Strategies for Generating More Referrals

The Value of Referrals

There are many different strategies for refinishers to gain new clients. Advertising through direct mail or pay-per-click can be very productive. Cold calling is another path for refinishers who are seeking commercial clients in hotels, apartment complexes, and dormitories. A good website with some SEO to attract traffic is a good strategy. Joining business associations and networking groups through champers and industry associations has been highly productive for some refinisher businesses. However, none of these activities is as efficient or cost-effective as getting referrals. Referrals are the all-time champ of business development.

Experience has shown many refinishers that the single greatest engine to grow your refinishing business is a steady stream of referrals from satisfied clients and trusted partners. Not only do referrals cost less than the money you would otherwise spend on marketing, but they also close more quickly and more easily than leads from other sources. Every refinishing business owner loves to receive referrals. Some refinishing businesses do not cold call or door knock because they get so much of their business from referrals.

Statistics bear out the truth of these statements:

• • It takes seven times as much effort to win a new customer from cold prospecting than it does to win one from just one referral.
• • When considering a purchase, 84% of buyers trust recommendations from families, friends, and colleagues.
• • Customers who were referred by a friend or other customer have a 16% higher lifetime value.
• • The average referring customer invites an average of 2.7 people.
• • In the home improvement industry, studies have found that the close rate from referrals can be as high as 80%.

Some business owners have recognized that the ROI on time spent with clients who are a source of referrals is much higher than time spent with clients who do not refer.

While many businesses earn a significant portion of their revenue from referrals. It is also true that most businesses do not ask for referrals or systematically develop them. They are happy to receive referrals, but they are reluctant to ask for them. In this blog post, we will discuss the value of referrals, the obstacles to getting referrals, and the effective strategies to develop them.

The Obstacles to Asking for Referrals

Considering the great value and productivity of referrals, it is somewhat surprising that many refinishing business owners do not ask for them. During a recent informal survey of refinishing business owners, we found that less than half of them were actively asking for and cultivating referrals.

When we asked about the obstacles and challenges to asking for referrals, they shared several challenges or obstacles to doing so. They:

• • Uncomfortable asking for referrals
• • Don’t know when to ask
• • Don’t know what to ask for
• • Don’t know how to ask
• • Don’t know who to ask

Below we will discuss each of these objections and why they should not hinder your referral generation efforts.

Uncomfortable asking for referrals. This objection is by far the most common obstacle. This discomfort comes from several beliefs that are untrue and unhelpful. The first unhelpful belief is the fear of hearing “NO”. The salesperson may have convinced themselves that the customer might not think that they deserve a referral, or the quality of their work does not warrant one. Some refinishers think they will sound “needy” if they ask or that they are being pushy and rude.

These objections live in the head of the refinisher who is reluctant to ask and typically depends upon the “mind-reading” skills of the refinisher. You cannot read the mind of the customer. Most customers are very happy to give referrals when you do a good job. They will even brag about the work you did and your professionalism.

Banish these mind-reading stories that you are telling yourself. They are not true. Smile. Be proud and confident that you deserve referrals, and you can ask for them in the most professional way. The very best professionals ask for and get referrals all the time — so can you.

Don’t know when to ask. There are two great times to ask. The first time is when the customer sees the final project for the first time. They will be thrilled with how their new bathroom looks. The second great time to ask is when you are hired. When you are hired, you ask if they are open to giving referrals when the project is completed, and if they are thrilled with the project. Besides these two times, all the other times you can think of are also good. Just ask.

Don’t know what to ask for. Your first request is always for a warm referral. You are asking for an introduction to the person you are referred to. This can be an email a phone call or a handwritten note. The note simply warmly introduces you to the referral, speaks positively about your work, and suggests that the two of you might talk. Ideally, you and the referral are both copied on the note/email.

Other softer versions of what to ask for include passing along your information in the form of a brochure, flyer, or business card. You can also send your customer an introduction email, which includes your contact information and links to the website. You can suggest that they forward this email to the people they want to introduce you to.

How to Ask for Referrals

This is not the biggest obstacle to asking for referrals, but once you have a well-developed approach to asking for referrals, several of the other challenges melt away. Here are several scenarios:

• • This discussion occurs at the beginning of the project, probably immediately after your client agrees to work with you.

“At the end of this project, my goal is that you are completely thrilled with how this refinishing project looks and how this new bathroom makes you feel. If we can do a wonderful job that makes you feel great, can we take a couple of minutes at the end and talk about one or two people you might know who would appreciate this kind of refinishing work? Is that OK? YES (They always say YES)

• • At the end of the project, you can ask again.

