What is a Referral Network?
For many home service businesses, growth is a primary objective. Learning how to build a referral network can get you halfway there, by providing you a gateway into a world of new and potential customers.
A referral network is made up of businesses and business professionals who send you clients! It comprises similar but non-competing businesses to yours. A network can also include other industry professionals, suppliers, or even a handful of loyal customers.
Referral systems are a great way to attract new customers organically without too much investing in marketing campaigns. Building a business referral system is one of the best and most cost-effective ways for a small business to grow efficiently. In fact, word-of-mouth and referrals increased businesses’ marketing effectiveness by a staggering 54%.
Want to find out how your business can garner this same success through a referral network? Keep reading to find out how!
Ways to Build and Sustain a Referral Network for Your Home Service Business
Whether your business is in the plumbing industry or made up of general contractors, an effective referral network is critical to the exponential growth of your clientele.
Referral networks should include a scaffolded approach. If not managed properly, the benefits your business gains from building a solid network may not be sustained.
To grow your referral network sustainably, you must:
- Understand what your business brings to the table
- Always seek personal introductions
- Take advantage of chance encounters
- Set up an incentive program
- Get involved with trade associations, groups, or organizations in your industry
- Expand your borders
- Follow up with your referral source
- Pass on the goodwill and refer another business
Understand what your business brings to the table
Before you can even think about marketing your business to new clients, you must first fully understand the nature, services, and product offerings of your business.
What are your unique selling points (USPs)? What is your business doing better than other local businesses that allow it to stand out? How will your business’s services and offerings meet clients’ unique needs?
Whether you’re a small-scale contractor or a big electrical business, you need to have a solid elevator pitch. This is a 90-second summary of your business that positions it as an ideal solution to your customer’s problems.
Your elevator pitch should be quick, to the point, and easily memorized. If you can manage it, consider adding a statistic that shows off your business’s success. Also, add your business’s motto or slogan to showcase its voice and personality.
Here’s an example of an elevator pitch for a plumbing business you can lean on for inspiration!
When’s the last time you had your home’s water pipes inspected? If it’s anything over [X years], you’re in trouble. Odds are, you might have a pinhole leak that you don’t even know about. Imagine the cost and trouble when that slow leak suddenly causes major problems. Now, what if I told you that you could prevent all future damage and unnecessary costs, all at a low price? With [company name], you can opt for regular maintenance for all your internal plumbing systems to ensure all those pipes stay in order. We make sure your home never runs into any unforeseen problems by anticipating all the problems. We’ve serviced over 100 homes in the last month and prevented [X amount of dollars] in pipe repair!
Always seek personal introductions
Ask to meet the customer in-person home inspection or even a video inspection a way to personally introduce yourself. By doing so, you show the customer you’re personally interested and plant the idea of a follow-up meeting in their minds.
If the customer is hesitant for a personal meeting, try warming them up over a video conference or, at the very least, a phone call.
You can end the meeting by leading into the possibility of another meeting, this time of commercial value. Encourage them to contact you again if they’re interested in availing your services or have any questions, and build the relationship from there.
Take advantage of chance encounters
You never know when or how you’ll bump into an amazing business opportunity, but it’s always best to stay prepared. So, how can you actively network even when you’re off the job?
- Keep your verbal elevator pitch ready and top of mind at all times. It should become second nature to you.
- If you have a logo, wear logo-branded designs when you’re out (on the clock, of course, but even when on your days off if you so choose!). Something as simple as a t-shirt or a sticker on your car can generate interest from prospects.
- Keep professional business cards handy. Hand them out when you make a potential connection with someone. You can also give a handful of business cards to your business affiliates, and ask them to keep them in their offices or buildings. This is another great way for businesses in your network to refer clients to you should an appropriate opportunity arise.
Set up an incentive program
Incentive programs are a great way to get existing and potential customers hooked on your business offerings and services. Your business can offer rewards to existing customers for successful referrals they send your way!
Take a look at this example from Elite Roofing for inspiration
They lay out specific guidelines on how to be eligible for the program, such as leaving an authentic review. Depending on the level of quality referrals a customer brings in, they offer different levels of prizes or rewards. For example, a customer that brings in one qualified lead will receive a $250 gift card from a merchant of choice.
There are other programs you can offer, such as social gifting, service/product upgrades, and more!
