Almost all contractors would agree that “word of mouth is the best form of advertising.” It’s free, it’s effective and it’s substantive. A referral leaves you with a good feeling, because you know it’s the result of a job well done for some satisfied customer.
Unfortunately, when it comes to generating referrals, most contractors subscribe to Blanche Dubois’ philosophy of relying on the kindness of strangers. They sit around waiting for past customers to say nice things about them. What they fail to realize are the myriad ways available to prime the pump of endless referrals. Here are 10 such ways.
1. Ask for them. Make it your company policy to ask every single client for the names of other potential clients. Do this at the completion of every job. Ask your satisfied clients not only for referrals, but for permission to use them as references.
Also, solicit testimonials from them. If you are any good, from time to time you may get a letter from satisfied clients gushing how happy they are with your services. Many others are just as happy, but don’t take the time to write. They need prompting, and you need to make it as easy as possible for them to put their high regard for you on the record.
Often, they will compliment you verbally. When that happens, get ready to spring into action documenting what they said, and gaining their permission to use it for promotional purposes. A sample letter to solicit such testimonials appears in the box on the next page.
Testimonials go hand-in-hand with referrals. They are the best marketing tools a contractor can have. Start compiling a treasury filled with testimonials.
2. Exchange referrals. “You scratch my back, I’ll scratch yours,” is a time-honored tradition of the construction industry. Work out understandings with subcontractors or even competitors to recommend one another.
Be careful, though. Only recommend people who behave professionally and do top-notch work. Bad reputations are contagious.
3. Pay for referrals. Auto dealers do this, so do realtors. Why not contractors? Set up a reasonable “finder’s fee” scale ranging from, say, $100 to $1,000, depending on the size of the project. Make it payable upon job completion and payment in full.
Don’t forget to publicize this to all present and past clientele. Don’t just bury it in a fine-print paragraph. Give your finder’s fee policy prominent play on its own page or on a separate sheet of brightly colored paper in your promotional materials.
Be sure to promote this to your employees as well as clients. Make it your policy that anyone whose referral leads to a successful project is entitled to a finder’s fee. Put up a “Think Referrals” poster in your office. Give everyone company business cards to pass out to potential clients.
Extend the finder’s fee to all of your suppliers and peripheral business contacts. Tell your attorney, accountant, association staff people, insurance agent, banker, subcontractors, supply house employees, butcher, baker and candlestick maker that you pay for referrals. It’s like having dozens of salespeople on staff — all of whom work dirt cheap!
Be sure to keep track of these referrals and follow through with payment. By the time a project is done, many of your benefactors will have forgotten they were entitled to a finder’s fee. Imagine how pleased they’ll be to have your check materialize out of thin air! Think of how enthusiastic they’ll be to track down other jobs for you.
4. Go back in time. Have your estimators and project managers keep a tickler file of past clients they’ve worked with. Once or twice a year, have them give their contacts a call to find out if any more work is in their hopper, and if they know anyone else who has something coming up.
Encourage your key employees to cultivate personal relationships with potential clientele. Give them an entertainment budget and tickets to ball games and other events. Stipulate, however, that they must accompany clients to these events, not just pass the tickets on.
5. Always acknowledge referrals. Every time you get contacted by someone referred to you, fire off a note of thanks to the person who made the referral. Remind them that they are entitled to a finder’s fee if the contact results in a successful job, but let them know that you appreciate their effort even if it doesn’t pan out.
Want to really show your appreciation? Enclose a lottery ticket with a note that says — ”No matter what, you’re a winner in my book.”
6. Cross-fertilize. If you do both residential and commercial work, make sure you promote your commercial services to the homeowners you work for. Ask them to pass it on to decision makers in the organizations they work for. Likewise, try to get your commercial clientele to spread the word to employees about your residential services. One way to do this is to offer a 10 percent or 15 percent discount to all employees of the client organization.
7. Appeal to ethnics. Do you have anyone on staff fluent in a foreign language? Be sure to publicize this in all your promotional materials (Se habla español). Print business cards in both languages. This will give you the inside track for jobs in a given ethnic community.
8. Seek out the influential “movers and shakers.” The average person has a sphere of influence of about 50 people. That is about the number of friends and family members apt to follow their recommendations.
However, the “movers and shakers” in any given community have spheres of influence that number in the hundreds or even thousands. Get to know these people and befriend them. Join the same community and social organizations they do. Do volunteer work for charities they are associated with.
9. Network properly. Most people think of “networking” as rubbing elbows and chit-chatting at a cocktail party. That describes the crude version, and it usually is a waste of time that results in nothing except chit-chat. Proper networking could be the subject of an article unto itself, but for now let’s just cover these important elements.
A. Hang around people you don’t know. Most people attending social functions feel insecure and spend most of their time mingling with friends and co-workers. Force yourself to stray away and introduce yourself to any movers and shakers you can identify.
B. Talk about their interests, not your own. Another common mistake is to bore people you meet by talking about yourself. If they’re interested in what you do, they’ll ask. Otherwise, the best way to get them interested is to talk about their favorite subject — themselves — and the work they do.
Ask open-ended and “feel good” questions: “How did you get your start in your business? ... What do you enjoy most about your work? ... What are the biggest problems you face?”
Perverse as it may seem, this is the way to get them to think of you as an interesting person!
C. It’s more important to collect business cards than pass yours out. The exchange of business cards is a ritual that usually concludes with most cards getting tossed in one another’s wastebasket. You can’t control what the other party does with yours. But once you obtain one from a mover and shaker, you have it in your power to follow up with further contacts.
You can send a handwritten note the next day along the lines of: “It was nice meeting you. If I can ever refer business your way, I certainly will.”
And, you can keep in touch with the person from time to time by sending clippings of newspaper and magazine articles that relate to their interests.
Best of all, you can refer people to them when the opportunity arises. And that’s likely to start them referring people to you.
10. Host a “salon.” That’s the term for a business mixer whose sole purpose is to generate new business for all participants. Basically, it’s institutionalized networking.
Business Networking International (800/825-8286) is a company that specializes in helping to arrange such sessions.