The Second (2nd) Biggest Mistake made by contractors is they don’t have a formal (or organised) system of attracting Referrals…a really effective Referral System is so simple to implement you will kick yourself!
Some contractors would say they get a bit of extra work from Word Of Mouth Referrals – this is good but it could be Fantastic if a System was put in place to generate bucket loads of highly qualified leads that expect to pay the money You ask for!
Now, just like any other part of Your Marketing arsenal, You should have a structured plan or system for Your Lead Generation from Referrals.
In my Weed and Feed Lawn Care business at Lawn Green, I can tell you what each Marketing effort generates in % terms. So, for example, with Leads Generated from Referrals, we get around 75-80% of Leads converting into Paying Customers.
Why? Because all the hard work in trying to talk a new Prospect into buying from us is already done by an existing customer who has referred the Prospect to us! So as a betting man, I can tell you that I have an 80% chance of converting a Prospect into a Paying Customer if that Prospect has come to Lawn Green via a Recommendation from an Existing Customer. Good Odds, eh!
So it leads us to say that it really does pay for you to educate your customers about referring their family and friends to you.
In summary, Referrals come from the following:
- Non-competing Businesses that share the same Customer base as You
- Family and Friends
With Customers: At every point of contact (including telephone calls, quotes, service, invoicing etc) you have with Customers remind them to send Referrals your way – maybe this is best timed for when the customer is the happiest – maybe you can share with us examples of letters /flyers you have sent to customers which include a request for referrals
With Non-Competing Businesses: form strategic alliances with other businesses that do business with the same sort of customers as You. You must be prepared to Give Before You Receive! That is, refer your customers to the other business to prove you mean business in the strategic alliance
With Family and Friends: Go to a mountain top and yell out to all your Family & friends that you need them to advertise your business to their family and friends
One last thought / question: Should we pay for or reward Referrals? I don’t think so! Why don’t you Leave A Comment – I would love to know what people think.