Referral programs are widely recognized as one of the most cost-effective ways to build new business. This is because satisfied customers are the most powerful weapon in your marketing arsenal, so why not use them to win more business?
In the world of glazing however, referral programs are almost non-existent. This is probably because they don't work well with residential customers. There is not enough repeat business to make it worth the customers while or yours for that matter. But what about your trade customers? If you work with builders or joiners that buy from you regularly, then why not encourage them to bring in more business?
We've talked in the past about the importance of testimonials but a referral program is the next step in making the most of a great customer transaction. In the same way you might check with a peer in your industry when looking for a new glass processor or software provider, builders and joiners are sure to take advice from a peer when considering who to get their glass from. A recommendation from someone they know will build a level of trust that you simply can't replicate. What a referral program does is give your customers a reason to go out and specifically mention your business, rather than waiting to be asked.
How does a referral program work?
Referral programs are easy to set up and won't break the bank. The most common method is to offer both parties a discount on referral, for example:
- Let's say you have a regular customer, 'Aspect Homes', who contract you for all the shower and mirror installations they do in new builds.
- They're working with another building company on a project. This new company is complaining about a glazing company they used who messed up a job for them.
- The guys from Aspect Homes mention that your company does good work and that you offer a $500 discount for trade customers on their first order.
- If the new customer decides to send some work your way, they get a $500 discount and Aspect Homes get a $500 discount their next order.
You obviously don't have to award $500 to each party — think about what will work best for your business — but the amount needs to be high enough to act as an incentive. Think about it like this: how much would I be willing to pay to pick up another regular trade account? How much do I make off my trade accounts each month? You will probably find that a new trade customer would earn you back your $1000 investment in no time at all. The larger the reward the more motivation your customers will have to spread the word.
Communicating the referral program
Start by making up a flyer that you can hand out to your trade customers when you see them. Consider including it electronically with all the invoices you send out or attach it to the paperwork with their next order. Make it easy to understand and be clear you are not asking them to recommend you if they don't want to.
You will a method of recording referrals. The simplest way is to ask your regular customer to send an email with the name of the person and company that they are referring. You can then reply to reiterate that they will be eligible for a bonus once the referee has paid for their first job.
Other ideas if you want to get more advanced might be to create a page on your website with a form. Here's an example of a roofing company in Orlando, Florida who collect referral information via Google Form which links to a private Google spreadsheet.
If you're not comfortable with offering discounts to your trade customers, you could get more mileage out of your testimonials for residential work by distributing them to mailboxes locally. When you collect a testimonial, ask your customer if they're happy to have their name on it and for it to be distributed (via a flyer in the letterbox) to the houses on their street. Even if the recipients don't know the customer, knowing that a local resident used and liked your service instills trust.
Have you tried implementing a referral program in your glazing business?