Need input for computer services referral program

[Wyck]

I run a small business doing computer consulting for various companies and individuals. I'm looking to start a referral program to give them some incentive to spread the word. At the moment I charge $55/hr for services... What kind of discounts are standard or expected in the industry for referrals? A free hour? 50% off the next consultation, regardless of duration? Suggestions please - I don't want to just wing it. Thanks

 

[zippy]

12% off the next consultation. Or pick some other random number. It'll stick in their head.

But 50% off or a free hour is way too much.

 

[rudeguy]

two ways of looking at it...you could just suggest that they refer you business on the sole basis of the quality of work you do...or you can try to buy them with discounts on services

 

[Wyck]

Alright, I see how 50% w/ an unlimited duration could be way too much. But right now I'm really hurting for business, and it seems like even if I do take a loss from the referral getting may name out there will work to my advantage in the future. So I really want them to have some significant incentive. Do you think 25% off the next consultation would be enticing to them? I'd still be making some profit from the, plus gaining a new customer.

 

[Wyck]

Originally posted by: rudeguy5757
two ways of looking at it...you could just suggest that they refer you business on the sole basis of the quality of work you do...or you can try to buy them with discounts on services

Yeah, I've been trying the first way. It's worked alright for residential customers but I haven't gotten a single B2B referral yet, because I think they care more about $$ than personal relations.

 

[zippy]

Originally posted by: Wyck
Alright, I see how 50% w/ an unlimited duration could be way too much. But right now I'm really hurting for business, and it seems like even if I do take a loss from the referral getting may name out there will work to my advantage in the future. So I really want them to have some significant incentive. Do you think 25% off the next consultation would be enticing to them? I'd still be making some profit from the, plus gaining a new customer.

Ah okay. When you said small business for some reason I thought of a 'side business' or something that you do to make extra cash.

I would think that 25% off their next consultation would be enticing.

Have you run any ads? Also, some restaurants have a peg board near the entrance for people to put business cards up - you might get some business by putting a few cards up each time you see one of those.

How long have you been at this business? As I'm sure you know, it takes time to build a good base of clients, but once you do business starts popping up every which way (assuming you do good work ).

 

[Spac3d]

Originally posted by: Wyck
I run a small business doing computer consulting for various companies and individuals. I'm looking to start a referral program to give them some incentive to spread the word. At the moment I charge $55/hr for services... What kind of discounts are standard or expected in the industry for referrals? A free hour? 50% off the next consultation, regardless of duration? Suggestions please - I don't want to just wing it. Thanks

GOOD LORD:Q That is a lot of money for indviduals... they would rather call Johnny from down the street and give him twenty bucks to fix their computer.

 

[vi edit]

If you're hurting for business, why not lower your prices? $55 seems like a bit much to me.

 

[Wyck]

It's only $45/hr for individuals actually - $55 is the business price. I'm stuck in kind of a viscious circle where I can't get by charging less because I don't have enough customers, but I don't want to charge too much because it'll scare people away. It used to be $45 for everybody, but I had to raise the business prices because I found myself doing a lot more research on my own to figure out how to do exactly what the business customers needed (VPN, etc).

As for advertising, I've got an add designed and ready to place in the local newspaper, but it's going to cost me over $600... and with no guarantee of a response it's kind of intimidating.

 

[zippy]

I started a computer business over the summer with a friend - nothing serious, just to line our pockets for the summer and to put some away. For him, he pays for his car insurance and the amount that he personally has to put towards college next year. For me, well, I don't have a car, so most of mine (I spent some by going out a lot earlier this year and buying an iPod - that's pretty much the extent of it though) went into my bank account and is going towards college.

We started out charging $35/hr and put fliers up all around our neighborhoods. We got a few calls off of that. Then we got a call from the newspaper and they did a full page article on us as their "Business of the Week" and business took off. Of course, in the article we were asked how much we charged and we had decided, before the interview, to raise it a bit to $45/hr. Almost all of our clients were individuals (only maybe two businesses) and they all paid the $45/hr. And we're just students too - not college graduates that majored in CS. Of course, we live in a, on the whole, rather affluent suburban area.

