Credit: Illustration: Peter Horjus/

Every salesperson loves a referral lead. And why not. Someone ? neighbor, friend, relative, or some trusted third party ? has told the prospect about your company, the work you do, and how good you are. The only thing at issue is the price.

The prospect's positive opinion of your company doesn't mean that a referral is automatically going to buy from you, of course. But it does mean that if you keep the price right, you're going to sell the deal if the homeowner can afford it.

On the other hand, if you're walking into a typical lead situation, you're already facing two challenges: everything the homeowner has heard about contractors and home improvement companies deceiving people, ripping them off, or doing shoddy work, and the fact that the homeowner doesn't know anything about you.

You're going to have to spend some part of that appointment proving to the prospect that you're a credible person, that your company is credible, that you have a good, reliable product, and that if he or she buys that product, your company will service it. On the typical sales call, unlike in a court of law, you're guilty until proven innocent.

That's why referral leads close at a much higher rate. If the average close rate in the home improvement industry is 30%, the average referral lead closes at about 60%.

Create the Connection

But how many referral leads are you going to get? Not many because there aren't a lot to go around. The best home improvement companies might get 20% to 25% of their business from past customers, either repeat or referral. And referral leads usually go ? as they should ? to the reps who generated them.

So how can you turn that canvass or telemarketing or home show lead into an appointment that has all the confidence and credibility of a referral?

Here's how: By connecting that name on your lead sheet to one or more of your satisfied customers.

To do that takes both preparation and gumption. When you get the lead, don't just run straight to the house. First do a little research on the owner, the property, and the neighborhood. Today there are so many ways to obtain information that there's no excuse not to come fully prepared.

Use Google Earth to get a picture of the house. Now go to your company database and locate the two or three installations closest to the lead address based on ZIP code. Program those addresses into your global positioning system and plan to be in the neighborhood 30 minutes early. While you're driving around, stop at any real estate Take One boxes so you can get an idea of what properties are worth in the neighborhood.

She's Pitching

I developed this system during the 1990s when I sold windows, siding, and gutter protection for Dixie HomeCrafters. One day I arrived in a neighborhood about 40 minutes early for a sales call. While I was driving around I noticed a house with our company's windows in it. I stopped and knocked on the door, explained to the homeowner who I was and the name of the company I was with, and asked her if ours was the company that had installed the windows. When she said that it was, I offered to help her clean them and to show her how they worked. I also asked her if I could stop by later with the people who lived two doors down so that they could see the windows installed and could ask her some questions.

Later, I came back with the prospect and stood back while our past customer talked about how the windows cut down on heating and cooling bills, made the house more comfortable, and all the other reasons why she liked them. I thought: She's pitching! And she's pitching it from the heart! She's doing it 10 times better than any salesperson could do it.

When the visit was over, I went back to the house with my prospect, resumed the presentation, and made one of the easiest sales of my life.

Here's what you can do to turn those past customers, who are neighbors, into referrals. When you get to the neighborhood, knock on the door, introduce yourself or, if you were the one who sold the job, renew the acquaintance. Ask that past customer about the job, your company, and his or her satisfaction with the installation. If there is any dissatisfaction, contact your office about it.

Then explain to the past customer that you have an appointment at such-and-such an address and ask if they know that homeowner. Ask if it would be OK for you and the prospect to stop by in an hour or so to look at the work your company did on their home. Ask: "If [the prospect] were to call, would you be so kind as to share your experience about our company and your thoughts on the project?" Then confirm the phone number.