Not just referrals — a referral ‘engine’

Oct. 3, 2013
All contractors love to get good referrals. Many contractors say that the majority of their business comes from referrals.

PHILADELPHIA — All contractors love to get good referrals. Many contractors say that the majority of their business comes from referrals. There is a way, however, to do more than just letting referrals happen by luck and John Jantsch taught members of the Service Round Table how to get them.

Jantsch spoke at the SRT’s Service Nation Alliance meeting that preceded the Comfortech conference and show here in mid-September. Jantsch is a consultant, author and speaker who has written the books Duct Tape Marketing, The Commitment Engine and The Referral Engine. He is the creator of the Duct Tape Marketing System and Duct Tape Marketing Consulting Network that trains and licenses small business marketing consultants around the world.

Jantsch told the contractors that they can’t short-circuit the process and tell the customer to tell their friends and family to buy from them. It’s more complicated than that and its takes longer, especially since not all customers are ideal and not all of them are capable of making an ideal referral. People buy from other people whom they know, like and trust. The knowing, liking and trusting take some time.

Contractors — indeed all small business owners — are wont to say, “If I had more customers like that …” Well, you probably do, so how would you describe them? What are their characteristics? If you have a basic idea what you are looking for, you can train your service techs and salespeople to look out for them.

Jantsch emphasized that contractors need to create a referral program. Have a method of keeping referrals top-of-mind with your service techs. Measure what motivates customers. Figure out what doesn’t work. Make your referrers a club, a social act. You can even create competition amongst the referrers to see who refers more.

What is your unique difference, Jantsch asked the SRT members, and, more importantly what do your customers think it is? Define the common characteristics of your most profitable customers and, it’s even better if some of your most profitable customers are also your best referrers. The characteristics might be geographical, or the type of project, or the type of home.

Find six or eight or 10 of your best referrers and interview them face-to-face. It can’t be done over the phone or with a questionnaire, Jantsch said. Ask them open-ended questions. Why do you stay with us? What do we do that others don’t? Why do you refer us? When you refer us, what do you say? What are other businesses that you refer and what makes them best-in-class?

Jantsch told the SRT contractors that they need to get a good sense of what it is that they’re doing that sets them apart, and it likely is the little things, such as not letting the dog out of the gate or putting down floor protection. Contractors have to meet the customers’ emotional needs that go beyond the logical needs of doing a competent job.

Once you know who your best referrers are and they have told you why they refer you, Jantsch said you should train them. That’s right, train your customers. Teach them to listen for “trigger statements” from friends, neighbors, family or people they might meet at a social event. Trigger statements might be curiosity about whole home comfort solutions or complaints about allergies, running out of hot water or rooms being too hot or too cold. Teach referrers to pay attention to statements like that.

Create incentives for top referrers that are tied to your business, Jantsch told the SRT members, stressing that an iPad giveaway is in no way connected to your business. As an example of a good incentive, Jantsch said that a remodeling contractor offered as a prize to his top referrer the use of a carpenter for an entire day to do any kind of work around the house. Jantsch suggested that the SRT members offer some kind of service or a product upgrade.

Get your referrers to agree to let you use their name in promotions in their neighborhood. Jantsch said this agreement should be a natural part of the deal, a part of the selling process. For example, you could buy the names of 100 neighbors surrounding your customer and send letters to all of them describing the work you’ve recently completed. Instagram has a tool called Postagram that allows you to send a picture of the completed project that looks like a postcard for a cost of 99 cents each.

Jantsch noted that old standbys, such as hang-tags and gift certificates still work.

The Comfortech event, of which the Service Round Table and Service Nation Alliance meetings were part, is owned and managed by Penton’s Mechanical Systems Group, which includes CONTRACTOR and Contracting Business magazines. Comfortech celebrated its 18th year in 2013 and will return to Nashville in 2014, the site of several successful Comfortech shows.

About the Author

Robert P. Mader

Bob Mader is the Editorial Director for Penton's mechanical systems brands, including CONTRACTOR magazine, Contracting Business and HPAC Engineering, all of which are part of Penton’s Energy and Buildings Group. He has been  with CONTRACTOR since 1984 and with Penton since 2001. His passions are helping contractors improve their businesses, saving energy and the issue of safeguarding our drinking water. He is a graduate of the University of Notre Dame with an A.B. in American Studies with a Communications Concentration.

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