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There’s a theory in the industry that most customer bases grow strictly by referrals. It’s usually not true, says Jeffrey Scott, author of “The Leader’s Edge” and “The Referral Advantage.” Not understanding where one’s customer base comes from is just one of several mistakes contractors make when it comes to actually creating a stream of referrals. Scott spoke at CENTS 2011 and the OSU Nursery Short Course, giving attendees seven tips to build customer referrals.
1. MEASURE CUSTOMER DATA.
Do you know where the majority of your customers are coming from? “When you go to collect data, you’ll be surprised where your business is coming from,” Scott says. One of Scott’s clients was sure his company was growing from referrals. When he measured the data, referrals were third on the list. Scott recommends going back two years to determine customer data. “Once you do that, then you can put in a kick-butt marketing plan.”
2. IF YOU CONFUSE, YOU LOSE.
It’s important that customers and the public know exactly what services you offer. That could mean making a more focused tagline or marketing plan, Scott says. For example, The Silent Gardener, a Vancouver, British Columbia, Canada company has the tagline “Working towards a quieter, more livable city.” Understand what drives the business and put that into a succinct message. “If people can’t describe you succinctly, they can’t refer you succinctly,” he says.
3. MAKE NETWORKING COUNT.
Don’t waste time networking in places where you can’t grow your business. That place might be different for each company. Perhaps it’s the local chamber of commerce or the local rotary. “Follow the 80 percent rule,” Scott says. “Focus your networking where 80 percent of the people in the room could be your clients, or your potential clients or they’re influencers.”
4. CREATE A CONNECTION.
Yes, winning awards says something about a company and it can help boost a brand and credibility. But to build a business by customer referrals, a business needs an emotional connection with customers and potential customers. Scott says successful businesses replace the word “me” with “we.” “Associations teach you to win awards and promote it,” Scott says. “There’s a problem. You’re not going to build emotional bonds with your community by talking about yourself. Build a reputation for giving back to the community. Scott’s sister-in-law had breast cancer, so to show support for the cause, his family’s business put a big pink ribbon on all of its trucks.
5. COMMUNICATE WHAT YOU DO.
A business might give back to the community, it might win lots of awards, but without communicating that information, who would know? “You can’t just do good work and expect to get referrals,” Scott says. He recommends telling customers, the media and associations before and after the company takes on an event. Perhaps even think about involving customers in a community project. “Let them know before things are happening and ask if they want to get involved,” Scott says. “I hate to say it, but just being a good guy isn’t enough.”
6. OUT OF SITE, OUT OF MIND.
Research shows companies should be in front of customers at least monthly, whether phone calls, newsletters or direct mail. Scott says he knows one business owner who sends cards for every occasion – holidays, birthdays, sometimes just to say thank you. There are companies and people who know businesses are doing good work, but those businesses need to constantly remind them and stay fresh in their memory, he says. “Your ability to have a (customer) list and manage your list is what’s going to drive your referral marketing success.”
7. DON’T WAIT FOR THE PHONE TO RING.
Sitting around and waiting is going to do little for your business. “The biggest problem I see is people are waiting for the phone to ring, they’re waiting for the referrals,” Scott says. “You shouldn’t be waiting for your next referral, you should be out planting the seeds, planting the seeds for referrals.” Maybe that means hosting a talk for commercial customers and potential customers on how businesses can deal with risks associated to snow. Or after finishing a job for a residential client, ask them to host a party on the company dime and have them invite their friends to see their new yard. “The magic mix is when you create these events and you bring clients and potential clients together,” Scott says.
The author is an associate editor at Lawn & Landscape. She can be reached at clawell@gie.net.
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