Question: Should I Offer a Commission in Exchange for Referrals?
We are looking to partner with a handful of event planners and venues in our area to be their preferred photo booth vendor. Is it customary to offer them a % commission on their referrals that end up renting a booth from us? If so, what is the standard commission rate range?
We were thinking 5%, but weren’t sure if that’s too low or too high?
Thank you so much!
Sincerely,
Luke and Monika
Answer:
Hi, Monika!
I don’t have first hand experience with offering a referral commission on photo booths, but here are my thoughts based on my experience with paying commissions:
- Absolutely, YES. Offer a commission. You’ll get many more wedding referrals this way, whether it’s customary or not.
- Investigate what your competition is doing, and make a more compelling offer so that you stand out.
Figure out what you need to make to cover your expenses, but make sure your commission is very generous. One good relationship with a venue can lead to hundreds or thousands of referrals, so it’s worth making a little less NOW so that you can make more in the long haul.
Is 5% compelling enough to get a venue excited about referring you? Probably not. The response will be mediocre at best.
Not sure what the going rate is for photo booths, but let’s say it’s $1,500. 5% is $75. Not terrible, but not overly compelling, either.
Imagine yourself as that venue. What would make you excited to promote these photo booths, if you had ZERO interest in helping out the lovely Monika?
- Pick out 3 local venues and build a powerful, strategic relationship with them. This will translate to more referrals that you know what to do with!
Not just ANY venues, but venues who do a large volume of weddings (I’d say >50 per year) for mid to high budget weddings, couples who are most likely to spend money on a photo booth.
Reach out to them and hook them up. Do nice things for them before they send you even one referral. For example, offer to provide a free photo booth for one of their private tastings or a special event they are hosting.
When they see how much people love a photo booth…and how good it makes them look for having one…they’ll be much more inclined to refer you. If the venue does a Valentine’s Day dance or a corporate gathering, that could be a good one to donate your services to.
Your best bet is to think like a venue and figure out the “what’s in it for them” that’s compelling enough to get them excited about referring you. Build a few key relationships, and your business should be off and running.
A mistake many wedding vendors make is to think of the commission as money “lost” or “wasted.” Paying a referral commission is an excellent way to get more leads without spending any money. It’s like guaranteed advertising; you only pay if it works.
What do you think about referral commissions for the wedding business?
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In any business a huge crunch of the sales will come from referrals, but in a wedding business this is even more crucial. When you get a client/customer through a referral they are already motivated to buy from you which makes your sale much easier. 
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