So, to me, $55/hr doesn't seem exorbitant. Certainly though, you could drop it down and you might get more business.

(Note: I also have experience working for my sister's fiancee who does the same kind of business - he has built up a very strong clientelle over the last 3 years and now charges $75/hr (and has employees now). It's slow in the beginning, but once you start getting name recognition it's all uphill.)

How big of an add is it for $600?

I don't know if you have this in your area, but maybe try an ad in the Pennysaver? It's a smaller, weekly (biweekly?) newspaper that is, I think, just classifieds and ads - they also charge considerably less to get in there.

I was talking to my friend about what we're going to do about business this summer (well, what's he's going to do - I'm moving) and he said that a little ad in there is real cheap. I know that people actually look in there too, so that might be a wise move too.

 

[yoda291]

Originally posted by: vi_edit
If you're hurting for business, why not lower your prices? $55 seems like a bit much to me.

I wouldn't lower it. If you lower it too much, you become johnny down the street fixing computers. Companies like to pay for liability. It's one of the few things they go all out on. If you underbid, you're just sending the msg that "I really don't know what I'm doing, but I'd like some money please". It makes absolutely NO sense, but that's what it is.

I think that it'd be a good idea to waive in-house visitation fees or cut out 20% from next in-house visitation with the SIGNING OF A SERVICE contract for x time period. Reasoning is, those service contracts are your bread and butter. They bring in the largest return for time.

 

[Spac3d]

Originally posted by: zippy
I started a computer business over the summer with a friend - nothing serious, just to line our pockets for the summer and to put some away. For him, he pays for his car insurance and the amount that he personally has to put towards college next year. For me, well, I don't have a car, so most of mine (I spent some by going out a lot earlier this year and buying an iPod - that's pretty much the extent of it though) went into my bank account and is going towards college.

We started out charging $35/hr and put fliers up all around our neighborhoods. We got a few calls off of that. Then we got a call from the newspaper and they did a full page article on us as their "Business of the Week" and business took off. Of course, in the article we were asked how much we charged and we had decided, before the interview, to raise it a bit to $45/hr. Almost all of our clients were individuals (only maybe two businesses) and they all paid the $45/hr. And we're just students too - not college graduates that majored in CS. Of course, we live in a, on the whole, rather affluent suburban area.

So, to me, $55/hr doesn't seem exorbitant. Certainly though, you could drop it down and you might get more business.

(Note: I also have experience working for my sister's fiancee who does the same kind of business - he has built up a very strong clientelle over the last 3 years and now charges $75/hr (and has employees now). It's slow in the beginning, but once you start getting name recognition it's all uphill.)

Zippy makes a good point. A newspaper article is incredible exposure... do you have something unique that would make an article write about you or your business?

 

[zippy]

Originally posted by: yoda291

Originally posted by: vi_edit
If you're hurting for business, why not lower your prices? $55 seems like a bit much to me.

I wouldn't lower it. If you lower it too much, you become johnny down the street fixing computers. Companies like to pay for liability. It's one of the few things they go all out on. If you underbid, you're just sending the msg that "I really don't know what I'm doing, but I'd like some money please". It makes absolutely NO sense, but that's what it is.

Very good point. You don't want to be below the norm for computer service in your area. If you are then it gets people wondering why this is the case and they won't take a risk on you.

Originally posted by: Spac3d
Zippy makes a good point. A newspaper article is incredible exposure... do you have something unique that would make an article write about you or your business?

I was extremely excited when I got that call from the reporter. I was up till 4AM the night before the article ran finishing my web site. I got my first call at 8:20 that morning and was out of the house from 9:30 till 5:30 for the next two days. Business kept up for a long time too. We had to slow down once school started up though and I haven't taken a client in a long time because I have been too busy with extracurricular stuff, but my partner still gets work (enough to pay his insurance each month and put some away) and we still get calls now and again because people kept the article. However, for the most part now they are repeat clients and from word-of-mouth.

 

[Wyck]

Boy, a newspaper article would be great... but I live in a City and there's no way that'd ever happen. Congradulations though... That'd be an awesome memento even if it didn't generate any business at all.

I decided to go w/ a 30% discount for the next consultation, with a max of 3 hours. Thanks for your input everybody!