Steve Payne
I referred a sub to one of my clients (who) got other quotes and found out my guy was the most expensive by far. Now I look like the bad guy.
Canadian Contractor risk"Now I tell my clients that are looking for a subcontractor referral that my guys are really busy and I don't think they would be available."
Steve Heidebrecht posted this in reply to an article we published on Oct. 30 about your crew potentially damaging your reputation.
“You have to be careful with referrals. A while ago I referred a subcontractor to one of my clients. The customer got a couple of other quotes and found out my guy was the most expensive by far. I don’t know if my guy was right and the others quoted too low, but the fact remains is that now I look like the bad guy for my sub contractors.
I took all the risk just to refer someone. I can only imagine if the guy had done the job incorrectly – or took the deposit and ran. How much worse would I have looked?
Unless I trust the guy 100 per cent I now tell my clients that are looking for a subcontractor referral that my guys are really busy and I don’t think they would be available. Or I tell them this guy will be more money but he does really good work. Just to cover me in case his quote is higher.
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>I can only imagine if the guy had done the job incorrectly – or took the deposit and ran. <
Of course you, as a good General Contractor, would never anyone like that work with you anyway, right?
I think the idea of warning anyone that asks, can you refer an Electrical Contractor, a Plumbing Contractor etc, that you only use the best, so they could be expensive is the way to go. Of course you only use the best, so it costs more. This also makes your last job you did for them look good too:)
Yes, referrals is a tricky part of business. If can blow back if the customer is not forewarned. Yes, we have been referred to customer and have being the highest bidder by far many times. We are good, we do things right but many times the Owner does not care about that. Most of the times the Owner is just looking for a cheap price. Also, if the referral gives you a high price, why not asking him why and what is included. One simple example: we bid a project with a complete roof removal and all brand new flashings, drains, metal coping flashings etc. The other 4 quotes did not. The owner chose the lowest bidder. Good business for us. Two year later we are doing that roof. Price and quality.
If we are ever to be the true professionals that we say we are then guiding clients to others like yourself is all part of the responsibility of doing what we do. I mean people seek out advice from Doctors, Lawyers, etc and we get a lot of business through our Professional contacts and many times we refer these clients to our sub contractors that we have established trust and confidence in. We do and always have told them that if they are seeking a cheap price and low quality job not to call our sub contractor because like us they will stand behind their work and do what is needed to do the job right. If you cannot have that confidence and trust in your sub contractor then do not refer anyone. Doing this could be worse for your image if they get a fly by night guy, or a guy who moonlights. Why? Because they may blame you for not assisting them. In many cases we also may not be able to assist them because they seek something or someone that we have not had the experience with and in that case be honest and tell them that. We have clients calling all the time looking for help and we do our very best to help.
I feel you have missed an opportunity. Not only to set the record straight, but also to strengthen your clients trust in you. You should have engaged instead of jumping to conclusions. As an Electrical contractor mainly involved with existing home owners, I am am often amazed at how different prices can be and how different scopes of work can be interpreted. Our code sucks! But it takes time and money to determine what the client really wants versus what you think is the right way to do it. But the bottom line is that your client trusts you and you should have looked into it if for no other reason than to keep their trust.
New topic : Is referring with a finder fee or commision morally ok?
What about it, folks, is referring with a finder’s fee or a commission morally OK? Thanks for your post, Rob.
Moral or not, we do not do this. If we would enter into this type of money for referral deal, personally I would feel that we have to inject ourselves into the business transaction and would feel obligated. A few times, maybe more than a few times we have taken on the role of a General because the client has that extreme trust and is demanding we take over the management of the Sub we recommend. They are also willing to pay us for that. Money for referral is not in our business model or personal feeling of how business should be conducted. We do often thank those who refer us by way of a card, bouquet of flowers, wine, or dinner out. We do this for clients or anyone but nothing formal. Again it builds trust all round and shows we care and are appreciative, but to expect a fixed fee, no.
I feel that a referral fee is morally wrong, especially when it is expected by the person who is referring you. Like most of us contractors, who’ve been in business for a long time, 90% of our work, or potential work, comes from referrals. Most of the time a simple “thanks for the referral” is all that is required and occasionally a gift card for dinner or a bottle of wine might be an additional way of thanking someone for sending a customer to you.