Thinking of offering a referral bonus

[Zach76]

Hey guys, This year is the first year that I've really decided to focus on growing my company. I'm thinking of offering some kind of referral bonus to my existing clients, but am unsure of how to go about it. Should I offer a % off for a 1 yr agreement, one free moing/fertilization, bed cleanup, or maybe a fixed dollar amount off of one month's bill? Also, what's the best way to ask for these referrals? Note with 1st monthly bill? Separate letter at the beginning of the year? Just at beginning of season, or once early and once halfway through? Finally has anyone found a good way to track which customers have what coming to them? Should I just track it on my own, or give them a coupon to send in with their monthly bill to represent a portion of the total due? Any help you can offer will be appreciated. Thanks.

[Scraper]

I have offered up to $100 service credit depending on size of referred account.

[mtdman]

When I first started, I offered a $20 credit for each regular account I got due to a referral. Regular meant signing up for the season. My frist attempt at referrals I got a couple customers who had neighbors/friends call for a mow, and then wanted the referral fee. I had to refine my terms a bit.

:D

[Zach76]

That makes sense. I definitely don't want to give away the same amount that I get from the new customer. I'll definitely have the new client sign an annual agreement before I give a bonus. Thanks.

[LawnPerfect]

I just toss a little labor their way. Such as one customer that landed me another client, I was about to do a fall clean-up for her so I spent 10 minutes on her roof, blowing it off and blowing her gutters clean. It cost me 10 minutes of my time, very little wear and tear on my equiptment, and just pennies in gas and oil. The new customer is worth about $1,500.00 a year.

[sgallaher]

I offer a $30 credit to an exsiting customer that refers a new customer that signs a contract for the season. In my letter to my current customers I explain to them that the credit will be added to their last invoice for the season. I just started this this year so I'll have to see how well it works.

[Kelly's Landscaping]

For new lawn accounts we gave the customer who referred us a credit of the price of one lawn cut of the new account. I.e. I cut your lawn for 40 dollars you give me a friend that’s only a 20 dollar a cut I give you a credit of 20 dollars on the other hand you give me a 100 dollar lawn account and now you have a 100 dollar credit I ended this of course when august came but it did add around 20 accounts to my list so I would recommend it. Think what you pay per customer when you advertise it can be very cost effective. If you spent 500 dollars on advertising and got 10 accounts then it cost you 50 per account so I figure your already spending that much if not more.

[GarPA]

I use different rewards...if its a sizeable landscape job, a $100 off their next bill is average. Year long mowing contract about the same. Sometimes I'll give them a gift certificate to the nicest restaurant in town.(Dinner for 2 $75)

I do not give any details on what the referral reward will be .
In each quarterly newletter I remind them of the referral rewards...but with no dollar amounts.
Wedont get allot of new business from referrals. Most of our new business comes from businesses/homeowners coming over to talk with us while we're on an adjacent property...or calling us from getting the phone # off the vehicles

[Team Gopher]

Hi Zach,

Here is a quote that is interesting from this post (http://server2.lawnsite.com/showthread.php?s=&threadid=49241).

"I just sent out a letter asking for referrals, the headline was like "have you heard?" and has a gif of an ear.

The I just gave a little update on what's been going on, and then asked to tell their friends and co-workers.

I got 19 new customers out of this. I didn't give anything away or ask for to much.

People will brag about people who do good things for them. On the flip side they will do the same for people who do bad things.

Good post, I saved it.

P.S. I will make sure I add this, a referral is like almost a closed sale, so don't mess them up. Most cases you have them on the hook before you even talked to them. I will close 90%+ of referrals."

[Zach76]

GarPa, I like the gift certificate idea. A good dinner for free may be remembered long after a free cut or a discount on services they're getting anyway. Hope you don't mind if I use that one.

[GarPA]

Zach...use it...thats what we're all here for...to give and get ideas.
Good point you make about a nice dinner being remembered long after a "credit" is given on their invoice....hadn't really thought about it that way...but you're right

[scott's turf]

We have a service agreement but the customer is entitled to cancel service with a weeks notice at any time. Therefor I have decided to create a referral program that will take 5% off each cut of the referee as long as the referal stays with us. For every new customer they would get an additional 5%.

[ProMo]

I will be offering a free flat of annuals for referals this year

[DJL]

Scott's Turf,

I hope their is a limit to the amount of discounts. Does that mean that if your customer got you 10 accounts they get 50% off of their service? Just curious....

[satxmow]

I OFFER A REFFERAL INCENTIVE BUT ADVICE ONLY ONE DISCOUNT CAN BE USED PER SERVICE DATE.:nono:

[scott's turf]

Originally posted by DJL
Scott's Turf,

I hope their is a limit to the amount of discounts. Does that mean that if your customer got you 10 accounts they get 50% off of their service? Just curious....


I don't see why not. If I got 10 customers from them it would be worth there lawn being 50% off.

[turkp15]

How long do they get the 50% off for. I think you should tell your customers that its only good for the that years contract.

Jeff T.

[scott's turf]

Originally posted by turkp15
How long do they get the 50% off for. I think you should tell your customers that its only good for the that years contract.

Jeff T.

I agree totally that I would be putting in a bold print statement that the discount was only for one season.

[bobbygedd]

i was just thinking of this yesterday. in 2003 we offered a "referel bonus" . i thought this would be a great way to group clients, and get a higher percentage of the estimates i did, i offered it to exsisting clients, as well as potential clients at the time of estimating thier maintenence package. i offered $20 cash for each refered client that signed a seasonal agreement. do u know what i got? NOTHING! not even one referel from this offer. i couldn't understand why. i've had referels in the past, and picked up neighbors based on the nice work we do, but when i offered $20 per referel, i ended up with zero.

[WeatherMan]

We do a $30 dollar Credit for every referel they bring us that signs up for 1 year contract. I also do yearly contest in my monthly newsletter to the person that brings me the most referels I give them and their spouse or other half a nite out with a dinner at cincinnati's only 5 star resturant. It Cost me: The gift card is in the amount of $150.00 pus the $30.00 Credit for each referel. This year I had 2 customers going up against each other the winner had 32 referels that signed a contract and second place winner had 28 referals, so I gave them a gift card to applebees for $50.00. All This is a small price to pay for over a 100 referals that sign a year contract the season. I just looked up how much I spent on referel bonus this season the total came to $3500.00 thats a low advertising budget.

[LawnsRUsInc.]

how do you guys word your refferal letter? Iam trying to come up with a good isea to comfort the customer but also save my a$$!

Thanks Jason

[Lux Lawn]

Weatherman

That is awesome 100 referrals in one season.That is a great program you got going.

This is my first year with a referral program.

$20 credit for new customer that agrees to season lawn maintenance