Thinking of offering a referral bonus

Discussion in 'Business Operations' started by Zach76, Jan 6, 2004.

  1. Zach76

    Zach76 LawnSite Member
    Posts: 197

    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.
     
  2. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656

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

    mtdman LawnSite Gold Member
    Posts: 3,137

    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
     
  4. Zach76

    Zach76 LawnSite Member
    Posts: 197

    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.
     
  5. LawnPerfect

    LawnPerfect LawnSite Senior Member
    Posts: 318

    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.
     
  6. sgallaher

    sgallaher LawnSite Senior Member
    Posts: 265

    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.
     
  7. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,411

    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 thatÂ’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.
     
  8. GarPA

    GarPA LawnSite Silver Member
    from PA
    Posts: 2,585

    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
     
  9. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    Hi Zach,

    Here is a quote that is interesting from this post.

    "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."
     
  10. Zach76

    Zach76 LawnSite Member
    Posts: 197

    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.
     

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