Our Thanks is Enough
We have considered offering rewards, particularly a referral fee, but we have never done so. We have been in business 25 years and provide a very good value to our customers. We get a lot of unsolicited comments from our customers indicating that we can use their names as references. The proof of their satisfaction is that we get a lot of calls from their friends and neighbors.
I think that if we offered a reward, some of our customers would actually be taken aback. We have asked our clients if they would act differently if rewarded, but they say it would not affect their referrals. They offer referrals without expectation of reward, and I feel good about it when it works out for everyone.
I do think our past customers need to be reminded of our existence. When a person purchases a once-in-a-lifetime remodel, he may appreciate it for a very long time, but he may not remember all the work that went into it. We send out postcards and letters to let past customers know we appreciate it when they remember us in talking to their friends and neighbors. We tend to get a few more calls each time we remind them that we need their support.
The one thing that drives our customers to refer our company is their satisfaction with the project. We have systems in place to make sure this happens.
Dana Jurak, CGB, CR
It Pays to Reward
Our referral program has evolved from a thank-you note to restaurant and store gift certificates. We changed to a cash referral payment almost 5 years ago in conjunction with a 15-year-anniversary celebration. The cash payment is successful and appreciated by our clients.
It took me 15 years to embrace a cash reward. I felt our customers would refer us because of our quality work and service, which they did. But by attaching a dollar amount to the referral, our customers realize the value of that lead. Leads are expensive — whether one is advertising in the Yellow Pages, a newspaper, on a Web site, or at a home show. Adding a successful lower cost lead source helps bring down the average cost of leads.
Referral leads are also intrinsically valuable for their quality. A salesperson will have to “sell” a lead from the Yellow Pages or a newspaper ad. A referral lead has already learned a good deal about our company and our services from the referring customer. And finally, the promise of cash keeps us at the top of our customers' minds so when they are asked by friends and relatives for a referral, they think of our company first.
Every customer who makes a referral is immediately sent a handwritten thank-you note along with a small gift such as a pen or a key chain. The cash referral fee follows later if the lead converts to a sale.