Dear Preston,
I have always felt that there is nothing wrong with paying commissions, and this practice has never caused me any problems. However, a new client just found out that I do this, and now she wants to fire me. How do I save my job?
Sincerely,
Very Worried
Dear Very Worried,
Let me first thank you for having the courage to address a very sensitive topic. However, paying commission should NEVER be an acceptable way of doing business. OK, folks, maybe I live in a bubble, but I just don’t think it’s cool to pay or receive commissions without your client’s knowledge.
The only way you *might* be able to save your job is to come completely clean with your client. Explain that you and your vendors have an agreement of giving each other a cash “finder’s fee” and that this fee in no way impacts your client’s final cost. (Talk about stretching the truth…) Therefore, you didn’t think it was necessary to inform your client of this arrangement. BUT, you also MUST make sure that your vendor is not shortchanging your client in order to pay you a commission and still make profit.
My humble advice to you is to learn from this very valuable lesson. Please join the many folks in the wedding and event planning industry who refuse to pay or receive commissions. You never want to cheat your clients. That’s just bad business. Period.
Now a question for all of you: Is it more acceptable to pay a commission if you provide a service such as wedding planning or designing than if you provide a product such as a flowers or invitations? How would you have answered Very Worried’s question?
Have a question for me? Send it to dearpreston@prestonbailey.com.
PREVIOUS
George Bernard Shaw once said: “You see things and say, ‘Why?’ But I dream things that never were and say, ‘Why not?’” That quote embodies how Preston Bailey approaches every event.
nina {nina renee designs}
May 17, 2011
Wow…I think your answer was perfect! A hard lesson to learn for ‘Very Worried’…but, very necessary!
Jennifer
May 17, 2011
When I first started my business, a seasoned planner was kind enough to grant me a general interview to take a look at my portfolio. I offered a commission for any clients she sent my way and she quickly let me know that commissions were a very sticky subject among wedding vendors.
She did offer a wonderful suggestion, that I offer clients a discount for using a planner/coordinator. Not just her services, but anyone. I love this idea! Many times, it makes us both a hero. The discount is clearly outlined on the invoice and clients know it doesn’t affect pricing because I typically disclose pricing guidelines before knowing what the final project will entail and how much involvement a planner has.
PrimeExample Events -Elaine
May 17, 2011
We don’t accept or pay commission to the vendors that I work with. We don’t want our clients to think that we referred a vendor to them just because we receive a pay out. I did have a DJ pay me a fee, because I referred him to a fellow planner, I only accepted it because I was not the planner on the event.
When I am assisting with overnight accommodations, it is a practice that you can request 10% commission on the final pick-up, if my commission is going to make their room rate considerable higher than I will not request the commission.
Remember be true to yourself and your clients.
Aydin Productions Ltd.
May 17, 2011
As a film maker ( wedding & events) a commission or discount is perfectly acceptable to give to a wedding or event planner that is providing me the service of getting me clients and taking the time to deal with those clients – contracts, payment etc. I am fully supportive of paying them for that time. However the planner must make a decision if they will do the work and also that they are clear with their client about this situation. Some prefer to give the discount to their clients which I am fine with if they do the work as mentioned.
I worked as a Concierge for many years and commissions were accepted for activities booked etc. (not restaurants ). The thing I always stated to the companies offering services is : “Thank you for the commission , but my main reason for booking them with you is that you are the best at what you do and you take care of my guests like I do.” I never booked a service because of commission and nor should anyone.
Just my two cents. Keep it real.
Wendy Kidd
May 17, 2011
Agreed, hard lesson to learn for “very worried” but hopefully it will convert another vendor to this way of thinking. I think it is unacceptable as well and while many who accept or offer commissions think that it has no sway on the way they do business, they are wrong. Unfortunately, I know some planners in my area that have agreed to not accept kickbacks and commissions, but continue to do so and deceive those they work for/with. In my eyes, it is a very shameful practice.
Kristy Giardinoi
May 17, 2011
I personally feel Wedding Planners are there to save a client money from the relationships they have built with their network of vendors. I build my network knowing that every vendor is well reputable and good at what they do and not because they offer me finder’s fees. I have vendors for every type of bride and every type of budget. However, I do work with vendors that pay commissions but what I like to do is use those finders’ fees and pass the discount down to my client who has hired me to plan her wedding.
The sticky question I feel is do you receive a finder fee for a client you referred who has NOT booked you as a wedding planner? (and in my mind would have referred the client to the vendor anyway regardless of money) Is this something that you should accept since you didn’t charge the bride who was looking in the first place? This goes back to Preston’s point, with why in this industry can we not just refer vendors for a job well done and for work they do?
Michele Birkner
May 17, 2011
Love this topic, so glad I wasnt the only feeling this way, Mr. Bailey Im with you on this one, I dont like and I dont plan on participating in it!
Angela
May 17, 2011
Commission is such a great deal in my country and exist really strong. I try to pass on as many discounts to my client where I receive discounts or commissions. It really does not guide my final decision cos all I’m concerned about is the overall success. I have seen other planners recommend vendors that are useless all in the name of commission. A very thin line…
Georgianne Vinicombe
May 17, 2011
I completely agree with you. I have never accepted a commission and I refuse to pay them. I recommend vendors to my clients that I know do a great job and they refer business back to me because they know I will take good care of their clients for them. My business was built on that and I refuse to change. Thanks for another great post!!
crismarcuyares
May 17, 2011
Preston after I read your article, which was interesting, I Would like to know the secret for get paid in full before the event.
