ON RECPIPROCITY, COMPENSATION AND INDUSTRY RESPECT

By
Home Stager with Perceptions AdverStaging(TM), LLC

This morning I had a most delightful conversation with a veteran Home Stager and consummate business woman.  Unfortunately, the call was cut too short for my taste due to her needing to tend to a property and I, after all, really did need to get back to that proposal that has been my nemesis for the last week. 

 

It happened that this fellow business woman, from an area outside of Massachusetts, had emailed me a few days ago with a referral for a potential local client – a home owner requesting to have their property staged.  I responded, thanking her for considering me and my business and suggested another, more suitable stager for the lead, because they were closer geographically than I am and might better meet the needs of HER contact.

 

I have a few thoughts on this before I go further.  First, that she, this highly recognized Professional Home Stager is receiving leads for the Greater Boston Area; from out of the State of Massachusetts is a testament to her Professional Staging and outstanding marketing skills.  Additionally, knowing as I do how busy she is, that she has taken the time to consider other Professional Home Stagers, their skills, their businesses and the way they present themselves publicly; that she hand selects those she chooses to refer HER business to, candidly, is somewhat flattering.  Finally, quite surprisingly, in that contact email there was not a mention of a referral fee.

 

And so, we chatted.  We bantered back and forth a bit about our respective geographic area’s and the market; what we notice about the staging industry and how we are being impacted by the economy, how we are being perceived and what our experiences are with home owners, where our business is coming from, how our business has shifted, the impact our business has on our families… and then we talked about this business of referrals.

 

I will tell you as I told her, that in my case I have referred out to other local stagers on several occasions and not asked for a referral fee one time.  However, I have always done that believing what goes around comes around.  I had my reasons for those referrals - it was fortuitous (though surely, also due to hard work and other marketing endeavors) that the business came my way at that particular time and it cost me nothing to forward them on when either I was already busy or chose to honor other obligations and so I’ll call it “Karma” for lack of a better word. 

 

However, had I accepted the referral she contacted me about I would have offered to negotiate a referral fee with her, because I recognized immediately that this was not the same, nor could I in any way rationalize it away as the same.  This referral clearly came on the back of a well executed and well spent marketing dollar.  She in turn responded that she was not expecting a referral fee, but that it has been in issue with some, when after sending multiple (out of area) referrals she did ask for a referral fee and as I understand it (and perhaps misunderstand it) was not paid one.  Of course being the consummate business woman she is, she never did mention names or areas and I don’t care to know. 

 

Enough already with platitudes and casual ataboys.  We cannot expect a few individuals to carry the marketing expenses of an entire industry allowing a free for all (including business referrals) without reciprocity and compensation.  Where is there industry respect to be found in this?

 

Jackie 

 

   

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Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Hi Julie!  Did you make it to Framingham?  

I have been busy and not so busy - depending on the moment.  I'm sure you know how it is, when it rains it pours.

Regarding local referral fees - I've never been referred a client outside of this situation, I have been the  refer-er, but have never asked for a fee.  I believe local markets differ though in that there is a greater chance of fair  play (or other fair turn) by organic opportunity ie: painters, plumbers, electricians, general contractors, Realtors(r), insurance agents, banks, etc. ... or "karma".

Jackie 

May 05, 2008 08:57 AM #4
Rainmaker
342,759
Julia Maher
Nestings: Connecticut Home Staging and Model Homes - Fairfield, CT
Connecticut Home Stager
No - I thought I would get this staging job for $1.8 million house, but they decided to drop the price instead (see a previous blog post) - THEN I would have to go to Framingham...oh well...we'll see the place soon!  Julie
May 05, 2008 09:47 AM #5
Rainmaker
155,339
Connie Tebyani
Platinum Home Staging, Inc. : RESA-Pro - Calabasas, CA
Platinum Home Staging, Los Angeles and Ventura County

Here in the Los Angeles area, many Stagers icluding myself, have built a rather strong "network" of tossing eachother business when it's out of our area, or we are simply too busy to take on another property at that time.  I have even added an additional page to my website of "Partners" with direct links to Stagers whom we have partnered with who service areas which we do not.  My company also stratigically only markets to the SoCal area, not nationally.

