Referrals are critical for your prosperity in business for many, many reasons.  Here are just a few:

  • Zero marketing costs.
  • They are less price-resistant than cold prospects.
  • They tend to have higher than average sales tickets than cold prospects.
  • You are entering the relationship on ‘borrowed trust.’  In other words, somebody the client trusted referred them to you.  You benefit from that trust.

For most dealers, referrals are a ‘happy accident.’

If you provide excellent service long enough, eventually word will get out, and you’ll gain some referrals.  The problem is that most dealers never take referrals beyond the ‘happy accident’ phase.

You should have a systematic, ongoing referral program that farms your past and present clients every single day for referrals.  My Platinum Inner Circle Club members are taught to use just such a system.  Here are some elements that must be part of your referral program:

  1. Must be systemized.  On each job you sell, certain things get done every time.  Measure the rooms, order the product, schedule the installation, etc.  Obtaining referrals must happen the same way.  Make this a part of your day-to-day operations.
  2.  From the time a client walks in the door until the job is complete, you should be marketing to them to plant ‘referral seeds,’ and train your sales team to use referral scripts.  Why?  This the time when clients are thinking about floors.  This is a ‘hot’ period when they will be more open to giving you referrals than at any other time in your relationship with them.
  3. Always ask for the referral.  (This will be more successful if you’ve done step 2.)
  4. Have a sales & marketing system in place to follow up with referrals.
  5. In your monthly marketing to past clients, make sure you are promoting your referral program.

Here are the benefits of having this kind of referral program:

Let’s say you sell 30 jobs per month.  In my referral program, I am able to average 7 referrals for each job.  But let’s estimate conservatively and call it 3.

Let’s say your average ticket is $3,000.

30 jobs x 3 referrals = 90 referrals per month.

By using a carefully laid out process as described above, you should be able to identify the 9 people out of the 90 (10%) who need flooring right now.

9 additional sales x $3,000 average ticket = $27,000/mo

That’s $324,000 in additional sales PER YEAR with little-to-no marketing costs. 

Question:  How much are you LOSING every year by not investing in a referral program?

 

To Tons Of Customers!
Jim Augustus Armstrong is The “Coach”

Jim Augustus Armstrong is the President of Flooring Success Systems, a program that equips dealers to double their profits, cut their work hours in half and beat the boxes! Many dealers have totally transformed their businesses and their lives for the better after joining Flooring Success Systems.
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