Idea for Networking Referral Group
There is a natural imbalance between lead sourcing and lead receipts.
Money may be spent without necessarily receiving enough offsetting benefits.
The group will be comprised of individuals:
- business owners who are looking for new customers.
- other people who may find leads for customers for those businesses.
A single individual may be (but is not required to be) in both categories. There must be no ethical conflicts of interest for the participants. There will be no “dues.” Meeting expenses (as needed) will be “Dutch treat.”
Lead providers must agree to being paid for results, not for just activity.
Lead providers shall make no “private deals” with lead recipients.
Lead providers must notify the group administrator of referrals
Lead recipients must agree to pay for the good results of lead providers.
The method of compensation must be predetermined and objective.
Lead recipients shall make no “private deals” with lead providers.
Lead recipients shall report progress of business development from referrals to the group administrator and lead provider.
Lead recipients shall make timely payments of money owed to lead providers.
The group administrator will track referrals and be a clearinghouse for money exchanges between lead recipients and lead providers.
There will be no “multi-layer” structure.
The group administrator will be paid 10% of the gross amount paid by lead recipients to lead providers. All group participants must be agree to be independent contractors.
PROCESS FOR DETERMINING COMPENSATION OF LEAD PROVIDERS
Lead recipients must agree that sales/marketing is not a “free” activity.
Lead recipients must declare, in advance, objective conditions which, when satisfied, will obligate lead recipient to pay lead provider. (In general, by examining the income statement of lead recipient, a sensible fraction of sales revenue can be determined to be reasonable compensation for lead generating activities.) Lead referrals, generally, fall into the category of results from prospecting activities. Prospecting, lead development, and “closing the sale” activities may be separable and compensable separately at different rates. Any or all of these activities may be provided by a lead provider. Compensation will generally be based on collected revenues.
Specifics of the computation must be provided by the lead recipient in advance. A lead provider may choose whether or not to accept those terms. By giving a lead, lead provider accepts the offer of compensation by lead recipient.
In general, disputes will be resolved in favor of the lead provider. Arbitration decisions by the group administrator will be final.
New work for existing customers is generally not compensable.
A group member may withdraw at any time for any reason. Obligations of lead recipients to pay lead providers must be satisfied for one year following withdrawal.
Breach of the agreement by either lead provider or lead recipient will result in termination of membership in the group. Other members of the group will agree not to do business (lead referral/acceptance) with a terminated member for at least two years following notice of termination.
The hiring of a lead provider by a lead recipient will result in employer paying a “finders fee” of $5,000 to the group administrator.
A “board of directors” may be formed of group members to oversee the performance of the group administrator. The group administrator may be replaced by a ¾ vote of the board of directors.
© Adrian W. (Ted) Hollander