This topic was actually brought up at a local RESA meeting a couple months ago,  the concencus was, "stratch my back, and I happily scratch yours",  but the referral "fee" was left at the discretion of the individual Stagers, as one comment mentioned, not all referrals pan out. 

May 05, 2008 09:58 AM #6
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Connie - it sounds (reads) like y'all have a terrific and close knit local network; it's one we're working on here.

Sure, not all referrals work out; but of those that do, if they're consistent and out of area, how should the refer-er be compensated, if at all?  Or, would it be better for them to open shop with their own stagers in the neighborhood?  Me?  I'd gladly pay a one time referral fee knowing if I do a great job I'll get additional business from that one referral.

Jackie 

May 05, 2008 11:44 AM #7
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Julie - missed your follow up, up there.  I saw your post and commented that I thought it unusual that a luxury property owner would decide to price drop $70K below asking in lieu of staging. 

Jackie

May 05, 2008 11:48 AM #8
Rainmaker
2,824,240
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
Jackie, I have often referred two other people in the past on homes I was unable to consult on for one reason or another and never asked (or was offered a referral fee) which was fine.  Nor did I ever once receive a referral from them.  I would have to think in two years time they must have at one time or another gotten a contact and were unable to go.  I do refer to someone else who also refers to me when the occasion arises, it would be nice to have a network, however.
May 05, 2008 01:09 PM #9
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Carole - Hello, my friend!  And this too, even these smaller referrals that are not appreciated by acknowledgment and either reciprocated or compensated with a referral fee highlights (for me) the wrongness of it all.  There is goodwill (by the refer-er) and then there is greed (by the perpetual acceptance of the referral).  When and where do we as an industry decide that fair turn is indeed fair turn.  I don't think our eyes have to stray too far, we are too closely aligned with the real estate industry and they do recognize, honor and reward the labors of someone else's work.

Jackie 

May 05, 2008 01:31 PM #10
Rainer
45,206
Sandra Hughes
Redesigned Spaces - Northern Virginia - Fairfax, VA
Redesigned Spaces - Fairfax County, Virginia
I think it depends on the stager.  I belong to a network of stagers and redesigners and we discussed not asking for a referral fee but have spoken with others that expect one.  In that case I pay if I get job out of it and I would then expect a referral from them as that was what they asked of me.  Honestly, I have no idea what is the best way to go about this situation.
May 05, 2008 01:54 PM #11
Rainer
302,425
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL
Jackie BFF, for what its worth, I prefer not to get involved with referral fees, coming or going.  Reason, even though we all spend money marketing, some more than others, when we refer a client its because we either can't do the job, don't have the time, or don't want the job.  Why should I pay someone or visa versa for giving something that was impossible to achieve by the other?  I like the old fashioned "professional courtesy" approach to doing business.  As you said, its karma, what goes around comes around.  Helping our fellow business women is all part of doing business.
May 05, 2008 02:16 PM #12
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Sandra - Thanks for stopping in.  I'm with you in that "I would then expect a referral from them as that as what they asked of me".  I know of very few (um...none) that do anything for "free" in the business world, why are we as "professional" stagers asking our cohorts to do it?!

Terry - BFF!  We talked about this long ago :) Locally, I've gladly given referrals, but this is at someone else's expense and to my benefit...why would I not at least offer if knowing as I did, I could in all probability never reciprocate?

Ultimately, each stager is their own island; and each island will have to provide for themselves...or collaborate.

