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Paying for referrals

by Electrical
35 replies
In my business (local electrical contracting) referrals are the absolute best way to get new work. I close around 95% of my referrals. Most potential customers just want someone to tell them which company is going to do good work and not screw them. That's all they need to hear.

Getting referrals also saves me a LOT of time because those people who were referred to me will usually use me. When potential customers find me thru other means, they often get estimates from other contractors as well. Going to give estimates and not getting the job is an incredible inefficiency.

I was thinking about a program to help push people into referring my company. I was thinking offering a $25 Visa Gift Card for any job they refer me to over $350. And then maybe tier it, $50 for a job over $1,000.

$25 is not a bad acquisition cost, especially for a referral which has a higher rate of closure.

I could have this program printed on a postcard type flyer and hand it to every customer when the job is done. Or maybe a refrigerator magnet.

Thoughts?
#paying #referrals
  • Profile picture of the author jamesfreddyc
    Make it super easy to forward you as a referral by sending them a text message with your info. Business cards, flyers, post cards all get lost very quickly along with your contact info. Text message is always there on their phone, visible, easily retrievable and even easier to forward to their referral.

    Edit: you should also be collecting and maintaining a contact database of your customers. Incredibly valuable as it will give you big cost savings later on when you want to reach out to them again for new offers.
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    • Profile picture of the author Electrical
      Originally Posted by jamesfreddyc View Post

      Make it super easy to forward you as a referral by sending them a text message with your info. Business cards, flyers, post cards all get lost very quickly along with your contact info. Text message is always there on their phone, visible, easily retrievable and even easier to forward to their referral.

      Edit: you should also be collecting and maintaining a contact database of your customers. Incredibly valuable as it will give you big cost savings later on when you want to reach out to them again for new offers.
      My company is all digital which means one of the first things I do when taking down the info of potential customers is get their e-mail address
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      • Profile picture of the author jamesfreddyc
        Originally Posted by Electrical View Post

        My company is all digital which means one of the first things I do when taking down the info of potential customers is get their e-mail address
        Email read rates: 2%
        Direct mail read rates: 60%
        Sms read rates: 97%

        Get their phone number.
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        • Profile picture of the author Electrical
          Originally Posted by jamesfreddyc View Post

          Email read rates: 2%
          Direct mail read rates: 60%
          Sms read rates: 97%

          Get their phone number.
          Of course I have their phone number and address.
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  • Profile picture of the author umc
    I'll be honest and say that in my experience (cleaning business) you don't have to pay for referrals. In fact, I've never gotten any when offering to pay. Instead, I'm just real with my clients. If I have an opening I'll email my clients and let them know that I have a chance for someone they know to get on our schedule and the referrals come flying. But this is all predicated on creating an experience that makes an impact on that customer so that they can't help but to tell everyone about you. Personal attention on the job and personal follow up after builds relationships and people talk about people they like.
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    • Profile picture of the author Claude Whitacre
      I've both compensated for referrals, and just got them for free.

      The compensated referrals are to generate people that are willing to talk to me, because someone is getting a gift (them or the referrer). But the prospect doesn't need to show interest in the offer, to be highly qualified.

      In my marketing business (selling online marketing services).....interest in what I'm doing is essential....to be a qualified prospect, so I don't compensate for those referrals. The referrals are part of the sales process, not to earn a gift.


      Anyway, my book on sales prospecting covers all that.

      Or, I recommend this book;

      Beyond Referrals by Bill Cates.
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      • Profile picture of the author Electrical
        Originally Posted by Claude Whitacre View Post

        I've both compensated for referrals, and just got them for free.

        The compensated referrals are to generate people that are willing to talk to me, because someone is getting a gift (them or the referrer). But the prospect doesn't need to show interest in the offer, to be highly qualified.

        In my marketing business (selling online marketing services).....interest in what I'm doing is essential....to be a qualified prospect, so I don't compensate for those referrals. The referrals are part of the sales process, not to earn a gift.


