After learning from tracking sheets that 87% of his leads came from referrals, Jay Van Deusen re-allocated marketing dollars to hit those who give him most of his business.

One way Van Deusen Construction of Bel Air, Md., does that is to reward referrals with free service calls. While on site hanging pictures or pointing drywall, the crew asks past clients if they know anyone else who might be in need of the company's services.

Last year, Van Deusen spent $5,000 on service or warranty-related calls (half his marketing budget); for the first half of 2002 he's spent $3,500. He visits 35 past clients a year.

"Good people refer really good people," he says. "Some of the worst clients we've gotten were through display advertising and cold calls."

Van Deusen's office manager tracks lead sources in an Excel spreadsheet and runs queries in ACT! quarterly to determine lead sources. Van Deusen says it's important to track where leads come from, even if they're not ideal jobs. That way, you see what your marketing dollars bring in and can allocate to the best sources. His annual volume is $1.2 million, and by tracking his lead sources, he knows $1.044 million comes from referrals.

Van Deusen also calls or writes past clients, asking if they need minor handyman work done, then schedules a visit. The lead carpenter who ran the job makes the free call. Van Deusen's crew also visits clients six and 12 months after jobs have been completed.

How do carpenters feel about cleaning gutters and changing light bulbs? "They hate it at times, but they do it," Van Deusen says. "A lot of them have developed friendships with customers. These guys know the ultimate compliment is a referral." A $10,000 annual bonus pool -- based on gross profit, schedules met, and customer satisfaction -- also motivates the crew.