Make Customer Referrals Your No. 1 Source for New Business

Referrals from delighted customers have always been the least costly and most effective way to acquire new customers. Here’s why referrals are more influential and persuasive than all other forms of advertising.

  • Referrals make buying safer
  • Referrals are built on trust
  • Referrals are driven by emotions
  • Referrals allow questions and two-way feedback
  • Referrers tell referred buyers what to expect
  • Referrals save time doing research
  • Referrals cut through advertising noise and hype
  • Referrals have an enormous influence on what is purchased and how much is spent

Sell how customers buy

Most referrals are gained or lost during the sales process, so it’s vital that you give every customer the most enjoyable buying experience possible. Your sales process should make it easy for buyers to own the home improvement system that is just right for them. Customers who feel cared for and listened to give good referrals. Shoppers who feel pressured or manipulated give bad referrals.

Ask for referrals

According to a Texas Tech study, 83% of satisfied customers are willing to refer a product or service but only 29% actually do. The #1 reason good companies don’t get more referrals is they don’t ask. Everyone who has any customer contact can ask for referrals, “If anyone you know is planning to remodel their home, would you tell them about us?”

A Whirlpool Corporation study found consumers are 6 times more likely to act on personal referrals than advertising.  That’s why shoppers are six times more likely to call you from a business card given to them by a friend than the most expensive advertising. Make sure everyone in your company has business cards with their names, titles, and photographs. Encourage everyone to pass out as many business cards as possible 2 at a time. “Here’s one for your file and one to pass along to anyone we can help.”

Manage your online reputations

Your reputation is online for the whole world to see. Assign someone to consistently monitor on-line referral websites like Home Advisor, Angie’s List, Thumbtack, and Yelp. Address positive and negative reviews quickly and honestly. Take time to think about what you are going to say and exactly how you are going to say it, though, before you address it. Admit when you make a mistake and make it right. Research shows when buyer’s problems are quickly resolved to their satisfaction they are more likely to do business again than if they didn’t have the problem in the first place.

If you use paid referral providers like Home Advisor, Angie’s List, and Thumbtack you can get into trouble if you get a couple of negative referrals without having lots of positive referrals to rebalance the scale. The good news for referral focused contractors is the more positive in-depth referrals your customer’s post, the faster you move to the top of their referral lists.

Manage your message

Happy-customer videos are the holy grail of social media referrals. The best time to shoot excitement-charged videos to use on your website, YouTube and other social media outlets is after your final inspection. Return to your customer’s home four or five days after the job is complete.  Ask, “What three things do you like about your new…?” After they answer, ask: “Would you give me permission to shoot a quick video of you saying what you said?”

Manage mindshare

Customers who gladly give good referrals can forget you if you don’t stay in touch. A study commissioned by the Heating, Refrigeration, and Air Conditioning Institute of Canada (HRAI) found that 90% of consumers were satisfied with the work their contractor performed, but only 15% remembered the name of the contractor. The longer your customers go without hearing from you the less they remember you and the fewer referrals you get, so stay in touch at least twice a year.

Follow up on every referral

After you get a referral, find out how that job went and thank your customer for the referral. In the unlikely event the referred customer is upset for any reason, do everything in your power to take care of it. When you tell the referring customer all the things you and your company did to solve their friend’s problem, you are likely to get even more of their referrals in the future.

When you make referrals your number one source for new customers, you get wonderful people telling their friends to tell their friends to do business with you. It doesn’t get much better than that.


To help you make referrals your no. 1 source of new business please contact us at or call 800.515.0034 to make your reservation to attend the next sales skills for CSRs.



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