… that is the question. Or is the solution to this quandary more simple than I make it out to be?

Maybe. Nevertheless, I’m the type who likes to examine the reasons behind a decision. So, should you pay a referral fee? Let’s examine the pros and cons through scenarios.

Staples

After high school, while my friends went off to college, I unfavorably worked at Staples selling business machines – printers, computers, hard drives, and the works. Alas, this was not by choice; my parents coaxed me to decline USC’s Marshall Business School Honors Program because … I don’t know why exactly.

Anyway, I did what any employee was hired to do – stand there, offer tidbits of advice, take 15-minute breaks, and stand some more. It was quite challenging … to stay awake.

About one week into my work, a Lexmark sales representative came to the store to talk about a new product line. Unfazed by the brand, I half-heartedly listened to the presentation.

It went something like, blah blah blah, blah blah … blah. “10% commission.”

My eyes stopped darting around the warehouse and sat my body straight. “How often do we get paid?” “… Wonderful. Write down every machine I sell and you’ll pay us at the end of the month. Got it.”

In less than a month, I sold so many machines that I had to attach an extra sheet for the commission sales list. I made more money selling machines than I did via salary, which wasn’t much to begin with. I was on a mission: to make enough money to woo Julie. Needless to say, mission accomplished. Thank you, Lexmark.

julie lawrence photo strip

Apple

For the longest time, I was a huge PC nut. For those who didn’t know, I used to own two gaming cafes – the ones with large unilluminated rooms filled with gaming PCs and greasy boys. I even worked at UCLA’s IT department (all PCs) for two years to pay for college rent.

Then one day, I became a wedding photographer. Not wanting to be harpooned by my peers, I decided to buy a Mac Book Pro. It was the start of a beautiful relationship. Next came multiple iPods, numerous iPod Nanos, iMac, iPad, a few iPhones, and now Mac Book Air.

apple product lineup

Additionally, if anyone asked me which product to buy, I always suggested Apple. And I don’t get a commission nor have stock shares in the company.

Referrals

I offered two scenarios from my life to express the possibilities of emblazoned enthusiasm; both of which probably made the aforementioned companies a lot of money.

This all ties back to the idea of market versus social norms. Staples was an example of market norm – I was paid to promote. Apple was an example of social norm – I promoted without pay. There are pros and cons for each scenario.

Pay Referral Fee | Market Norm (e.g., Staples)

PRO CON
Motivated by money, people will work hard to promote. However, there will be ulterior motives, thus less trust. If money is inadequate or interest in brand wanes, people will cease to promote.

 

Do Not Pay Referral Fee | Social Norm (e.g., Apple)

PRO CON
Brand evangelists do not need money to promote. They do it out of love. You have to win their trust and love before they promote you.

 

Unfortunately, to create brand evangelists is not that easy. I outlined 7-points in my upcoming bookSocial Media Marketing for Digital Photographers.

Decisions

You have to ultimately pick one side. You can’t be both at the same time for the same situation. And it’s nearly impossible to switch back and forth. So, what will it be? You decide.

I told you it’s not so easy! Lastly, think long term.

If you’ve enjoyed this post, please share with your peers via social networks below. And comment one brand you’d gladly promote without pay (e.g., U2, Apple, Whole Foods, etc.).

Cheers,

Lawrence Chan

P.S. Julie and I have been dating for 8 years.

P.P.S. I’m going to watch Twilight Breaking Dawn Part 1 this Saturday. Exciting!

twilight breaking dawn pt 1
Image courtesy of Twilight