What's it worth to you, and your company, when you can get past customers to bring you new business? Carl Hyman, chairman and part-owner of Alure Home Improvement, figures it's at least worth the cost of a trip.
Several years ago the Long Island, N.Y., company began a Partner Points program. Past customers who earn 200,000 points win an eight-day, all-expenses-paid vacation for two to the Caribbean. Customers of the $27 million company, which installs kitchens and baths, Owens-Corning basement finishing systems, and roofing, siding, windows, and gutter protection, accumulate points based on the dollars spent by those they recommend to Alure. In addition, of course, their own projects count toward the point total. Beyond that, past customers get 10,000 points for attending the party that Alure throws in its showroom every other month, a soiree that allows salespeople to network for new business.
Theoretically, Hyman says, a customer could do one small job and rack up points simply by recommending friends to Alure.
Alure, which has been sending referral sources to the Caribbean for 14 years, used to award the trip to the customer who sent the most business to the company in a year's time. With Partner Points—a registered trademark—that broadened to include anyone who referred a certain volume of installed business. Points never expire.
In the program's first year, Alure sent five couples to the Caribbean. In the second year, the company sent eight couples.
Hyman estimates the cost of sending two people to the Caribbean — including hotel, transportation, meals, and special luxury services, such as manicures and massages — at $8,000. “So if they give me $100,000 worth of business, that's 4%. If you can hold marketing to 4%, for repeat and referral with higher margins, what more do you want than that?”
Hyman estimates 60% to 65% of the company's work is repeat and referral, and 80% to 90% of the company's profit comes from that source. Alure spends about $800,000 annually on advertising. The Partner Points program is explained in depth on the company's Web site (www.alure.com).