Bribe is such a harsh word.
Let’s change the word to active and passive referrals.
Research has shown that the majority of customers who have a problem with their HVAC, plumbing, electrical, etc. systems first ask for referrals from family, friends, neighbors, co-workers, or someone they know.
Or they have seen your truck in a neighbor’s driveway, heard an ad, got a marketing piece in the mail, etc. and go to your website. Most DON’T start with a Google search. Or, if they do, they are searching for something that looks familiar.
A new customer who gets recommendations from friends and calls your company on their recommendation is a passive referral. No one in your company solicited the referral. It came because of a great job you did for a customer and they referred without prompting. Obviously, these types of referrals prove that you did a great job and the customer was happy enough to mention your company when a friend asked.
Active referrals occur are when you ask customers to provide them. Many contractors are doing it through social media reviews: “If you liked our service, please give us a review on Google, Yelp, etc.” Many software packages have been written to make it easy for a customer to click on a link and write a review.
Social media reviews are becoming more important every day. The more positive reviews you have, the better your company appears to people who are searching on line. However, if you have 1000 five-star reviews and no four or even a one-star review, then the reviews are suspect. No company is perfect. We are human. There is someone who was not happy!
However, most people, if they ask their friends, would prefer a personal recommendation. They may get that recommendation and then search on line for the reviews to validate the recommendation. However, getting a positive, raving review from a friend makes them most comfortable calling your company.
Active referrals can be bribes. They are not necessarily bad. By paying for referrals, some customers become de facto sales people for your company by soliciting their friends so they can get paid for the referral. You let customers know that when a friend refers a new customer they get $X.
Or, you put a statement on the bottom of your invoices that says, “We grow our company through referrals from family and friends. If we did a great job, please let them know. If we didn’t, please let us know.” That is asking for referrals.
Or, you put an article about a happy customer in your newsletter with a similar statement asking for referrals. This is also asking for referrals. Neither statement hints at payment for the referral.
Of course, you can send the referring customer a gift card, a thank you note, flowers, etc. You can also make a donation to a local charity in their name. That is paying for referrals without mentioning payment.
Referrals are the best way to grow your business. Passive ones are great. Active ones are necessary. Decide whether you will mention payment for those referrals when you ask for them. The choice is yours.
Today’s Marketing Minute is brought to you by Dale Sparks, Upstate Comfort Systems.
Content credit: This article first appeared in the newsletter Contractor Cents on January 10, 2022, by Ruth King of HVACChannel.tv.