 

Jackie 

May 05, 2008 02:49 PM #13
Rainmaker
290,574
Kathleen Lordbock
Keller Williams Realty Professionals - Baxter, MN
Keller Williams Realty Professionals
I always ask what they would like as a referral fee should I get paid work out of said job.  ?They have a always been reasonable and I don't mind paying esp if they are from out of my area and unlikely to get the same from me.
May 05, 2008 04:27 PM #14
Rainmaker
212,534
Terrylynn Fisher
Dudum Real Estate Group - BuyStageSell.com - Walnut Creek, CA
HAFA Certified, EcoBroker, CRS, CSP Realtor, Etc.

Jackie, it is true that the staging industry is part of the real estate industry however, not quite thinking like the real estate industry in some areas.  Realtors commonly give and receive referrals and pay each other a referral fee for that privilege.  The point is really not that we don't like each other enough to do it for free, but that our time is worth something and acknowledging that is a good will sort of thing.  AND, the time the referring person has spent on the client relationship and then entrusts them to another is quite a compliment.  In reality, it is additional business we would not have had except for the respect and referral of the referring person.  We are getting business because of their direct endorsement.  A personal recommendation makes that client much more than a cold call.  I have no hesitation paying a referral fee. 

And have confidence when giving a referral that I have hand picked just the right person for my client.  There is alot of peace of mind in that.  Stagers just need to think like a business about the business of staging. 

May 05, 2008 06:38 PM #15
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Kathleen - Smart business woman, you.   Thanks for weighing in.

Terrylynn - Well said!  Thank you!!

Jackie 

May 06, 2008 02:05 PM #16
Rainmaker
212,534
Terrylynn Fisher
Dudum Real Estate Group - BuyStageSell.com - Walnut Creek, CA
HAFA Certified, EcoBroker, CRS, CSP Realtor, Etc.
Jackie, you are most welcome.  Just my opinion of course, but thinking about it, it makes sense that this wold be how it evolves for the professional staging industry in a business world sense of things.  Have a good week.
May 06, 2008 03:49 PM #17
Rainmaker
325,362
Michelle Minch
Moving Mountains Design Home Staging, Pasadena, CA - Los Angeles, CA
Home Staging Los Angeles and Pasadena, CA

Jackie: I get a lot of calls for work that is too far for us to travel to or we are too busy to take on. I always refer those jobs to other stagers I have gotten to know (and trust) from meeting at roundtables, stagers mixers, or on Active Rain, etc. I do not ask for a referral fee. Most of these people refer jobs to me in turn, if something comes up that is out of their area or they are too busy to take on. Not all the referrals pan out, but sometimes they do. All I ask is to be updated if they got the job and how it went. Connie Tebyani and I pass a lot of jobs and info back and forth - since our areas overlap a little and we were both in the LA Times Article we tend to be called by the same people. There is plenty of work for everyone.

I recently referred a job to another stager. I don't know if she got the job or not, but she sent me a huge floral arrangement. It was completely unnecessary, but greatly appreciated. It was very thoughtful of her, and makes it more likely that her name will pop into my head first the next time I get a referral in her area.

I refer a lot of other suppliers for work, like landscapers, painters, carpet sales, etc. Some of them give me a referral fee, some don't. I don't ask for one, but always appreciate it when it happens. Mostly I just like to be able to refer competent, trustworthy people who do a good job for my clients. My clients are happy, and happy clients are more likely to refer me to their friends and associates.

 

May 13, 2008 07:03 AM #18
Rainmaker
209,996
James Wexler
wexzilla.com - Scottsdale, AZ

Jackie

I believe that whether or not you ask for a referral fee, the gesture practiced over a period of time with garner one the reciprocity that a good industry professional deserves.

by the way, Do you have an outside blog that I can add to my Blogroll ?

Thanks and look forward to reading your thoughts on the world of real estate.

Jun 21, 2008 07:52 AM #19
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Michelle - Thanks for your insight and sharing some of your experiences.  You are absolutely right, a happy client will usually refer their friends and family members.  Highest priority should always be placed on identifying the person/company that can best meet the need(s) of those that call us initially. 

