Referral Programs?

Discussion in 'Landscape Lighting' started by bmwsmity, Oct 2, 2007.

  1. bmwsmity

    bmwsmity LawnSite Senior Member
    Male, from Ohio
    Posts: 276

    Who uses a referral program for their customers? I mean a real one in writing that lets the customer know of any incentive they get for referring?

    Some people embrace the view that giving "incentives" for customers who provide referrals is possibly unethical, and that it skews the true motivation for a referral to be given.

    Some people embrace the view that customers should be duly rewarded for the gracious gesture of referring a customer.

    I've heard of some people giving percentage discounts on future purchases, giving credits for future purchases, giving flat fees, and giving percentages of the new customers total price.

    According to Seth Godin's book "Unleashing the Ideavirus", it's essential to reward those who promote your company, and it's essential to let them know before-hand exactly what they will receive for doing such.

    What has worked for you guys? How do you inform the customer of such a program? Do you send reminders of the program from time to time?

    Keep in mind this is only in regards to past customers, NOT other referral sources such as landscapers, irrigation companies, etc.

    I look forward to your input :drinkup:
     
  2. Chris J

    Chris J LawnSite Silver Member
    Posts: 2,830

    I have a program that I offer to new clients that I call my "PAL" program (Partnership for Additional Lighting). After I have completed a job for a customer, I will add one additional light to their account for each referral that they provide that turns into another account. Some folks have really latched on to this idea, and taken it to the max. I offered this program to a retired gentleman about 6 years ago in a subdivision that was just beginning development (homes starting at 750k). Initially, we only installed a front yard lighting system for him, and on his daily walks he would stop and talk to the new residents that were having their homes built around the neighborhood. Within a couple of years, he had referred me to probably 25-30 new clients and he received a very healthy backyard lighting system for free. When you think about it, it's like having a salesman working for you in that particular neighborhood. In this particular situation, this gentleman generated more than $150,000 in sales revenue for my company. I was more than happy to install the lighting system for him.
     
  3. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Posts: 4,102

    My business stand and grows on refferrals. That being said, I do not offer any organized or formal 'program' to my clients incenting them to refer my company. Those clients that deliver new business to me over and over again do get special consideration when it comes to service as I believe one good deed deserves another.

    I have a board of advisors for my business (made up of 5 of my best clients and each of them very talented business leaders in Canada) and 3 of the 5 of them all started out at Xerox (uncanny coincidence). Apparently the Xerox sales education program teaches you to come right out and ask for names and numbers of three people who would benefit from your service. It sounds like a hard sale technique and I was hesitant to try it at first. I have to admit it does work! It works on the premise that Mr. Jones would not waste the time of his friend Mr. Smith if he truly did not believe in your service. Similarly, Mr. Smith does not get upset when you call him, because he knows that Mr. Jones would never have provided his information to someone who was not offering an excellent service. This is a fantastic and powerful tool to build your network and refferral lists.

    Have a great day.
     
  4. bmwsmity

    bmwsmity LawnSite Senior Member
    Male, from Ohio
    Posts: 276

    Chris, I love that story. What a great program with such an amazing ROI.

    Has it worked very well besides just this one client? What I've noticed is that many of my clients are very busy people that also own businesses, so they don't have much time to be an evangelist for me.

    James, I'm very familiar with this same method, as it is taught in many sales organizations, including many that I've worked for in the past. I'm not so sure that I'd be comfortable with this approach since I'm not a "hard sell" type of guy. Possibly a more subtle approach would be to give customers 5-10 postage-paid postcards that they could send to friends?

    I also love your idea of developing a board of advisers from your client base. I don't do this formally, but I definitely provoke conversation from some of the smart business owners that I have as clients. Oftentimes clients outright give me marketing ideas to help me grow, which is awesome. How did you approach these clients to make things more formal? Did you incentivize them for this?
     
  5. Chris J

    Chris J LawnSite Silver Member
    Posts: 2,830

    I don't have many customers that have actually taken it to this level because, like you said, most of our clients are busy with their own careers. What it does do, however, is provoke my customers to take that extra step when someone asks about their lighting. Knowing they will be getting something out of it, they might make sure the person asking gets my phone number, etc... They may even take the time to explain the services they receive in greater detail, rather than just simply saying that we did the job and leaving it at that. It has worked very well, and I find that there are a lot more people than you would think that at least try to promote it (for a while at least.) You just have to make sure you keep track of it because you can make yourself look really bad if you don't follow through on your promise.
     
  6. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Posts: 4,102

    I was given this idea by a colleague of mine who is a business consultant. The volunteer board of directors he called it. I have to say, of all the advice I have ever been given, this suggestion has been the best.

    I started with 4 clients who I respect and admire for their business acumen. These guys are truly business leaders, one was Canadian CEO of the year in the late 90's and all of them are running very large and successful businesses. They are also some of my best clients. I simply called each one of them up at home, told them of "my idea" to form a volunteer advisory board and asked them if they would be interested in helping me grow and learn. Each one of them accepted within 30 seconds....no hesitation at all. Since the initial meeting I have added one other bringing my advisory board up to 5.

    I hold one 'annual meeting' each year. I borrow a board room downtown Toronto, I have them all driven in to the meeting, I prepare an agenda and distribute it at least a week before the meeting. We meet for about 3 hours or so and they generally rip me to pieces! It is the most powerful, moving and educational 3 hours of my year, bar none. After we are done in the board room I take them all out for a VERY high end dining experience as my "thank you" for their time. We spend that time socializing and networking and have a great evening. Each meeting leaves me buzzing with new ideas for days. It is a very cool thing.

    As for the advisor's, the feedback I get from them is that they really enjoy helping me out. They get a kick out of it and seem more willing to get together each passing year. Just last week I was asked when the next board meeting will take place. :)

    I hope this idea helps some of you out... it sure has propelled my business beyond any of my expectations that I had when I started out.

    Have a great day.
     
  7. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    My "good neighbor" referral is 10% of the job they get me. I have doled out a few grand over the years, but always in credit for lights. I spend at least 10 percent to get a new customer, so if they get me one, I just think of it as advertising expense.
     
  8. Pro-Scapes

    Pro-Scapes LawnSite Platinum Member
    Posts: 4,181

    A high end meal will be a lasting memory alot longer than a credit they cannot see or taste. We have sent clients to steak and lobster dinners to the tune of about 150 bucks but we landed a 6k job off it. I like the idea of asking flat out for the refferals. Simply create a sheet in word you can print out and it should be a part of every closing night.

    I am also going to start mailing surveys out and include like a 20 dollar gift card to a local resturaunt to get soem unbiased feedback. Going to ask about value.. price... did you shop around and with who and why did you pick us over joes lighting and such
     
  9. Chris J

    Chris J LawnSite Silver Member
    Posts: 2,830

    Surveys are a good thing. As long as you can keep an open mind, and be prepared for some possible thrashing, it is a very good way to keep you on your toes and constantly improve upon what you do.
     
  10. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Posts: 4,102

    There is high end and then there is high end! These advisors are pretty high end. LOL At last year's thank-you dinner the tab for the 5 of us came to $1800.00 Throw in a couple of hundred for the cars driving them in to the meeting, plus some other expenses and the meeting put me back a couple of thousand bucks.

    But... what would you pay to have 5 sr. executives spend 3 hours hashing out your business in a private meeting? The way I see it, it only cost me about $133 per man hour.... pretty much a bargain for what I get in return.
     

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