In a down economy, HVAC contractors can never have enough effective strategies to generate more qualified sales leads. Continuing our focus on this critical part of your business, I’m going to share with you the “referral secret” that all contractors should be aware of.
Remember the “Referral Secret”
Customers Want to Give You Referrals. That’s right, your customers want to tell others about you. They want to help their friends and offer up a great local company so they can be the “heroes” and have their friends and family love them for it. So use this to your advantage and give your customers every reason to talk about you.
To get more of your customers to talk about you, it’s important to understand the two types of referral activities that you should use. Type 1 is organic referrals. Organic referrals are those that come to you because you’ve done such a fabulous job for a customer that they are telling everyone about it. Type 2 is paid referrals. Paid referrals are those that are given because you’ve done a good job (you still need to delight the customer) and because you have incented the customer to give you names of prospects. You need both referral types to succeed.
Organic Referrals – Build a Network of Promoters
Ideally, your mission is to cultivate “promoters” of your business. Promoters are customers who feel so strongly about your company that they freely recommend you and discuss how exceptional you are. According to the best-selling business book, “The Ultimate Question,” by Fred Reichheld, over 80% of your referrals will come from promoters, and these customers are usually less price sensitive because they believe they’re getting superior value from your company. The influence of the promoter is growing, as the average promoter will now reach friends and neighbors, and, increasingly, will share their experiences online.
The best way to determine if your customers are promoters is to ask them yourself. For now, you should start with some self-evaluation. Ask yourself, “On a scale of 1 to 10, how likely are my customers to refer my company to friends and family?” Once you have a general idea of this, you need to ask, “How many of my customers are promoters?”
I could write numerous articles on the things you can focus on to gain more promoters, but if you focus on exceeding customers’ expectations and delivering what may be perceived as ordinary service in an extraordinary way, then you will inevitably increase promoters and boost referrals.
Paid Referrals – Develop an Effective Paid Referral Program
For some customers, the fact that you did a great job for them is not enough to get them to promote you. That’s why it’s important to have an effective program that incents your customers to refer friends, family, neighbors, etc. Customer attitudes and expectations have changed in this area (as in many others), and so a $25 discount on service just doesn’t cut it anymore. One way you can improve your paid referral program is to make the gift/incentive more significant and personal.
Consider giving your customer their choice of gift. Send them an email with a list of options after the referral has been sold. Or better yet, use an online landing page that’s part of your website where customers can choose a more personal gift. For example, offer gift cards from companies like iTunes, Barnes & Noble and American Express. This makes it more fun for the customer and ensures they’ll get a gift they like. And it makes them much more willing to keep referring people.
In closing, keep in mind the words of Andy Taylor, CEO of Enterprise Rent-a-Car, who says, “The only way to grow a business is to get customers to come back for more and tell their friends.” It’s applicable for the rental car industry, and it’s certainly applicable in ours.
Blaine Fox, Vice President of Warm Thoughts Communications, is a recognized expert on the residential mechanical services industry. He is currently working with some of the nation’s leading HVAC contractors to improve their marketing, fine-tune their operations and grow bottom-line profits. Previously, Blaine was general manager of ServiceMark, a $32 million HVAC contractor with more than 25,000 service agreement customers. Blaine oversaw 160 field employees, 30 install crews, 12 sales people and a call center that handled 140,000 calls per year. Blaine is a sought-after speaker, and presented at Comfortech 2009. He is also a frequent contributor to HVAC industry trade publications. He can be reached at [email protected]