Bill Cates, author of Get More Referrals Now, is the recognized expert on the subject. He's worked with a number of home improvement companies, including Renewal by Andersen and ABC Seamless. Contact him at email@example.com.
Replacement Contractor: Why should home improvement contractors push for referrals?
Bill Cates: It's the easiest way to get another job and the way your customers want to meet you. It costs nothing. Your profitability and closing rate will be higher. The size of that job will be bigger. And customer loyalty will be greater. One more thing: The client who comes through referral is 2.5 times more likely to give you a referral.
RC: How do you make your company referrable?
B.C.: Part of it's a fair price; part of it's the small things: returning phone calls, showing up when you say you're going to, calling ahead if you're going to be late. Let them know you're juggling multiple jobs. Bid carefully so you don't have to go back and ask for more. Beyond that, meet their expectations, then go a little further. Clean something up, leave something behind. (Renewal by Andersen leaves a bottle of window cleaner.) Look for opportunities to do not just what's right, but a little more.
RC: Who should ask for the referral?
B.C.: Depends on the company. It can be installers, but more likely sales reps. If reps put their minds to it, they can have the best type of relationship with that client. They do it by staying in touch throughout. And at the end of the job, find out if there are any little negatives and ask customers if they're happy.
RC: When's the best time?
B.C.: You can ask when the job is done. You can also ask a lot sooner. It depends on the customer. Say you have a customer who's really excited at the closing of the sale. At that point, the salesperson might say, “By the way, do you know anyone else who's expressed an interest in the things our company does?” Or, just plant the seed. Say to the customer, at closing, “By the way, don't keep us a secret out there.”
RC: What should a contractor shoot for in terms of referrals as a percentage of business?
B.C.: One hundred percent is not too much to ask. There are people out there doing it. Some ABC Seamless franchises I've worked with are 60%, 70%, or 80% referral-driven. It starts with the goal of creating it. And it's got to be the goal of the company from the top down. The customer experience has to be a grand experience. And the sales force has to be much more proactive.