Building Profits through Customer Referrals

The traditional contractor was an expert on their trade. If it was a carpenter who could form any concrete job or the finisher who made concrete smooth as silk, the traditional contractor knew his or her business. However, there was also something that many contractors were not as effective at addressing.

Completing a job is still the best and easiest part for many contractors. When the project is completed too many contractors still fail in getting referrals from the customer. This not only is a failure to land future business opportunities but it is also a failure to bring a professional closing to your efforts. Let's take a brief look at the latter reason to ask for referrals and then focus the remaining article on the methods to employ in getting referrals from your customers.

Asking for referrals at the conclusion of your projects sends a very direct and professional signal to your customers that you are proud of the effort that your company has completed from start to finish. A contractor who is embarrassed by their company's effort will send the bill in the mail or "chicken out" and have their foreman drop the remaining bill on their departure from the job.

The contractor, or the estimator/salesman who landed the job, should approach the customer confidently, thanking the customer for the opportunity to perform their work. Then, the contractor should personally hand the remaining billing statement to the customer and walk through the life of the project, encouraging the customer to ask any questions that they might have. This effort brings a strong close to a process that was started to improve the customer's needs or meet their expectations.

Now, let's address the great need to solicit referrals from your customer. First, customers who are satisfied with the work you have completed are more likely to share the names of others who might be in need of your services. Why wouldn't they? Think about it! If you have just taken your spouse to a new restaurant and enjoyed a quality meal with attendants waiting on your every move wouldn't you be very excited about telling your friends about your experience? Many of us might even call a friend to tell them of the experience. The same is true for your customers if they are satisfied.

OK, let's assume that we are dealing with satisfied customers. Then how do we go about getting referrals from our customers? Consider a few suggestions and techniques.

  1. Just Ask!
    No secret here. Asking your customer for the names of others who might also be interested in your services and quality work should be as natural as breathing. How do you actually ask for referrals? Let me give you a non-threatening phrase you might adapt.

    "Mr. Humphrey, thank you for your business. We really appreciate the opportunity you gave us to do your work. We're always interested in working with good folks, would you be able to provide three or four names of individuals you know that might be interested in some of our services?"

    At this point you should be looking up at the customer with a pen and pad ready for the names. You may only get one or two names; then again, you might get five to seven names. It's happened to me several times. Keep that pen and pad in full view of the customer and watch the names start coming!
  2. Invite Customer's Friends to Job Site
    This technique is especially good if you have discovered in your selling process that your customer mentioned other friends of theirs with similar problems or desires. During this type of discussion you might ask your customer about what they know about their friend's problem or want. Then, as you get close to finishing your customer's project invite your customer to ask their friend over to see your crew's results. Always invite on the finishing up side so the customer sees the "good stuff" not all the torn up effort and debris. Often a live visit from the customer's friends may win you more work and is clearly a referral building effort.
  3. Give Away Three to Five Business Cards
    This is an old sales technique that still works. In this high tech world we live in it is still funny how many customers still ask for business cards. So, always give your customers more than one card; give three to five. While a few may be thrown away a few cards may also be given away to their friends when those friends ask about the great job that was performed. Giving cards away to your customers allows them to become sales people for you. Again, this is a solid referral driving technique that can land you work.
  4. Ask for E-mail Addresses
    Just as you might ask for the names of friends from your satisfied customer so too can you ask for e-mail addresses of their friends. It's a sign of our times when we memorize more e-mail addresses than phone numbers. Depending on the type of customer you have performed work for, try asking for e-mail addresses for their friends who might also need similar work performed.
  5. Follow-up with Referral Requests
    It is good salesmanship to always send a follow-up note to a customer after the completion of a project. Use this same effort to include asking for three to five names of friends or work associates who could use your company's efforts. I recommend enclosing a half page that your customer can easily write down a few names and contact numbers. Always include a self addressed envelop with a stamp to make it easy for the customer to just drop in the mail. You may not get many to respond to this effort BUT for those few who do it more than pays for the postage.
  6. Offer a "Commission" for Referrals
    A final technique that has been quite successful for many contractors is offering a commission to customers who refer you to other prospects that lead to a sale. I've seen residential contractors give $50-$100 to customers who gave them a lead that turned into a sale. This might not be appropriate with commercial customers however sending gift certificates, tickets to ballgames, wine packages, etc. are all examples of "commission" that might be used.

One note of special significance is the impact of referrals on your bottom line. Working your current customers to gain new business opportunities is the best use of your marketing dollars possible. Such an effort literally costs nothing! What this means to you is increased profits as you have little to no costs associated with landing the new business. Thus, you can afford to spend a little money on postage and even giving away a few free ball tickets.

Realize that you'll need to use more than one of the suggestions listed earlier. Be creative in your offerings but more than anything else I can suggest, get into the habit of asking for referrals every time you close out a job. Be proud of your company, your workers, and your production results. Good luck!

Brad Humphrey is President of Pinnacle Development Group and Co-Founder of GangBox, Inc. Brad has been involved with the construction industry as an employee, an owner, and now consults with contractors of different sizes across the United States, Canada, and Australia. For more information about Brad's firm please go to www.pinnacledg.com or for CD info go to www.gangboxinc.com.

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