Contractor's Corner: Making the most of client referrals - Aug/Sep 18

By Dave Stafford

Wouldn’t it be wonderful if you didn’t have to spend so much time and ad dollars to generate new business? Prospecting, cold calling and knocking on doors is expensive. The answer may be simple and easier than you might imagine-ask for referrals, testimonials and references from your own satisfied clients.

“Ask and you shall receive” is true for selling a job as well as an all-important referral. It is rare that anyone does such an outstanding job that the client says, “If you ever need a referral, just let me know.” The reality is that most clients expect superb service and take it for granted, believing that it is standard practice. It is up to you to ask for their referral to others, a testimonial or to act as a reference.

Just as an actor must learn his lines, your sales team must learn how to ask for these all-important nuggets. Develop a script or set of prepared talking points. Outline three or four scenarios and the specific words of what to say to the client in each one. Require practice as part of a sales meeting. I have found that getting valid referrals from sales personnel is like pulling teeth unless it becomes a part of the sales process and training is done regularly. It would also be helpful to provide some monetary reward for each referral–each salesperson should have a tangible referral target percentage, say 50% of sales.

The reality is that not everyone will be happy with your job, perhaps through no fault of your own. Others will not provide referrals, references or testimonials as a matter of their own company policy. Some say they will provide it when asked but do not follow through. Set a referral procedure and make it as painless as possible for all.

You cannot get great referrals by being seen as a pest. Ask, follow up once or twice, and if they say they will send along something, drop it. In one experience, I followed up one too many times and was told, “Hey, it’s not my responsibility to promote your business. You did okay for me, and I paid the bill. That should be enough for you.”

FOLLOW UP IMMEDIATELY
You should always ask for referrals immediately following the successful conclusion of a project. There is no better time than when the sweet glow of satisfaction looms, and the client has said he’s pleased with the on-time delivery and your overall performance. The good and the bad tend to fade over time. Those reluctant to provide a referral may be quite willing to be quoted in a testimonial that provides high praise for your work. Asking by mail is too easily ignored, especially when you’re asking the client to fill out a form. Asking by phone works; however, asking in person is excellent.

When you speak with them, get the gist of their satisfaction and offer to put a draft letter together for them. They can modify the draft, print it on their letterhead and send it to you. This can all be done by email and a good technique is to ask if their letter, or at least an excerpt of their comments, may be placed on your website under “Testimonials” or “References.” Ask if their name and title may be used; however, a few may say, “Use the company name only under the excerpted comments. Otherwise, I have to get legal approval.” That is the easiest and most effective way to get something immediately.

When writing up a referral letter draft, you should reference the specific project, such as: “Toxicology Associates Renovation, Baker Management, April 2018.” Your client will decide if that’s too much information, and if doing an excerpt, you can always edit it out. Have them send you an email as confirmation and note the date and time of the conversation for your files.

When asking for and using a referral, something as simple as, “Jerry, you’ve just said that we did a great job for you; I know you have a lot of contacts in property management. Will you refer us to a couple of your associates?” will work just fine. Be sure to write down their names. “Thanks, Jerry. I’ll contact them; may I mention your name when I give them a call?” If the answer is no, then find out why.

You may want to ask Jerry if he’d be willing take a phone call on your behalf. “Mr. Palmer, I just finished a job with Jerry at Baker Management. He was quite pleased and would be happy to take a phone call. Shall I give him a call and let him tell you about his experience with us?” That is quite effective if you know Jerry will take the call and be complimentary. Or you may give him Jerry’s phone number, but there is no assurance that he will ever make the call.

If Jerry is really hot to do you a favor and you are at a critical closing stage with a new client, you might call your client and ask Jerry to talk with him directly. “Hey Bob, I know you’re considering us for the Tacoma project. Since we just finished a similar job for Jerry, would you like to ask him some questions about our performance?”

MAKE SURE YOU KNOW THE DIFFERENCE
A referral, testimonial or reference list are all different. Be careful that you don’t use them interchangeably. Client referrals are the most valuable, since they may be precisely targeted toward one person, several acquaintances or a specific company. Do not use a referral as a reference without specific permission. The right referral may result in a sale this month!

Testimonials usually refer to a specific project by name or body of similar work over some time period. Testimonials are valuable in that real people are attesting to your integrity and competence on the website or within company literature.

A reference list may be made up of those who have agreed to take a phone call or an email asking about your specific performance on their project. This may be a list of specific questions about your project management, site personnel, general conduct, delivery, inspection and project closeout or problem solving. This may be formal or informal. Choose references wisely, keep the list fresh and regularly check in with the client to make sure all is well.

If you were given a referral, time is of the essence in contacting the person or company promptly. Show that it is important to you. The danger in waiting several weeks is you will be embarrassed if the referral calls Jerry, and he absolutely doesn’t remember you. “Oh, yeah, now I remember, I believe they did a pretty good job, but I don’t remember the details” doesn’t set the tone you were hoping for, does it? A good technique would be to call the referral, briefly mention you were referred by Jerry and ask for an appointment.

Confirm the appointment, but before you go, do some quality research on the target company; send along some introductory info about your company in advance if appropriate. Show up armed with your research and answers to likely questions. What you are selling on the initial visit is you, your company and the ability to consistently solve problems and deliver value. Briefly highlight how you’ve handled challenges, provided solutions or cost savings to Jerry or for a company similar to that of your referral.

Organizing, updating and maintaining your referral, testimonial or reference list is critical and should be done using company-directed procedures. After all, this is a company asset even though many are unique to a specific salesperson or project manager.

TIPS TO CONSIDER
Referrals may often be specific to a certain individual within your company and should be used by him. In rare cases, with his agreement, the follow-up might be done by another team member. Referrals are most effective if used quickly; they have a limited shelf life. Remember the phrase: “Use it or lose it.”

Testimonials can help you make a sale when credibility and value are an issue. You must keep up the flow of fresh testimonials. This list should be updated weekly, internally and on the website at least monthly. If you were looking at a website, how much value would you assign to glowing critiques that were several years old? Not much, I’ll bet. What you need is a mix of testimonials that are within the last month, last quarter, last year as well as several years ago; this corresponds to recent activity and historical competence. Make sure they vary according to type of project to demonstrate the range of your commercial expertise, if you have a choice. A retail residential reference won’t do much for you with a commercial buyer; however, the reverse may be true.

Reference lists are quite important, since many commercial projects require them to demonstrate capabilities. References must be cultivated and maintained. There ought to be an internal company checklist showing the last contact or job performed and feedback for each company reference. I would never use a reference without calling my client contact in advance. A request for references should be managed within the sales coordination function, making sure there is proper rotation of references. I once heard the complaint, “Take me off your reference list, please! I got two phone calls and a letter last week. Don’t you have anyone else who will recommend you?” I certainly had a red face on that one.

THE BOTTOM LINE
Referrals, testimonials and references are company assets that reduce your sales costs by eliminating unproductive and expensive prospecting. Yes, you have to manage the process and it does take additional effort and maintenance. However, it works. There are successful flooring companies that work only through referrals and depend on repeat customers for growth. They use much of their advertising budget for training seminars, product introductions or for cultivating good will. Make a concerted effort and you’ll see your sales increase and profits skyrocket.

Copyright 2018 Floor Focus

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