If you DID set the expectations at the start of the project, here’s how that conversation might go:

You: Now that you have seen the finished product, what do you think?

CLIENT: WONDERFUL, LOOKS GREAT.

I appreciate that. It was a pleasure to do this project. Thank you for this opportunity. Can I ask one more thing?

SURE.

At the beginning of the project, we discussed that if you were thrilled with the project maybe we could talk about one of two people you know who might appreciate this kind of refinishing work. Do you remember that?

YES.

Well, I want to know if we did a good enough job to have that conversation.

YES, ABSOLUTELY. IN FACT, I HAVE BEEN THINKING ABOUT A COUPLE OF PEOPLE TO INTRODUCE YOU TO.

Wonderful. Do you have time to sit down and discuss that now?

YES

If you DID NOT set the expectations at the start of the project:

Now that you have seen the finished product what do you think?

WONDERFUL, LOOKS GREAT.

I appreciate that. It was a pleasure to do this project. Thank you for this opportunity. Can I ask one more thing?

SURE.

A big part of how I get new projects is recommendations from the wonderful folks I work with. Is it possible you know one or two people who might appreciate having their bath look like this? YES.

Would you be comfortable introducing me?

YES.

Thank you.

Here are some options for wrapping up the conversation and planning how they will get you in touch with the new prospect:

Option 1: Would you be comfortable giving them a call and explaining what we did with your bath?

Option 2: I can send you an introduction email. Would you be comfortable forwarding that email to them to introduce me?

Option 3: Would you be comfortable passing along my card/brochure?

Who to Ask: Your Best Referral Sources

There are many wonderful sources where you can get referrals for your refinishing business. The most obvious sources of referrals are your clients. This includes the homeowners where you may be doing a single bath or a tile floor. Additional sources also include commercial property managers, maintenance managers as well as commercial and residential realtors.

Homeowners are a terrific source of referrals because they take such great pride in their homes that they will often be eager to show off their new bathroom or tile floor to friends and relatives. They are very likely to give several referrals. They are also typically happy to make introductions.

Commercial property managers and maintenance managers can be good source of referrals for a couple of different reasons. First, they will often refer you to other property managers or maintenance managers within their same hotel brand. They are very friendly with the other managers in their chain.

The second reason you can get multiple referrals from these property managers is that they often move from one property to another and even from one brand to another. In this way, they get to know many managers at other properties in town. They often have a strong informal network where members refer good vendors to each other. Commercial managers are used to being asked for referrals, so your request will be expected, and they will generally be very cooperative.

Commercial and residential realtors can also be a source of referrals for different reasons. They generally have an excellent network in the community. They know many other professionals. One caveat: a residential realtor who likes your work may not refer you to another competing realtor. They can sometimes be a very competitive group.

Additional referral sources are other trades. As you build relationships with carpet cleaners carpenters, plumbers, and electricians they will periodically refer work to you. They will also expect that you return the favor. The expectation of reciprocity makes it a mutually beneficial arrangement.

As a refinisher who does great work and is highly professional, you can become very well-known in their local community. When you build this reputation, you may get referrals from people and facilities to which you have no known connection. Remember that the quality of your work and your professionalism will generate referrals for you when you're not even asking. This is a classic example of word-of-mouth advertising.

Your Referral Generation Strategies

When it is done correctly, generating referrals is not an event but a strategy that becomes an ongoing habit. You should build the referral conversation into your regular business rhythm. You will make sure you have that conversation in one form or another during each project you do.

Here are eight simple referral strategies you can employ.

• • Ask about the possibility of referrals before starting the work. This is not asking for referrals, rather this is asking, “If we do a great job are you open to talking about introductions to other people who may like our work?”
• • Ask for referrals during the during the final inspection and walk-through. This is when the client is happiest.
• • Use a referral request postcard. Share a postcard asking for referrals with your client. It is a card where they can write a name and a phone number.
• • Compensation for referrals. This is a strategy that is effective with residential and commercial realtors. They are very money-motivated, and this will get their attention.
• • The introduction email. This is a pre-written email that you send to your customer that they can forward to their contacts to warmly refer you,
• • Giving referrals. This is especially effective with other trades and partners. The quickest way to increase referrals is to give more referrals. It works like magic.
• • Use thank-you rewards. Give a small gift to each person who refers you to a project you win. This is not to thank them for the referral; rather it is an incentive for them to send you another one.
• • Start a contractor referral circle. Gather a team of four to five non-competing contractors to meet for breakfast monthly to share referrals.

The most important aspect of any referral strategy is simply to do it — and do it consistently. As you begin to receive projects from your referral program, track how many projects and how much business you receive from referrals. You will be amazed by how much money these programs will bring to you.