        Anyway, my book on sales prospecting covers all that.

        Or, I recommend this book;

        Beyond Referrals by Bill Cates.
        In my business, I guess most referrals go like this:

        Suzie mentions to Sally that she just got a new ceiling fan installed and Sally decides that she wants one too, so she asks for the number of the electrician who did it.

        Or, Sally needs some new lights in her dining room so she asks Tom who installed his.

        What I would like is for Sally to tell all her friends that her new lights look good and they should have some installed in their own house
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        • Profile picture of the author jamesfreddyc
          Originally Posted by Electrical View Post

          In my business, I guess most referrals go like this:

          Suzie mentions to Sally that she just got a new ceiling fan installed and Sally decides that she wants one too, so she asks for the number of the electrician who did it.
          I would expect Suzie to fumble thru her pocket book/purse/junk drawer to find your business card or flyer you left with her (that isn't there because it's already lost).

          See my first reply.
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        • Profile picture of the author Claude Whitacre
          Originally Posted by Electrical View Post

          In my business, I guess most referrals go like this:

          Suzie mentions to Sally that she just got a new ceiling fan installed and Sally decides that she wants one too, so she asks for the number of the electrician who did it.

          Or, Sally needs some new lights in her dining room so she asks Tom who installed his.

          What I would like is for Sally to tell all her friends that her new lights look good and they should have some installed in their own house
          And that is precisely the situation I get referrals for. I ask for referrals generally after a couple of months, after they have bragged to their friends about what I did for them.

          The people that the client bragged to..that said that they may have an interest in what I do? Those are the names I want, because they are already sold.


          People refer others, in a way that really pays...if they are very happy with your work, or product. No other reason.

          If they are already very happy with you, paying them isn't necessary. If they are not happy, paying them won't help.
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          • Profile picture of the author Electrical
            Originally Posted by Claude Whitacre View Post

            And that is precisely the situation I get referrals for. I ask for referrals generally after a couple of months, after they have bragged to their friends about what I did for them.

            The people that the client bragged to..that said that they may have an interest in what I do? Those are the names I want, because they are already sold.


            People refer others, in a way that really pays...if they are very happy with your work, or product. No other reason.

            If they are already very happy with you, paying them isn't necessary. If they are not happy, paying them won't help.
            So you're saying to forget the gift card referral program completely and work on making the customers happier so they want to refer me? Is that correct?

            I current try to do that. One example is being clean and neat, we always make sure that the customer sees us bring in the drop cloths and vacuums and we leave the area we worked in cleaner than it was before we arrived, people LOVE that.

            I try to find other things like that to make the customer happy. Unfortunately, many customers just don't care too much. The only thing that would make them happier is a lower price, which I am not willing to do.


            Originally Posted by jamesfreddyc View Post

            I would expect Suzie to fumble thru her pocket book/purse/junk drawer to find your business card or flyer you left with her (that isn't there because it's already lost).

            See my first reply.
            Will that aggravate people? Personally, I hate getting text spam and it's usually only from real spammers. If it were from a local business that I used, I would be unhappy and hold it against them.

            That's just me, maybe the general public is different. I just don't want to alienate any potential repeat customers by pissing them off with a spam text message.
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            • Profile picture of the author jamesfreddyc
              Originally Posted by Electrical View Post

              I just don't want to alienate any potential repeat customers by pissing them off with a spam text message.
              Yeah, absolutely. I wouldn't recommend spamming anyone. But that has nothing to do with SMS/Text referrals.
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              • Profile picture of the author Electrical
                Originally Posted by jamesfreddyc View Post

                Yeah, absolutely. I wouldn't recommend spamming anyone. But that has nothing to do with SMS/Text referrals.
                Can you please explain the difference.

                IMO, as a consumer, when I get an unsolicited e-mail or text message from a business promoting themselves, I see it as spam.
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                • Profile picture of the author jamesfreddyc
                  Originally Posted by Electrical View Post

                  Can you please explain the difference.