My clients wants to know the budget before to watch the desing… and this is a huge problem for me, because I feel I waste my time for nothing
I hope your answer about it, and thanks for share with us, your experiencie in this area.
Crismar Elena
From VALENCIA – VENEZUELA
Keith
May 18, 2011
I think that frist and formost the client shouldnt know your business practices! That is for you to sleep with at nite. Now I do get commisions and get discounts, but i do not let them affect my swaying a customer one way or the other. If I am able to get a bride what she wants and pass the savings on ther her i will. Often times i have had brides who want a room or this or that and it was out of her price range if she really wanted it i have been know to strech and say let me see what i can come up with and calll them and say hey Apply my discount or commison to said item and help the bride get what she wants!! And in turn i have created a customer for life and a great marketing tool… but i cant stress enough!! Keep Clients out of your biz… that way people dont get pissed!!
Kristen, Parties by Kristen LLC
May 18, 2011
I never take a commission and if one is ever given, my website and agreement state that any and all discounts or commissions, will be passed on to the client. I never want to give the impression that I’m working for a venue, photographer, etc., but that I always work for my clients.
Jean Neuhart
May 18, 2011
Honestly, there’s no difference between offering a service vs a product. Both are goods that you are providing to your paying customer. Charging your customer AND accepting commissions, as is paying commissions to a vendor who is also being paid by the client, is double-dipping. The person being paid either works for the client or the commission-payer – not both.
Leslie Palme
May 18, 2011
Preston, I stand with you on this. It is a situation that our industry is rift with. I love just putting together the best teams possible for my clients to insure their creative is met. It is an age old conundrum.
dews of keziah
May 18, 2011
Wow. Thanks for that clear up. At were I did my internship as an event coordinator I had seen people from other event companies work and receive commissions. When I asked by boss about it, she said it all depends on you as an individual, on if you wanted to take or pay commissions. Now that I am starting out on my own, I have it written in all my contracts in capitals letters saying NO COMMISSIONS will be paid or received. Very Worried, its going to be alright, at least you’ve learned about the pros and cons of taking and paying commissions. It is well.
design elements
May 18, 2011
i like your answer A LOT, Preston!
Ebony Peoples Events & Design
May 18, 2011
I definitely agree with your response to Very Worried. These commissions that usually happen under the table are deceitful to clients. I believe that clients should be fully aware of what they are paying for (products, services, etc). As a planner, I feel it’s my job to help my clients understand their budget and what things actually cost.
Kim {Something Spectacular/Something Floral}
May 18, 2011
Ditto what Georgianne Vinicombe said. In over 10 years in business, we’ve never accepted a commission and we do not pay commissions. When we recommend other vendors to clients, it’s based on those we have experience with who do a great job and perform consistently. We trust that other vendors who refer business to us are doing it for the same reasons. Commissions, and the (often subtle, but ever-present) expectations to pay them in exchange for referrals, is one of the primary reasons why there are some planners in our area that we have distanced ourselves from and with whom we refuse to work.
First Class Weddings, Inc.
May 19, 2011
I understand your response to Mr. Worried. However, in certain regions collecting a commission from a vendor for sending them repeat business is common and expected. Reason being is because some vendors don’t even have to spend a dime on marketing to gain the client in the first place and this is due to the referrals they receive from planners, designers etc. Because of this vendors simply do not have to market themselves at all (and may not even have a web site) because they are so busy with referral business that is sent to them. So in all fairness, vendors give a commission to those loyal companies that hire them to compensate for not having to market themselves to potential clients. This makes sense to me because marketing dollars and time doing it are very expensive and in order to recover those costs we would have to charge the client an exorbitant amount more in direct fees which doesn’t look so good in comparison to the competition (I estimate about 40% more).
So, my question to you is “how much do you charge a client in fees” if you don’t collect commissions from any vendors (50% above cost, 100%? And then, do you itemize a clients expenses so they can see your fee is double the cost of them doing it themselves?
Savannah (Pearls and Pages)
May 20, 2011
I’m not an event or wedding planner or designer, but hearing you speak about commissions many times before, Preston, I have to say this is sage advice. Very Worried has indeed learned a valuable lesson and while I’m not super familiar with the pros and cons in real-life scenarios of vendors who chose to go the commission route, I have been the bride and hands down would never choose a vendor who works this route. It’s too much of a scratch my back, scratch yours scenario. I believe that recommendations from vendor to vendor is a good word-of-mouth business and in my experience of working with wedding vendors, this is a golden tactic. You don’t have to be the photographer and rave and rave about a particular lighting guy and dump on another (bad-mouthing is never a good thing– very unprofessional), but if the bride asks I believe it’s a fellow wedding vendor’s duty to the industry to hand out recommendations. Leave it up to the bride or the designer to choose the vendors, commission-free. You’ve been a great example of commission-free practices, Preston, and if you, the big-wig, can manage it, I believe the rest of us can, too!
Good luck, Very Worried, but with Mr. Bailey’s tips and with this experience on your plate I think you’re looking at a great future on out– this is a learning experience, even if in the past your commissions have not posed problems. Give it a try a different way now perhaps… Best of luck and thanks for the Dear Preston column, Preston. Love it!!
Cheers,
Savannah