Tag: Referral

By Referral Only

A popular theme these days in the business world is saying that you are a “by referral only” business or that you concentrate on “word of mouth” marketing. Now what does by referral only actually mean? There are a few different schools of thought.

Some believe it is a status in business to achieve. It provides a feeling of exclusivity and doing any sort of marketing would be seen as tainting this “club” of sorts. Members of this club focus most of their attention on going to networking meetings with the goal of building a power circle that will refer to them on a regular basis. In order to make a strategy like this successful, one must constantly be in front of those with the power to refer. Referrals in this strategy can ebb and flow depending upon the whims of whichever networking groups the business professional belongs to.

There are others that believe the only way to achieve a by referral only business is to have a strategic marketing plan. These business professionals build relationships with past clients and referral partners through various marketing methods such as newsletters, e-zines, cards, letters, small gifts, and more. Through systematic means, they are able to obtain predictable and track able referral results.

Now, what about word of mouth marketing? It can be a great tool, but I caution you that on its own it is very dangerous. Why? Because of the telephone factor. What is the telephone factor? The telephone factor is the result of every game of telephone we ever played as a children.

You remember how someone would start with one phrase and by the time it made its way around the circle it came out completely different? Well, when one depends upon word of mouth advertising as their only marketing tool they are in a sense tempting the fates of the telephone game. Someone is bound to completely wreck your message. It is the nature of humanity.

But is word of mouth advertising completely useless? No, but it should be the by-product of your marketing and should be delivered in a carefully crafted message time after time so that the person trying to help you out knows exactly what to say about you. Otherwise it can do a great deal more harm than aid.

Those who believe word of mouth advertising and being by referral only are a realistic alternative to a well thought out marketing plan that is strategically implemented are losing out on a great deal of potential profits. Much like an ostrich sticking its head in the sand does not make it invisible, saying that you are by referral only does not make it so if you do not have a strategy to build those referrals.

How to Start a Profitable Home Improvement Referral Service

Home improvement referral services are cropping up from New York to California. They are taking the time to do the legwork to find reputable and reliable contractors and these businesses are reaping profits from good work.

It really doesn’t take much to start. A home improvement referral service business takes only a little money and not more time than a regular 40 hour a week job. They can actually start making money within the first year of business.

The first thing to consider is what types of home improvement businesses your will refer. This can include gutter cleaning and replacement, remodeling, building additions, fencing, lawn maintenance, and many others. Remember, all though you may like to paint a client may not like it or have the time. Therefore, no business should be overlooked.

Once you have an idea of the types of contractors for your referral service business, you will need to call the local, county, and state government offices. Get the regulations and requirements regarding licensing, bonding, business registry, and insurance for each type of contractor. This is the first step to building your list. Any contractor that does not meet government regulations should not be on your referral list.

By knowing these requirements and using them, your home improvement referral business will gain credibility with your clients. They will know that if the contractor doesn’t meet these requirements, they will not be on your list. It makes the client feel more sure the job will be completed professionally and correctly.

Another way to ensure creditability of your referral service business is to only look at contractors that are recommended by their past happy customers. But this is not the end of the screening process. Recommendations are not enough.

Once a contractor is recommended to your home improvement referral business, you need to check out his or her service. Talk to them, explaining your referral service business. Many contractors will give you the needed information happily. Ask to see their licenses, bonding information, and insurance to ensure they are current and up to date. Ask for a list of services they provide and the cost for these services. Finally ask for references you may speak to.

Now you have gotten your contractor referral list started. While working on creating this list, you should have started thinking about a name for your referral service business, advertising, office area, office equipment, and ordered a phone line for the business. You may want to use a computer right away, but an index card or file system could work just as well and for a fraction of the cost, until your company grows. Keep in mind that as your company grows, the office space, office equipment, and referral list system will probably need to become computerized to save time and money.

Since your referral business is going to begin locally, check with local newspapers and periodicals to see if they would be interested in doing an article about your business. Make some flyers and ask local hardware stores if you could leave some there to advertise your service. You may also want to send letters to realtors announcing your business, they can be great advertisers for you.

Make your services free to the people calling into your business looking for referrals. Many home improvement referral businesses charge the contractor anywhere from 6% to 15% depending on the size of the project. You put the customers in touch with the contractor, and upon completion of the project, the contractor pays you a fee.

Advertise that no contractors pay you to get onto your referral list. If clients or contractors ask how they get on the list, explain to them the only way for a contractor to get on the list is for a customer to recommend them. You may want to explain the whole screening process to let the person know the exact qualifications the contractors need to have before being accepted.

A referral service business can expand easily and rapidly. Once your business starts to grow, create a business plan to set goals. Decide how much you want to expand and consider starting franchises in other locations or expanding the list to include contractors that were not included originally. This is your home improvement referral service business and you can take it wherever you want.

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