In the case I was speaking of the stager is Kate Hart.  Kate has spent a tremendous amount of time and money marketing to major U.S. corporations on behalf of all professional stagers creating a greater urgency and understanding as to the important role stagers can play in assisting them in the sale of some of their properties.  In many of those cases a homeowner may be referred directly to Kate  - time and money spent nonetheless on the same endeavor.  I am still of the same mindset that a referral fee is due.  What are your thoughts in a case such as this?

James - You may have summed it up most nicely in saying that whether asked for or not a referral fee "will garner one the reciprocity that a good industry professional deserves."  The key term here being professional.

Thank you for popping in and adding your perspective.  I do not have an outside blog, but I shamelessly encourage you to subscribe to this one! <grin>

Jackie

 

 

Jun 23, 2008 03:54 PM #20
Rainmaker
325,362
Michelle Minch
Moving Mountains Design Home Staging, Pasadena, CA - Los Angeles, CA
Home Staging Los Angeles and Pasadena, CA

Jackie: I think referral fees are between the referrer and referree. I would decline a referral if I had to pay for the referral whether I got the job or not. I would have no problem paying a referral fee if it turned into a paying job. Whenever someone refers a job to me, I always ask if they are expecting a referral fee. Most say no. I just want all the cards to be on the table so there are no surprises or hurt feelings.

When I refer out a job, I always say up front that I do not expect a referral fee, but I do want to know if they got the job and how it went. I hope that these people will refer jobs to me in the future (and some have already). To be honest, once I pass a job on, I let go of it and don't give it much thought. I assume the people I have chosen to pass the job on to will do their best to do a good job.

I get a lot of inquiries about my services. A lot of people are just curious, some are thinking about staging but don't know how much it costs, some want to stage, but are unrealistic about the process or the costs. Unless I was somehow assured that the referrals were vetted and qualified to my standards and my business model, I wouldn't want to pay for those referrals.

Jun 23, 2008 04:29 PM #21
Rainer
46,282
Jackie Peraza
Perceptions AdverStaging(TM), LLC - Framingham, MA
Home Stager - Framingham, Massachusetts

Michelle - I have to date always conducted my business exactly as you.  I apologize for what I think is a miscommunication on my part in this post and in my comments - I am not suggesting, nor would I agree to pay a referral fee for work I've not actually been paid to do.

As a basis for my own history and an example for my experience in paying referral fees; in my previous life I was an executive recruiter.  It was common practice and in fact industry standard to pay referral fees within the industry.  However, I only paid them (or expected to be paid) after I had been paid by the client.  Even though it was a common practice and with 16 years of experience, I still did as you do and always made sure all cards were on the table and communicated expectations in writing, signed by both parties - because it was business.  I unfortunately learned the hard way one time and it cost me over $20,000.00 (in referral fees) - expensive lesson, but well learned.

I've not gone that far as a stager because I've not asked for or received referral fees.  If and when I do, everything will be communicated in writing and signed or it won't happen.

Jackie

 

Jun 23, 2008 06:34 PM #22
Rainmaker
325,362
Michelle Minch
Moving Mountains Design Home Staging, Pasadena, CA - Los Angeles, CA
Home Staging Los Angeles and Pasadena, CA

Jackie: I thought about this a lot last night, and I want to add that I have a tremendous amount of respect for Kate Hart and her marketing abilities (and her staging abilities as well). I have no doubt that people contact her from all over the country as she has quite the following. I did not wish to imply that her referrals were not of value or not "qualified". I was speaking in more general terms, about all stagers and not one stager in particular.

Funny this should come up now. I was contacted by a company called Service Magic who wants to send me referrals at $22 or $33/pop depending upon how the contact was generated. I said no, because I can't imagine their referrals had been vetted as well as I would like, and that could get very expensive.

Thank you for posting this. It is a very interesting and informative discussion. You should post it in the Real World Staging for Newbies group.

Jun 24, 2008 02:01 AM #23
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Jackie Peraza

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