Finder’s Fee: An Effective Marketing Tactic

6a0133f3fc5805970b015433314fae970c-320wiOne of the first steps you should take to promote your family child care business is to offer the parents in your program a finder’s fee. It’s a marketing tactic that has helped many child care providers fill openings in their program.

What’s a finder’s fee?

A finder’s fee is a gift you give to parents in your program who have referred new families to you. Tell your parents, “If you refer a new family to my program and I enroll the family, I will give you a finder’s fee after the new parent has paid me for at least a month of child care.”

The finder’s fee you offer parents in your program can be money, gift cards, free child care or anything else you want. The amount of finder’s fees I’ve seen from talking with child care providers across the country ranges from $25-$50 in most cases, or free care from a day to a week. If you give out cash or a gift card, you can deduct 100% of the cost as an advertising expense.

This is a no-lose way to promote your program. Unlike paid advertising, you will only pay something after you’ve enrolled a new family and received at least a month’s worth of child care. The parents in your program will be initially spreading good worth of mouth without cost to you. They will also be selective in who they refer to you because they will want the new child to be compatible with their own child.

When I discuss offering a finder’s fee in my workshops, I find that few child care providers are willing to pay more than $50. When you think about how many thousands of dollars a new client is worth to you over the years they remain in your program, I think a finder’s fee of several hundred dollars is well worth it!

In fact, during financial hard times a high finder’s fee may encourage current families who may be financially struggling to make more of an effort to give your referrals.

Some child care providers object to offering a finder’s fee because they believe doing so makes them look desperate or lowers the value of their services. Instead, they give parents a thank-you note. I don’t share this view. But other businesses offer deals to customers and few complain.

You could also consider offering a finder’s fee to clients who have left your program, other child care providers, or parents who have contacted you but decided not to enroll their child in your program!

Do you offer a finder’s fee, and if so, what kind of success have you had?

Tom Copeland –

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Marketing smallFor more marketing ideas, see my book Family Child Care Marketing Guide.

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4 replies

  1. Good subject Tom. However, maybe the providers that prefer to give a “thank you note” should also conduct an anonymous survey asking parents which would they prefer: a thank you note or $25 gift certificate for providing a referral? just a friendly suggestion. I believe thank you notes are always appreciated and if it is working well for a provider then well done! 😉

  2. This is a great idea that I never though of. I will absolutely be using this from now on. I think a week of free daycare to the finder would be a great incentive! 🙂

  3. I read somewhere of one child care provider who sends flowers and a gift card to the refering clients work, this way when the client gets the flowers everyone at her work will ask her why she got them which causes additional advertising for the center.

  4. Great idea!

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