                  IMO, as a consumer, when I get an unsolicited e-mail or text message from a business promoting themselves, I see it as spam.
                  You said earlier that you are "all digital" and collect their information already. Adding an opt-in process shouldn't be a big deal.
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                  • Profile picture of the author Electrical
                    Originally Posted by jamesfreddyc View Post

                    You said earlier that you are "all digital" and collect their information already. Adding an opt-in process shouldn't be a big deal.
                    Yes, when a customer calls I take down their info, including their e-mail address. I use no paperwork, I e-mail estimates, invoices, and receipts to them.

                    Some customers e-mail instead of call, so I have their e-mail address and other information from that.

                    What easy way can I add a text message opt-in process to that?
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                    • Profile picture of the author jamesfreddyc
                      Originally Posted by Electrical View Post

                      Yes, when a customer calls I take down their info, including their e-mail address. I use no paperwork, I e-mail estimates, invoices, and receipts to them.

                      Some customers e-mail instead of call, so I have their e-mail address and other information from that.

                      What easy way can I add a text message opt-in process to that?
                      How are you currently asking for referrals?

                      I'd think it's going to be different for the type of business and social interaction you engage in. For example, if you were a storefront you could just capture it at the counter at checkout and maybe even offer them some referral discount or bonus of some kind. But since you are more in construction type business it may need tweaked.
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                      • Profile picture of the author Electrical
                        Originally Posted by jamesfreddyc View Post

                        How are you currently asking for referrals?

                        I'd think it's going to be different for the type of business and social interaction you engage in. For example, if you were a storefront you could just capture it at the counter at checkout and maybe even offer them some referral discount or bonus of some kind. But since you are more in construction type business it may need tweaked.
                        Currently I just talk to the customer when the job is finished. I'll give them some business cards and mention to them that if they know anyone who is looking for work I would appreciate them referring me.
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                        • Profile picture of the author Oziboomer
                          We do it two ways with one of our offline businesses.

                          We send a "Do a Friend a Favor" gift check out in a hand written envelope usually between 2-4 weeks after purchase.

                          The check is valid for redemption by the receiver but we encourage them to give it to someone else who may use it if they can't.

                          The other one that has worked well particularly on new clients is we have a number of sealed envelopes...a lucky dip... and we say if you are happy with our service please write the name and address of someone who'd like to receive one of our gift checks on the envelope and we get them to put their address as the return address.

                          The envelope is pre-printed with "Thinking of You" and we already have a stamp on it.

                          Inside we have a random value gift check and a letter that just says. I just used these guys and they gave me this gift that I thought you might use.

                          We offer to post it for the client and we enter the mailing address into the database for future followup. If they decide to post it themselves there is still a high redemption because it comes postmarked and personally addressed from the client to the prospect


                          Originally Posted by Electrical View Post

                          Currently I just talk to the customer when the job is finished. I'll give them some business cards and mention to them that if they know anyone who is looking for work I would appreciate them referring me.
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                    • Profile picture of the author DaniMc
                      Giving cash directly for referrals in a business like yours could be a mistake. Give it some more thought.

                      Why do people make the referral now? It isn't to make money. It is because they believe in you, and telling others about a good service provider helps their friends and helps you.

                      More importantly, the action of helping gives them a feeling. They are making the referral in order to get that feeling.

                      Mixing a paltry sum of cash into it will ruin that whole chain of connection and good feelings. It will cheapen what they are doing.

                      The feeling is much more valuable to them than $50.

                      So,I know you want to reward them, and you should. However, giving cash when they are seeking an experience of good feeling will not be nearly as effective as giving them what they are seeking - an experience.

                      By placing a $50 price tag on a referral, I believe you are greatly underestimating what it is worth.

                      First, figure out what you are willing to pay for a job. Not a lead - a job.

                      It is likely that if you calculate how much each job costs in advertising, you will pay anywhere from $200 - $400 per completed job.