Tweak your incentive program according to your service’s nature and what your customers like. If you’re a HVAC contractor, you might offer a service upgrade to clean all air filters for free in exchange for a qualified lead. Whatever your home service business decides to implement, just make sure it still brings the highest value!
Get involved with trade associations, networking groups, or organizations in your industry
These professionals may have a market base or clientele interested in your services but unaware that they need them. By showcasing your expertise, you can build synergy with the network and grow your opportunities to generate more leads.
How can you do this?
- Attend trade shows, special networking events, and industry conferences to meet people in person. Nothing beats face-to-face interaction.
- Join Facebook groups, LinkedIn groups, or other groups on various social media platforms. Interact with key stakeholders and start getting your business’s name circulating online.
- Join and engage others in online forums specific to your industry. See the hot topics of discussion pertaining to your industry. Then, get involved in the conversation!
- Join BNI groups! Tap into BNI’s network of referrals to grow your reach. With over 275,000 businesses on the BNI network, your business is sure to find its place and generate valuable leads.
- Join or attend events held by your local chamber of commerce. Chambers of commerce are a great way to tap into an entire network of local and regional businesses in your industry.
Expand your borders
Don’t limit your business by its geographical location—think bigger!
First, assess and determine your feasible boundaries. Because you’re a home service-based business, it’s probably not feasible to travel cross-state for every job. However, determine the lengths your business is willing to travel. Then, start making your footprint in those areas and building a network there.
Think of all the friends, family, and colleagues in neighboring or slightly distant cities that can help you expand your reach. Once you’ve identified them, ask them to think of your business and send referrals your way! Here are some tips to support your business along the way:
- Because this new network may not be directly in your city, they might not be super familiar with your business. Set up a time to talk to them about your business and its offerings.
- Post exciting social media updates and keep this new referral network (and existing ones!) informed on what you’re up to, especially if you offer a new range of services, changes in pricing, or anything that impacts your business’s core functions.
- Update all your online business accounts to reflect a newer, wider geographical reach. Make your business accessible to customers far and wide. You can use sayings such as, “Now serving the greater Los Angeles area!” or “Book us in your city! We travel up to [X-number] of miles”.
Appreciate and follow up with your referral source
It’s essential to keep your network happy and cultivate positive relationships with everyone who sends a referral your way.
Make sure your business creates a system for sending the source of a referral a thank-you after providing a business opportunity with a new customer. It’s a gesture of goodwill and one that can go a long way with more referrals coming your way!
When you send your referral source a thank-you, make sure you:
- Keep them informed on how your business is going and how their referral has helped.
- Mention the outcome of the referral briefly and thank them for the opportunity.
- Offer them a referral in exchange if there is a chance for one.
Here’s a sample template of how you can frame the note. In this example, the business is in electrical maintenance:
Dear [Referral source name],
I am writing to express my gratitude for your customer referral to our business, [Business name]. Thanks so much for your confidence and support in our business; your referral has enabled us to work with a new customer who needed support installing overhead lights in her garage. This customer has also, coincidentally, helped us achieve our sales quota for the quarter!
As a token of appreciation, we would like to extend a special contract with you for your office’s electrical maintenance needs. Do get in touch with us regarding a business discount, or if you have questions.
[Business owner name]
Pass on the goodwill and refer another business
Once you’ve built a strong network of your own, it’s time to pay the referrals forward and contribute to your industry’s ecosystem.
You should never think of your referral network as a one-sided relationship. To successfully build your referral network, your business should be willing to give referrals out as well.
A great way to do this is by establishing a partnership in which you exchange referrals for specific services. Let’s say, for example, you’re a plumber who always seems to get asked if you know any good roofers in the area while on the job. This would be a great opportunity to connect with a roofing business and agree to exchange referrals whenever they get asked for a plumbing service.
This increases the chances for your business to expand its services and generate referral opportunities for key partners. It’s a win-win!
How Signpost Can Help Your Home Service Business
Growing the number of referrals can be made easier if you have the proper support for your business from the start. This is where we come in.
Work with us at Signpost to help manage your home service business and take it to the next level.
From automating marketing to managing your online reviews and even tracking your business’s payments, we’ve got you covered so your business can focus on building referrals the way it deserves.
Get in touch with us today to start growing your business’s reach, your business’s marketing efforts, and your business’s potential!