Client Referral Rewards

Legitimate Marketing Or Unacceptable Practice?

Your client tells you they will send lots of friends your way, if only you will give them a discount for their goodwill. Or you decide that because your neighboring practice offers a $200 incentive for every referral, perhaps you should do this too in order to compete. You want to show your appreciation for the new business that might have otherwise incurred advertising costs, so why shouldn't you offer financial acknowledgement of the referral?

Hair salons and massage practices rely heavily on referral rewards programs. So why not Medical Spas or Cosmetic Centers? Well, if you are a physician and you offer consideration of any kind for referrals, you are in direct conflict with AMA Code of Ethics Opinion 6.021. You may also be violating your state Board of Medicine regulations, many of which simply defer to the AMA Code for ethical compliance. The opinion argues that the reward may incent the referring client to alter the information and expectations to others in an untruthful or unrealistic way. 

Early in my practice, prior to the AMA opinion, I succumbed for a short time to clients requesting rewards. The referred clients never seemed to have the same level of motivation to have a procedure as someone who came on their own accord. Now when a client asks me for a discount or a free service because they will send lots of friends, I simply tell them the following:

"A referral is the greatest compliment you could ever give me. And I appreciate the kind mention of your pleasant experience. I promise to always give you and those you send to me my very best work."