                      This is the correct value for the completed referral - whatever you are willing to pay in advertising.

                      Now, don't just give cash. Remember they are seeking an experience, so give them one.

                      Private box seats at a ball game. Dinner and a live performance. An expensive tour or show or special memorabilia.

                      Make referring you a very rewarding experience. Pay the money you would normally pay an advertisement per job completed.

                      Don't look at referral as a cheap source of business. Reward these people according to the immense value they provide and they will love, refer, and talk about you forever.

                      Keep your eyes open and make a list of cool entertainment and special experiences you can give people. When you finish a job they sent you, drive to their home in person, thank them and deliver the experience.

                      A few hundred is cheap comparing to what you will gain.
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                      • Profile picture of the author Claude Whitacre
                        Originally Posted by Dan McCoy View Post

                        So,I know you want to reward them, and you should. However, giving cash when they are seeking an experience of good feeling will not be nearly as effective as giving them what they are seeking - an experience.

                        By placing a $50 price tag on a referral, I believe you are greatly underestimating what it is worth.

                        First, figure out what you are willing to pay for a job. Not a lead - a job.

                        It is likely that if you calculate how much each job costs in advertising, you will pay anywhere from $200 - $400 per completed job.

                        This is the correct value for the completed referral - whatever you are willing to pay in advertising.

                        Now, don't just give cash. Remember they are seeking an experience, so give them one.

                        Private box seats at a ball game. Dinner and a live performance. An expensive tour or show or special memorabilia.

                        Make referring you a very rewarding experience. Pay the money you would normally pay an advertisement per job completed.

                        Don't look at referral as a cheap source of business. Reward these people according to the immense value they provide and they will love, refer, and talk about you forever.
                        Absolutely. Money is a bribe. But after you get a job through them, the classy thing to do is send a gift. A gift, not promised, but sent after the fact.....is the smart way to reward referrals. They will remember you forever, probably do business with you forever, and will send you more referrals that will buy.

                        When they give you a referral, it's a favor to their friend...not a favor to you. You are a resource...an adviser.

                        Maybe the most important question I ask, when getting referrals, is;
                        "Who did you tell about the work I did for you?". I want to know who he bragged to.

                        Referrals don't get better than that.
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                        • Profile picture of the author DaniMc
                          Originally Posted by Claude Whitacre View Post

                          Absolutely. Money is a bribe. But after you get a job through them, the classy thing to do is send a gift. A gift, not promised, but sent after the fact.....is the smart way to reward referrals. They will remember you forever, probably do business with you forever, and will send you more referrals that will buy.

                          When they give you a referral, it's a favor to their friend...not a favor to you. You are a resource...an adviser.

                          Maybe the most important question I ask, when getting referrals, is;
                          "Who did you tell about the work I did for you?". I want to know who he bragged to.

                          Referrals don't get better than that.
                          And a lot of times, I don't just give a gift. If it is someone whom I get along with reasonably well, I take them there. I invite the spouse, my wife, and make it an evening. We have lots of fun, and the entire cost can be written off as entertainment. The companies with sales staff and entertainment budgets understand the concept well.

                          Soon, you have tons of friends and loyal referral partners. It really doesn't have to cost more than advertising, but we should invest the same.
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            • Profile picture of the author Claude Whitacre
              Originally Posted by Electrical View Post

              I try to find other things like that to make the customer happy. Unfortunately, many customers just don't care too much. The only thing that would make them happier is a lower price, which I am not willing to do.
              .
              Anything to make their experience better. Not dropping your price. You don't want referrals from everyone, only excited clients. Honest, you need to read my book on prospecting, it's all laid out, verbage and everything.
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              • Profile picture of the author Electrical
                Originally Posted by Claude Whitacre View Post

                Anything to make their experience better. Not dropping your price. You don't want referrals from everyone, only excited clients. Honest, you need to read my book on prospecting, it's all laid out, verbage and everything.
                For $2.99 I can't go wrong.


