Last we spoke about warm and cold leads and how not all leads are created equally.
We are going to exsplore the power of referrals and the benefit of having more warm leads. We will also discuss a few ways to go about asking for referrals.
Let’s start our discussion with a simple question, “Why are referrals powerful?” Referrals are powerful because they are warm introductions of you (or your company) that build upon relationships between people you know and people you don’t know. Those relationships are built upon trust and building trust takes time. Referrals allow you to piggyback on the established trust between an existing client and a potential client and shorten the trust building process (in this case the sales process) to get in front of a prospective client sooner. However, this requires your current client to “risk” some of his/her/their accumulated trust on your behalf so you have to earn each referral.
How do you earn referrals?
Earning referrals is simple in theory but not easy in practice. The best way to earn referrals is to do an exceptional job of building and maintaining relationships with your current customers. You see where I’m heading with this, don’t you? The Construction Industry is competitive, experiences very short sales cycles, and has low rates of homeowners purchasing contractor services twice in quick succession. Who has time and resources to dedicate to building relationships without the promise of future work?
There are entire books written on building and maintaining relationships and I won’t delve into the various approaches here. However, I will stress the importance of four ideas:
- The faster you return a phone call and provide a quote the better chance you have of landing the client.
- The more you can do to guide the client through the process the more you will look like an expert.
- Deliver on everything you promise.
- Follow up.
If you respond quickly, educate the client, deliver everything you promise, and follow up you should have little trouble getting referrals from homeowners or contractors.
When do you ask for referrals?
It turns out that determining when to ask for referrals is often as important as knowing how to ask for referrals. Knowing how to ask for referrals is quite often subjective and dependent upon your experience building/maintaining a relationship with your client. We have included some outside resources below that discuss how to ask for referrals. Determining when to ask for referrals requires looking at the science behind why people make referrals.
Ron Shevlin wrote a great piece called Why People Refer for The Financial Brand that discusses how single and cumulative experiences can take people over the “referral threshold”. Expanding upon this idea it makes sense to ask for referrals after a great consultation experience (single experience) or after the customer has had a few months to enjoy his or her completed project (cumulative experience). In the later instance, it’s easy to include the request for referral in a project followup email.
It’s worth noting that the type of referral you ask for, and will get, after a single experience may be different that the type of referral you ask for after a cumulative experience. It’s also worth noting that who you ask for a single experience referral may differ from who you ask for a cumulative experience referral. On the one hand, homeowners looking for a small renovation or addition may be excited to get started and know other homeowners looking into similar work – thus making them more open to giving single experience recommendations. On the other hand, contractors looking for reliable subcontractors may be more interested in working with you several times before giving a cumulative experience recommendation.
Share your best practices for getting referrals with other construction professionals in our member forums and stay tuned next week when we talk about the importance of building a network to share leads! As always, good luck out there!
What do you think? Join the conversation Comment below or on our forum.