What are ‘Referral Fees’ and How Can They Get You Key Introductions?

As a proactive business buyer you sometimes must get as creative

as you can to qualify viable business acquisition candidates.

If you have your eye on a company that is of great interest to

you and it is particularly challenging to get to a specific

corporate decision maker, you may want to consider using

referral fee’s as a creative means to get that critical


Use of referral fee’s in many industries is nothing new to get

highly sought after introductions, but using them in a business

buyer qualification process is quite unique.

Responding to a business-for-sale listing is easy for a business

buyer because the business seller has made an “official”

proclamation that he intends to sell his company. For companies

that are not “for sale”, but might be, it is imperative that

the business buyer contact a senior level manager who has the

authority, knowledge and potential motivation to consider a

viable purchase offer. Being able to differentiate which

managers within a targeted organization have the status and

motivation to say “yes” to a purchase inquiry, versus most

managers within the same company who naturally have other

motives and reasons to always say “no”… is fundamental to

securing realistic initial acquisition discussions.

How Do I Get to That Guy?

Automated phone answering systems, voice mail, administrative

assistants and receptionists limit initial voice contact with

senior executives. E Mails are also often deleted, or never

read if the corporate receiver does not recognize the sender’s

name among hundreds of daily e mails they receive. Approaching

senior managers in company parking lots is forbidden and trying

to talk with them privately at a trade show is very challenging.

Effective use of a reward base referral technique from someone

who either knows or works with your targeted corporate contact

can differentiate you from all other business buyers. It may

also be the best and ONLY means you have to start a merger or

acquisition dialogue.

Salesman: God Bless Them!

Sales personnel, either targeted company employees, or better

yet, contracted independent sales representatives; offer you

the easiest channel to get that targeted company introduction.

It may be too much of a generalization to make, but sales

personnel more than any other function in a company offer you,

the business buyer, five traits that you can leverage to your


1) Sale types typically will talk to anyone about anything –

simply contact them, ask your questions or seek their help.

2) Sales personnel are inclined to be “independent operators”,

even within the most disciplined of organizations; they work

their own programs, when and where they want, with relatively

little concern about internal politics

3) Sales people answer their phones, listen to their voice mail,

read messages and return calls because they think you want to

BUY something!

4) Salesman know just about everyone within every branch of the

company and for various reasons have consistent exposure and

often well established relationships with key corporate

decision makers

5) Sales types are very motivated by money! They will especially

talk to you if you can potentially do two things for them:

A) Offer them “easy money”

B) Provide another viable contact for them to potentially

land a better sales position

So… How Does the Deal Go Down?

From anywhere in the country you can call into the corporate

office and ask to speak to a local or regional sales

representative. Once you get their number, simply call them and

introduce yourself as someone who greatly admires their company

and has interest in understanding who within their senior

management can say “yes” to a business merger proposal (be sure

to say only “merger”). Sales types understand and appreciate

this inquiry process because they live it everyday. You have a

person on the other end of the phone who is naturally motivated

to help you. More often than not, all you got to do is shut up

and listen to the information that flows.

If you get any form of resistance or down right rejection,

remember you can always simply thank them for their time and go

call another sales person. If you are hearing cooperation then,

and only then, do you offer a modest referral fee arrangement.

It is critical that you tell the salesman that the referral fee

is standard practice for your firm and that it can either be

paid to them directly, in confidence, upon eventual merger or

acquisition closing, or, you’d be happy to donate the money to

their favorite charity. Most will simply help you for no fee.

To conclude, the referral fee process, be sure to document the

following relevant information gotten from the sales

representative: The spelling of the name of the senior manager,

their official title, confirmation that this manager is the

best contact within the company, a clear understanding of their

relationship with that senior manager (if weak, try another

sales person) and their OK that you can use their name to get

the senior manager to talk with you.

Remember, you really only have one shot to get to that senior

manager, so if you think you need to contact two or three

salesman to validate who really is the key manager to call

about mergers and acquisition inquiries and who of the three

salesman has the best relationship with that senior manager

than it is in your best interest to do so.

Getting to difficult-to-contact executives about acquisition

interests often has to be a premeditated, systematic, creative

process. Like in any selling situation, getting to the “right”

decision maker dramatically increases the probability of sales

success. Incorporate this technique into your company

acquisition qualification process.