                You ever read any of Ellen Rohr's stuff? A lot of her stuff has helped me tremendously, especially with pricing (and sticking to it).
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    • Profile picture of the author Electrical
      Originally Posted by umc View Post

      I'll be honest and say that in my experience (cleaning business) you don't have to pay for referrals. In fact, I've never gotten any when offering to pay. Instead, I'm just real with my clients. If I have an opening I'll email my clients and let them know that I have a chance for someone they know to get on our schedule and the referrals come flying. But this is all predicated on creating an experience that makes an impact on that customer so that they can't help but to tell everyone about you. Personal attention on the job and personal follow up after builds relationships and people talk about people they like.
      "you don't have to pay for referrals"

      I don't currently pay for them, but I would like to push people into giving them more often.

      Claude said this in another thread:

      "Claude, you know what the difference is between you and me? I'll make ten presentations in a week, sell two, and be happy with the two sales. You'll work half as much, make three presentations..sell two, and then spend the rest of the time figuring out why you missed that third sale"

      That right there is what I think about all the time. Estimates cost me money. They take a minimum of an hour, during that same time I could be out doing a service call billing $129/hr. But during the estimate I am losing money.

      Estimates from referred customers close at a much, much higher rate, I almost always get them, and the estimate time is included in the job so that estimate is no longer a loss.

      So that's why I want more referrals.

      I just got back to the office 15 minutes ago, I went out to do a 3 hour job myself because my guys were all busy. The customer loved the work, he gave me a $40 tip just because he was so happy, and tipping is not normal is my business.

      I gave him cards and asked him to give one to anyone he knows looking for electrical work.

      He may refer me, he may not. Altho he is happy, he just may not care anymore tomorrow.

      That's why I figure cold hard cash in his hand might nudge him a little.
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      • Profile picture of the author umc
        Originally Posted by Electrical View Post

        "you don't have to pay for referrals"

        I don't currently pay for them, but I would like to push people into giving them more often.

        Claude said this in another thread:

        "Claude, you know what the difference is between you and me? I'll make ten presentations in a week, sell two, and be happy with the two sales. You'll work half as much, make three presentations..sell two, and then spend the rest of the time figuring out why you missed that third sale"

        That right there is what I think about all the time. Estimates cost me money. They take a minimum of an hour, during that same time I could be out doing a service call billing $129/hr. But during the estimate I am losing money.

        Estimates from referred customers close at a much, much higher rate, I almost always get them, and the estimate time is included in the job so that estimate is no longer a loss.

        So that's why I want more referrals.

        I just got back to the office 15 minutes ago, I went out to do a 3 hour job myself because my guys were all busy. The customer loved the work, he gave me a $40 tip just because he was so happy, and tipping is not normal is my business.

        I gave him cards and asked him to give one to anyone he knows looking for electrical work.

        He may refer me, he may not. Altho he is happy, he just may not care anymore tomorrow.

        That's why I figure cold hard cash in his hand might nudge him a little.
        A guy that just gave you $40 isn't going to be nudged by a referral fee. People that don't refer either do so because they're unhappy or they don't know anyone in need or because they simply forgot. What are you doing to keep top of mind position? Do you follow up periodically in any way to keep your service in their mind?
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    • Profile picture of the author Rus Sells
      Not only does this attitude towards your customers get you referrals it should be getting you great reviews!

      As an aside, I never really understood why businesses think
      they should get a referral or a positive review for doing what
      they were paid to do.

      It's like a kid who's parents have a set of chores for them to do and when they do the chore they feel they should be rewarded.

      No you don't get rewarded for doing what you agreed to do, you get rewarded for going beyond what you agreed to do.

