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If you read the book, Get More Referrals Now, Bill Cates states that most customers who refer you will do it because they A) want to help you out and B) because they want to help a friend out. They don't do it because you're offering them a financial incentive.
I heard from a sales consultant that 20% of your customers will refer you without your asking for referrals, assuming you're referable. 60% of your customers will give you referrals if you ask. Most people want to make sure that if they give your name/number to their friend/associate/family member, etc that they're going to be treated well. There is nothing worse then giving someone a referral and then finding out the person you referred them to did not service your friend/family member. Now by referring someone you look like a chump.
A simple hand written thank you card may be all that is needed. For someone who has referred a lot of business to you (multiple names - and is a champion of your business), you might give them a piece of apparel from your company with a logo on it, or a gift certificate to a nice restaurant, etc. The value need not be big. You DO NOT need to do this for every referral.
What is important is that you're consistent. You must say thank you and acknowledge the referral and follow up with the person who referred you so that they know you've taken care of their friend/family member.
How you treat the referral relationship is much more important than the financial "reward" you send the person. Your sincere thanks and respect for their friend's contact information is what they'll appreciate the most.
On your thought of $175... that is a pretty nice finder's fee. What is your sales cost to get a job? If that customer who signs with you is doing a $2,000 job, that is just about a 10% referral fee. Unless you've now marked up the job to cover this referral fee by 10%, you've lost any profit on the job that you've made. I think you're giving away too much - and not recognizing what's truly important in the referral process.
Last note... about being referable - make sure your business is running in such a manner that your customers want to give your name to their friends and families. If you make them look good to their friend's because they were right, it was a good idea that they recommended the friend to you, then you make them a hero. Your new customer had a need and your other customer helped them out by sharing your name to help solve a problem they had. You've got to be easy to do business with and consistent in your results. Do the little things rights and follow through with your customers to thank them and let them know you appreciate the referral and that you took care of their friend.
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