Using Referrals to Increase Business

by WOHe

I had lunch with a friend of mine the other day who specializes
in customized kitchens. He told me that business for him has been
absolutely great, but he’s starting to see a trend that it might be
getting a little soft. He didn’t have as many customers in his
queue coming up as before. I asked him why. He believes it has to
do with a lot of things.

The economy is beginning to soften.

  • We have a new president and people are waiting to see how
    things will shake out.
  • The car business is way off, and there’s a saying: “How GM
    goes, so goes the nation.”
  • The dot.com freefall has cost a lot of people a lot of
    money.
  • With interest rates so low, people would rather move than
    remodel.
  • The banks and finance companies are starting to tighten up
    their credit policies.
  • People are worried about a possible recession.
  • Summer is coming and families are saving for a vacation.
  • There’s a lot more competition out there.
  • People are starting to shop more on price. They’re becoming
    more interested in getting the best “deal.”

Wow! If “Making Excuses” was an Olympic event, this guy could be
a gold-medal contender. I asked him exactly what he was doing to
try to turn things around, and he said he hadn’t really thought
about it. After all, customers are still calling and coming through
the door, just not like they used to.

So, then I asked him if he thought about asking for, or
following up on, past referrals. He said he didn’t like to ask for
referrals doesn’t want “bird dogs,” and doesn’t want to impose on
people. And therein lies the problem. He “doesn’t want to.” Asking
for and following up referrals won’t work if you don’t want it to
work.

Stepping up
Referrals are a great source of new customers. The problem is that
we don’t think about them when we’re writing up a contract. The
first thing we usually think about when writing up a deal is how
much we’re going to make. Then, we worry about whether the check is
going to clear or if the contract is going to go through. We don’t
say, “Jack, I’ve been meaning to ask you something. I could really
use your help. You see, we get a lot of new referrals from people
like yourself people who are very excited to be getting a new
kitchen or bath. Who do you know who also might really enjoy a
quality kitchen like this?”‘

Asking for a referral is step one. You have to ask, and you have
to use a little personality at the same time. Believe it or not,
most of the time you’ll get a name. Sometimes you’ll get two. Then
just let it go. Don’t start with “I’ll give you a check if they
buy,” or “If they buy from me, I’ll give you a commission.” That
puts them in an awkward position.

Friends help out their friends. If you’ve made each customers
your friend first, it’s easy to ask for the name of a referral.

Step two is a little different. You have to follow up the
referral. That’s tougher. It’s almost like a cold call, but just a
tad warmer. However, the reality of the situation is that if you
really want more business, you simply have to do it. Just pick up
the phone and call.’

If you get an answering machine, just leave your name, phone
number and a message that you have “good news” for them. Nothing
more. People love good news. They will probably return your
call.’

When you finally get a chance to speak to them (either by you
calling them, or when they call you back), explain to them that you
got their name from the customer who referred them. Explain that
you are just doing your job. It’s how you earn your living. Be
nice. Joke with them. Get them to be your friend on the phone.
Don’t try to sell them anything. Just try to get an appointment for
them to come in to meet you personally. Maybe you could tell them
you would like their opinion on a new product that just arrived.
Offer them something of perceived value for stopping in (lottery
tickets, ceramic coffee mugs and T-shirts work great).

There’s a very good chance that if they have even the remotest
amount of interest, they’ll come in to see you. If they don’t, and
you have established some rapport with them over the phone, ask
them if they know somebody who would be interested in a new kitchen
or bathroom. Tell them again that you’re just doing your job. It’s
how you make a living, and you appreciate anything they can do to
help. Again, being nice pays off.

Asking for referrals takes a little bit of skill. You have to
ask at the right time. Ask when they are at their most excited
right after they sign the contract, when they realize they are
finally the owner of new kitchen or bath, and can’t wait to have it
installed. A day later will be too late. Do it before they leave
your place of business.

Think about the last time you bought a new car. You took
delivery and drove it carefully all the way home. You took your
friends for a ride in it. Washed it the next day. Then all of a
sudden you weren’t looking for people to show your new car to. The
“new car smell” started to wear off. Excitement waned.’

You have to ask for a referral when your customer is the most
excited. And that’s when they make that final decision to sign the
contract and can’t wait for the work to get started. What’s nice
about the kitchen and bath business is that you can ask then, and
also ask again when the job is completed.

If they say that they don’t know anybody, don’t worry about it.
You tried. Let them think about it. They might even call you back
in a day or two with a name. Or a month later they may mention your
name in a conversation and suggest someone come in to see
you.’
It just takes that first step of letting them know that referrals
are an important part of your business. They could provide you with
an endless stream of customers to get you over the slow
periods.

Bob Popyk is publisher of Creative Selling, a monthly newsletter
on sales and marketing strategies. He is the author of the book,
“How to Increase Your Kitchen & Bath Business by 25% Starting
Next Week!” available through the National Kitchen and Bath
Association, and is a speaker at various industry events, including
the National Kitchen & Bath Conference. For a free sample of
his newsletter, call 800-724-9700 or visit his Web site at
www.creativeselling.com.

Related Posts

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More