Credit: Illustrations: Rob Ullman

When Francis Harvey & Sons, in Worcester, Mass., gets a referral, chances are it's the person who has been referred calling the company about getting an appointment. "A lot of times, it's a direct call-in," marketing manager Sheila Fitzgerald says. "Generally we want to get them to call us because they're more serious at that point."

Francis Harvey & Sons does that by explaining to customers that referral rewards are based on them contacting whoever it is they are referring and that person in turn contacting the company. When Francis Harvey gets a referral, it immediately sends a lottery ticket to the referrer that says, "Thanks a Million." A sale is rewarded with a gift certificate to the customer's favorite restaurant.

Fitzgerald says that Francis Harvey & Sons may switch to reloadable gift cards. "It's more appealing because someone will be walking around with a Visa card with our name and logo on it." The company also follows up jobs with neighborhood mailers.

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Mailers are a key ingredient in Energy Swing Windows' referral program, which generates 70% of the company's business. Owner Steve Rennekamp says that installers are the Pittsburgh company's point of contact for referrals.

Installers tell satisfied customers that Energy Swing depends on referrals and asks if they would be willing to send a letter to anywhere from 25 to 50 of their neighbors. The handwritten letter goes out under the homeowners' signature and includes discount coupons. If the company sells a job for $4,000 or more from that letter within a year, Energy Swing pays a referral fee that is now up to $300 per sold job. Rennekamp considers it money well spent.

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Bob Quillen, president of Quillen Bros. Windows & Gutter Shutter Co., in Bryan, Ohio, says that sales reps let customers know the company will discount the job anywhere from 12% to 15% if the customer supplies five referrals. Customers are given lots of time to compile that list. "We ask for those five names 30 days after installation," he says.

Quillen Bros.' referral rate has gone from 7% of its business two years ago to 10% in 2009. "I look for lead sources that don't cost money but cost time and energy," Quillen says. "Then I follow through." The cost, he adds, is in "accountability and procedures."

Almena Faux, director of outside sales for P.J. Fitzpatrick, in Newcastle, Del., advises companies to be "absolutely friendly" when contacting referrals and to offer referrals a special discount. Castle Windows, in New Jersey, rewards those who refer, but also asks them to advise anybody they are referring that the company may be calling (or e-mailing) them. Referrals, president Chris Cardillo notes, are either "very interested or very uninterested."