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Should I raise the referral fee for my referral business?
I founded a babysitting referral business at www.flowersitters.com and I currently charge families $10.00 to refer a sitter, and $7.00 to refer an additional sitter - short-notice fees, as well, if the bookings are made less than 48 hours in advanced, however, I don't tend to receive very many short-notice bookings.
I'm considering raising the referral fee to either $12.00, $15.00 or $20.00, but I am not sure. Right now, I answer phones and e-mails, contact sitters and the family to set-up interviews and exchange information, and then I release contact info after receiving the referral fee.
What would be a fair price to raise my current price to?
Thanks!
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Want to answer more questions in the Domesticity category?
Maybe give some free advice about: Babysitting?
I am a great deal older than most of the advisers on this site, so my advice will be somewhat different from what you may have received and may continue to receive from others.
Given the present state of the economy, the high unemployment rate and as cash strapped as many families are, I think you would be doing a disservice to them and yourself by raising your fees.
What I see you trying to do is raise you income through increased fees. As I said above this could do more you harm and actually lower your income through lost business. I took a quick look at your website and it appears to me to be some sort of franchise business. If allowable by the franchise, there are other ways to increase your income other than raise fees. Promotions are a very good way to increase and expand your business by attracting new customers while retaining new existing customers.
A few examples of some promotions you could run:
• Book 4 hrs get the 5th hour free
• Purchase 8, 12, 16 hrs of a sitters time in advance and receive a 5% discount.
• Run a special promotion; say a mid week promotions when bookings may be particularly slow.
• New customer promotion; 3 hrs for the price of 2 hrs Sun, Mon, Tues & Wen. 4 hrs for the price of 3 hrs Thu, Fri & Sat.
The promotions I am offering you are only suggestions as I do not know your business that well. What I do know is sales as I have been in sales for over thirty years and the suggestions above are based on ones I have used successfully in the goods I sold.
From what I see you are selling time and service. The service is babysitting which is also time. You need to attract people to your service by offering an inducement to try your service as well as to continue with you.
Overall I fell it would be better to promote your business in a manner that will attract new customers and retain current customers rather than raise prices. When you raise prices it may appear on paper that you have made bigger earnings. But when you compare unit sales for a period of time against the same period in the previous year you will see you worked harder for fewer sales and the increase in sales dollars is actually a loss in unit sales or loss in actual customer business.
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Raising the price may lose you buisness. A lot of mothers can't afford day care because of the price. Keeping your prices low helps them a lot. being a young mother I know. II looked into daycare while i would be at work but it was crazy high.
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