In my last two columns, I discussed the pitfalls of buying leads from popular online referral services. I also discussed several proven alternatives for generating high-quality leads.
In this installment, I’m going to discuss how to get other businesses to send you an ongoing stream of leads for free.
The Power of Referral Leads
Every floor dealer knows how easy it is to work with customers who got referred to them by someone they trust versus a person who walked in after they saw your sign or heard a radio ad.
Referred leads come in with borrowed trust. Many times they have made up their minds to buy from you. That means there’s not much “selling” needed. You are simply there to guide them through the selection process. They tend to be less price-sensitive and less suspicious. And best of all, they’re free leads!
If you are like most dealers, you probably have several referral partners already: realtors, designers, remodeling contractors, etc. (I do not include building contractors or property managers in this group. Those tend to function as repeat customers, not a source of referrals.)
Think about one of your superstar referral partners. How much business did they send to you over the past 12 months? I know dealers who have gotten over $100,000 in one year from a single referral partner. Not all your partners will be that productive.
Let’s run some very conservative numbers. If you get 25 referral partners, and they each send you a paltry four referral leads per year who buy from you, that’s 100 additional sales. With an average ticket price of $3,000, you’re looking at $300,000 in revenue with virtually no marketing costs. If you do a $Million per year in revenue, you could double the size of your business by merely acquiring referral partners.
How To Get Referral Partners
One method I teach dealers is a three-step process I used to develop over a dozen partnerships in 90 days.
Step 1: Make a list of 25-50 potential referral partners in your area. Send each of them a letter introducing yourself and your business. In the message tell them about your business, what sets you apart from your competition, and that you have an idea that will benefit both of you: a referral relationship. Tell them you will call within one week to schedule a time to meet.
I recommend getting creative and attaching a dollar bill or lotto scratcher to the top of the letter to use as an attention grabber. It generates curiosity so they’ll read your letter all the way through. Be sure to tie the attention grabber in with your message. I recommend only sending out ten letters at a time.
Step 2: Make follow-up calls to all the prospects you sent letters to the previous week. These are not cold calls. You’ve broken the ice by Fed-Exing them a letter with an attention-grabber. They’ll be expecting your call. Your only goal with the call is to schedule a meeting.
Step 3: Meet with the prospects for coffee or lunch, or at their place of business. Your goal is to develop a rapport with them, find out about how they do business. Also, educate them about your business. Explain why you’re different than your competitors and let them know how they will benefit by referring customers to you. Ask them if they are interested in being your referral partner. Get a solid “Yes” or “No” commitment.
By rounding up a herd of referral partners, you can generate an ongoing stream of high-quality leads for your business.
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.
See what real, live dealers are saying!