Referral fee for recommending registrar to customer

I am a consultant for less than a year in ISO auditing and I need help on this. I have a few gap audits coming up. During the audit, I could recommend a few of the local registrars for their ISO registration. I will of course suggest that the company should intervew a handful of them and pick the best. Can I ask for referral fee from these registrars that I recommend and have an agreement for referral commission before the gap audit? If the answer is "yes". How much should I ask for.
In the real estate business, the referral fee is 20% to 25% of the commission.

Tony

phxsun2001 said:

I am a consultant for less than a year in ISO auditing and I need help on this. I have a few gap audits coming up. During the audit, I could recommend a few of the local registrars for their ISO registration. I will of course suggest that the company should intervew a handful of them and pick the best. Can I ask for referral fee from these registrars that I recommend and have an agreement for referral commission before the gap audit? If the answer is "yes". How much should I ask for.
In the real estate business, the referral fee is 20% to 25% of the commission.

Tony

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That might appear like a conflict of interest. You might lose your objectivity.

You can ask, but you probably won't get a dime.

Commission

Al,
Thanks for the input. The way I look at this, if I just give them a list of ISO registrars and let them pick their own. There is no guarantee that the best one selected by the company would best meet their needs. At least the Auditors I recommend meet my requirements. I have witnessed their auditing skills and I have dealt with them for more than 4 years.

I like to know if it is a common practice to collect referral fees (like real estate brokers), when a consultant or a registrar refer business to another registrar.

My wife is a real estate broker. There are times that she doesn't want to take a listing for whatever reason. She refers the listing to another broker and she collects 20% of the commission paid when the property is sold. She doesn't even have to disclose it to the seller.

-Tony

I would see this as a bit of a conflict. You are basically expecting your customer to pay you extra, through a registrar, for work that they would already be expecting. Could be considered a hidden fee. In real estate, it is 100% commission driven. The parties expect to pay XX% - it does not matter how the sales people split it up.

Back when I consulted it was part of the customers expectations (and the contract) that I assist with registrar selection. I had several I had worked with and recommended. The client made the final call. It was a much biger benefit to me to provide this good customer service which resulted in more referral business from my clients. Also getting to know the registrars and auditors got me more business, since they would recognize companies that needed help, and point them to me for assistance. Referrals back and forth were worth much more than a few bucks here and there.

Consider this situation. Registrar A has an excellent reputation, very fair, provides value added auditing, no comission for the referral. Registrar B is so-so, complies with requirements, but is bad at scheduling, does the minimum, unexperienced auditors, etc. - and provides a $500 commission. Both are charging your client the same amount. Which are you going to recommend? Is it what is best for your client? Are you going to disclose the $500 to your client if you point them that way?

Ethics,schmethics - do what's right!

This is definitely an ethics question.

Most of the major registrars I am familiar with are reasonable guys who often throw business by referral to consultants who they might see as a good fit for a particular client - they do not expect a referral fee.

Similarly, consultants are expected to be the client's advocate, not their own. As soon as they seek a referral fee, they cease being the client's advocate.

Internal auditors (on a contract basis) have as high a duty to serve the client's best interest as any other consultant. It seems to me nearly impossible to serve one's own pocketbook and the client simultaneously.

I agree with Wes. The registrar will be willing to provide your name to potential clients if you do the same for them.

In my relationships with several registrars, I have referred many clients and they have reciprocated.

It comes down to whether you are interested in nickel and diming the registrar or working with them which can help you land other jobs.

Most of the large registrars will not be interested in paying a referral fee,

Danny

I agree with DannyK, Wes and Tom. I've been in consulting for 7 years. I have some registrars I recommend to quote, but ultimately it's the clients responsibility. One client picked a registrar that I do not recommend. The client knows it, but they are willing to deal with it.

If one registrar agree's to the referral fee and the others don't, will you be more inclined to refer them?

Thin ice, my pal, but as Wes put it, a matter of ethics. My clients look to me for good advice. I've participated in sales call interviews with registrars, with them, and I always look for best fit, keeping only the client, not my interests in mind.

phxsun2001 said:

I am a consultant for less than a year in ISO auditing and I need help on this. I have a few gap audits coming up. During the audit, I could recommend a few of the local registrars for their ISO registration. I will of course suggest that the company should intervew a handful of them and pick the best. Can I ask for referral fee from these registrars that I recommend and have an agreement for referral commission before the gap audit? If the answer is "yes". How much should I ask for.
In the real estate business, the referral fee is 20% to 25% of the commission.

Tony

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This isn't the real estate business, and finder's fees should not be a key part of where you expect to make your living. I have never received any finder's fees in my 9 years. A few registrars may pay them, but the numbers I hear are more like $300-500. Nothing in the 25% range. This business doesn't work on that basis.

Take the advice others here have already given. Consider any fees you receive to be a token of appreciation. Take your spouse to dinner. But, protect your integrity and avoid any appearance of double dealing. It will leave a very bad taste in your client's mouths...

hjilling said:

Take the advice others here have already given. Consider any fees you receive to be a token of appreciation. Take your spouse to dinner. But, protect your integrity and avoid any appearance of double dealing. It will leave a very bad taste in your client's mouths...

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Remember that the only thing that you have to offer is your name and you can never recover it.