Contractors as Referral Partners
Let’s talk about contractors as referral partners today.
This question came up in our Q&A this week, and I think it is valuable information for everyone to hear.
The Question:
A new contractor called me to set up a meeting over coffee. What dos and don’ts should I keep in mind for our initial meeting? He and his partner parted ways with a large contractor that has designers on staff. They want to partner with designers for specific projects.
My Answer:
What a great opportunity! Let’s dive into how you handle a situation like this.
First, say yes to coffee and get the details of this B2B connection he’s trying to establish with you.
It’s a good idea to identify a mutual connection and approach the meeting from a place of giving. What can you give, and how can you help?
Establishing and maintaining referral partners is so important when it comes to marketing. In fact, if you can get 5 or 6 excellent referral partners, you’ll stay busy for life!
Now, let’s get into the nitty gritty of this potential partnership.
First, you’ll want to find out if he wants to hire you as part of his company so that he can offer design services in his initial contract with his clients and then have you in the background doing the design portion for him. If it is truly him hiring you, not the client, it will be up to you to come up with a package you can offer him that will include time for you to make basic selections with the client.
Once you start working with the client, you’ll get selections for the flooring, cabinets, countertops, etc., as part of the initial design fee he included in their contract. Then, you will offer the client continued work they can hire you for directly. That can consist of finishing the basic selections and window coverings and starting with some furniture and design strategies for the space.
This is an excellent opportunity because it often leads to more work.
Another possible direction for this partnership is that he wants to refer people to you from the beginning, which means you take on the whole design, construction drawings, permitting, and selections. In that case, the contractor generally refers the clients to you, and they hire you directly.
An exploratory agreement is a good idea in this scenario because you can develop a scope and budget for this tremendous job you’re going to do. You’ll also want to clearly explain how this arrangement benefits him and discuss providing product in the job, which will help boost your income.
Remember that you don’t have to accept his offer on the spot, and you don’t have to make an offer to him on the spot either. It’s perfectly reasonable to step away and get the offer right because it’s something you’ll have to live with for a while.
You can always let him know that you’re interested and give a specific date that you’ll get back to him with an answer or offer.
Another thing to consider is that in B2B relationships like this, you’ll likely make less per hour than your regular internal rate. This is because he’s bringing the client to you instead of making that connection yourself. A 20% reduction in your hourly rate is a good place to start.
You’ll also want to verify that the clients he works with and would be sending you are also your ideal clients. If his clients are not at the level you want them to be; it may ultimately not be the right fit. If that happens, give him someone else to talk with that may be better suited for his client base.
The most important thing to keep in mind here is that good referral partners come from relationships. Start the conversation over coffee, build the relationship, and then work out the details that benefit both parties.
Watch the video above, where I give much more information about how to navigate referral relationships with contractors.
And, remember, we teach you exactly how to work through things like this in our Growth and Structure programs.
If you are interested in learning more about strategies for your business, book a clarity call with one of our coaches.
Until next time, design something beautiful and get paid what you’re worth.
