Is it Ethical to Pay for Referrals?

Posted on Posted in Business Ethics Tagged with , , ,

Very interesting discussion at LinkedIn on when it is or isn’t OK to pay referral fees. I don’t believe you have to be a member to see the discussion though you do if you want to make a comment (might have to join the group first, I don’t know).

Here’s my take.

When colleagues refer new business to me, I offer them a choice: commissions or “karma points” (good vibes and my thanks). As a copywriter, I get referrals from designers, complementary service providers, etc. I am comfortable with whichever they choose and see no ethical problem in my industry with paying a referral fee, any more than I do in paying a commission when someone sells a physical product.

However, there are industries where cash payments could easily be problematic if not disclosed, not just because of regulations but also because of ethics. The financial services field strikes me as a place to be particularly upfront, as with any companies providing services to elders, disabled people, or others in a position of vulnerability. And the issue of someone within a company referring to another part of the company is another place to be very upfront.

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About

A lifelong activist, profitability and marketing specialist Shel Horowitz’s mission is to fix crises like hunger, poverty, racism, war, and catastrophic climate change—by showing the business world how fixing them can make a profit. An author, international speaker, and TEDx Talker, his award-winning 10th book, Guerrilla Marketing to Heal the World, lays out a blueprint for creating and MARKETING those profitable change-making products and services. He is happy to help you craft your messaging and develop profit strategies. Learn more (and download excerpts from the book) at http://goingbeyondsustainability.com