If a business associate refers a profitable piece of business to you, should you reward him? If you answered yes, then how should you do so?
I believe that you do not always have to return a favour with gifts. Generally, it depends on the motivation of the person who referred the business to you.
If, for example, you are old friends or business colleagues, you may like to help each other out and refer business to each other with no expectation of a reward, other than the deepening of the relationship.
On the other hand, some business owners have specific referral partners that they actively seek business for and have agreed on a system of reward between themselves when business is passed backward and forward.
Many business owners have some methodology for rewarding people who refer them business. Some pay a sales commission or offer a gift of some sort. There are some who do nothing more than say “thank you”.
What you do will depend on who gives you the referral and what kind of relationship you have with him.
If you are close business allies, you may simply believe in the Law of Reciprocity — what goes around comes around. If you refer any business to me, then I will do the same for you in return.
However, not all businesses work this way and sometimes it is easier for one person to send another a lot of business while it is harder for the receiver to return the favour. If this is the case, it may be prudent to have an arrangement where the receiver of the business rewards the sender for his generosity.
The Platinum Rule
If this is the case, then I would recommend that you apply the Platinum Rule. Some people know about the Golden Rule while even fewer people know about the Platinum Rule and how to use it in business.
The Golden Rule goes like this: Do unto others as you would like done to you.
The Platinum Rule, created by American entrepreneur, business author and keynote speaker Dr Tony Alessandra, states “do unto others as they would like done unto them”.
The difference is you are focusing on what the other person likes or wants rather than what you like or want.
For example, let’s say a business colleague refers business worth $10,000 to you. You want to say “thank you” and you want to encourage him to do this same generous kind of referral over and over again. How do you reward and encourage him?
One client I worked with had just this kind of experience. He was a real estate sales professional and was known in the marketplace as the guy who wore “outrageous” ties — imagine bright, quirky, never conservative and always loud. He wore a dark suit and always wore a very bright tie with the colour yellow as the main feature.
When he received a nice piece of business from a colleague, he wanted to thank his colleague for the referral. He also wanted to encourage him to continue to refer clients to him. He went straight out and bought his colleague an expensive yellow silk tie from his favourite tie retailer. He even had it gift-wrapped and proudly presented it to him.
A few weeks later, he noticed that his colleague had not worn the tie. The problem was his colleague did not like yellow ties. Rather, he was a very conservative dresser, always impeccably groomed, but never with a bright tie or any outlandish clothing. He was simply uncomfortable with the gift and would never use it.
If my client had done some research and perhaps even observed to see the kind of ties his colleague wore, he would have known that such a gift would not work. He applied the Golden Rule and bought a gift based on what he liked when he should have applied the Platinum Rule and bought something in line with his colleague’s taste.
What will you do next time? Hopefully, you will apply the Platinum Rule and do a little research to find out what your business associate likes before you rush off to buy something you like instead.
Of course, you were right to think that it is the thought that counts. However, a thoughtful gift carries far more weight and memories than the other option.