difficult to compare jobs anyway. she has the spanish s-tiles which are a PITA for installs. and of course i would want her to choose whatever installer she's comfortable with in the end.

[russ]

It's a great deal. A few people I know have paid most of their lease costs in referrals. If you're on Facebook/Twitter etc. it's a great way to market your system to family members, set up the appointment with your salesperson and collect the referral fee. One company gives $1k (pre-tax) for referrals. With the expanding amount of solar installs going on in NY & NJ, you can get some good payments going.

I really hate that method of doing business - the screw your buddy plan.

The referral cost is part of the price.

[J.P.M.]

I really hate that method of doing business - the screw your buddy plan.

The referral cost is part of the price.

From the FWIW dept. : I made my living before engineering as a commission salesperson. I'm not sure I was any good at it, but I knew a lot of people who were that I tried to learn from. A common theme among the more successful ones seemed to be a mild reluctance to buy from or sell to their friends. The reasons often had something to do with valuing a friendship more than a sale.

[Volusiano]

Sell to or buy from friends may be awkward. But I don't see why referring a good contractor you have to a friend is a bad thing.

First of all, if you've already done your homework and weeded out contractors to find the best one for yourself, it would be of value to let your friends or family know so they can check out that contractor if they want to buy the same thing you did. They're not obligated to buy from that contractor. They can do more shopping themselves, and if they come to the same conclusion that your referred contractor is the best one they can find, too, then it's a win-win for everyone. For them because they get a good deal like you did compared to other quotes they found. Otherwise, they might have ended up with a worse deal. Even if they really ended up paying the referral fee that the vendor impose on them to pay you, as long as that is still the best deal they can find, it's still a win for them.

Also keep in mind that if the contractor screws your friend by padding up their bid to pay you the referral fee, the contractor will risk losing out their bid to competitors who are not referrals. If they're dumb enough to take that risk, then it's on them. Besides, even though your situation may be different than your friend, you can still all compare notes to make sure your friend gets the same deal or very close to the same deal as yours. You can still figure out the $/watt cost easily, and if your friend's is higher than yours, then the contractor better has some explaining to do.

Most solar deals range in the $20K to $40K range easily. $500 referral fee is not so much that contractors have to rob Peter to pay Paul. If I were a vendor, I'd be glad to cut into my profit just a little bit to win more business the easier way, through referral. It's just the cost to get your foot in the door. It's nothing different than the cost of marketing. You either pay for marketing to find business or you pay the referral fee to get business. The cost to get business through referral is usually a lot more effective and tangible than the cost of marketing through other channels. Just like you pad up the cost of marketing on your quotes, and also not any different than you padding up other overhead costs on your quotes anyway.

[russ]

Sell to or buy from friends may be awkward. But I don't see why referring a good contractor you have to a friend is a bad thing.

I believe in that - charging for or getting paid for the service is another thing - then I don't trust the one recommending. 99.9% of the people recommending/referring have done little to no research.

[Volusiano]

I believe in that - charging for or getting paid for the service is another thing - then I don't trust the one recommending. 99.9% of the people recommending/referring have done little to no research.

I wouldn't use somebody's recommendation/referral unless they actually put the money where their mouth is and went with that referred installer themselves, meaning that they've done some research and the referred vendor is the one they went with among the many that they researched and got quotes from.

And even then, that referral is still just going to be one of the several quotes I'll be getting to see for myself with my own research. And possibly some of the other quotes are also from other referrals I get from other friends or family members who also put the money where their mouth is and went with their referred vendors.

This is what I actually did. Out of the several quotes I got from various solar installers, one was a referral from my brother (who did research and settled with that one), and another was a referral from a co-worker (who also told me she researched several herself and went with one who was a referral to her by somebody she knows who is very knowledgeable about solar and is actually a solar inspector for her POCO, and who went with that referred vendor himself for an installation on his own house).

Those 2 referred vendors I got turned out to have the most competitive bids by far compared to the ones that I found by myself unreferred. I ended up going with the one referred to by my brother. Even if they had padded up my cost to pay my brother the referral fee (which I doubt because we compared notes closely), it's still the most competitive quote I received, so I don't see how I could lose going with the most competitive bid I could find.

[albert436]

Just goes to show the value of this forum, ie. people posting quotes/specs, sharing information basically.

[russ]

Just goes to show the value of this forum, ie. people posting quotes/specs, sharing information basically.

Everything here is for free - even the hard times one occasionally gets!

[J.P.M.]

Just goes to show the value of this forum, ie. people posting quotes/specs, sharing information basically.

And opinions too.

Some mental spoor, then I'll shut up:

What if you got screwed by a contractor that had a referral program. Would you recommend them to neighbors or others you know that you don't like ? What does that say, if anything, about the value of the referral ?

This referral business seems to have some of the same characteristics as having organized crime do me a favor - I get something, then they own me. Or, at least I may be somewhat reluctant to bad mouth them if I find things are not as rosy with my job as I might have initially thought, if only to save face. Hard to quantify. I know little/nothing about human nature.

I wonder if referrals cut down on complaints, if only as a side benefit.

What if my referral's job goes bad through no one's fault ? How does that make me look ? Will it affect a valuable relationship/friendship ? How will I feel about it ?

I have a neighbor who is one of several with, IMO, a grossly oversized Sunpower lease. He referred another neighbor who now has one. I'm not sure which one is more ignorant about solar energy. My experience is that most people who recommend solar contractors are clueless about it - Most posters here excepted.

If someone did get a good job and is happy with it, why would they wait for 30 pieces of silver before telling relatives, friends and neighbors about it for nothing ? I think I could construct an argument using that question, proposing referrals put a price on the benefits of friendship.

Businesses pay a lot for leads. Qualified leads can be like gold. Referrals are often better than that. That's business and I get it, but I do feel it can put limits on candid exchange of information.

I respect other opinions, here and elsewhere, but I have a problem with the ethics and the practical aspects of referrals.