      Originally Posted by umc View Post

      I'll be honest and say that in my experience (cleaning business) you don't have to pay for referrals. In fact, I've never gotten any when offering to pay. Instead, I'm just real with my clients. If I have an opening I'll email my clients and let them know that I have a chance for someone they know to get on our schedule and the referrals come flying. But this is all predicated on creating an experience that makes an impact on that customer so that they can't help but to tell everyone about you. Personal attention on the job and personal follow up after builds relationships and people talk about people they like.
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      Review Sentry
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      • Profile picture of the author Electrical
        Originally Posted by Rus Sells View Post

        Not only does this attitude towards your customers get you referrals it should be getting you great reviews!

        As an aside, I never really understood why businesses think
        they should get a referral or a positive review for doing what
        they were paid to do.

        It's like a kid who's parents have a set of chores for them to do and when they do the chore they feel they should be rewarded.

        No you don't get rewarded for doing what you agreed to do, you get rewarded for going beyond what you agreed to do.
        I think my field is especially hard to get customers to like you for a few reasons. First, we are expensive in comparison to the other trades. Insurance and licensing costs are the highest as are the wages for skilled and experienced men. So while many customers think we are driving our Ferrari's to the marina and getting on our yachts, in reality our profit margin is no higher than their painter or carpenter.

        But they're painter or carpenter make huge changes to their house, things they can see. The electrical work we do is usually behind the scenes. Our bread and butter is service work, those small 2-5 hour jobs. A customer wants a new outlet on their wall behind their TV or microwave, to them it's just a 50 cent outlet that they see on the shelf at Home Depot, but to us it's $50 in material plus many hours of labor. So when we charge $400 for it, no one is really happy.

        Sometimes we install something that a customer could see and get great use out of, like a ceiling fan. Sure the ceiling fan costs $99 at Home Depot and says right on the box that it only takes 5 minutes to install, but in reality it takes much longer, plus there is no box or wiring int he ceiling so that part is going to cost an arm and a leg.

        So now that great ceiling fan for the customer costs $400-500 and they aren't as happy anymore.

        There are some times when customers are happy. Last week I put an exhaust fan into the customer's man-cave so he could smoke cigars in the house, he was very happy and excited and gave me a tip. Often portable generator connections will make customers happy because they get a lot of value out of a relatively inexpensive service (in comparison to the automatic generator systems). So those types of customers are happy and are the ones to usually refer us.

        But what about all the other jobs in which there's no much for the customer to get excited about? Rus Sells and everyone else, if you needed an electrician for some mundane task, what would he have to do to "Wow" you? If you need a receptacle installed or 4 recessed lights put in your dining room or a ceiling fan hung, what would make you happy and drive you to refer the electrician?

        I already spoke about being extremely neat and cleaning up well, that's a big one IMO.

        Whenever I open a panel I will tighten all connections and talk tot he customer about it (whether everything was tight or not, whether the correct breakers were used, if the panel is getting too full, etc. And I don't do that just to sell, many times I just say "I re-tightened all the connections in your panel, they were all snug and everything in the panel looks good".

        So what else would you suggest I do (or have my men do) for those customers that seem like they will never really be happy because the cost of the job is high?
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        • Profile picture of the author Claude Whitacre
          Originally Posted by Electrical View Post

          But what about all the other jobs in which there's no much for the customer to get excited about? Rus Sells and everyone else, if you needed an electrician for some mundane task, what would he have to do to "Wow" you? If you need a receptacle installed or 4 recessed lights put in your dining room or a ceiling fan hung, what would make you happy and drive you to refer the electrician?

          I already spoke about being extremely neat and cleaning up well, that's a big one IMO.

          Whenever I open a panel I will tighten all connections and talk tot he customer about it (whether everything was tight or not, whether the correct breakers were used, if the panel is getting too full, etc. And I don't do that just to sell, many times I just say "I re-tightened all the connections in your panel, they were all snug and everything in the panel looks good".
          I can only speak for myself. If you are on time, your costs aren't higher than promised, and you explain everything you did....I'm a very happy camper.

          If you want to WOW a customer, do some small task (like tightening connections) mention it to them at the end, and don't show it on the bill.

          Even a little thing like that carries a lot of weight.
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        • Profile picture of the author Rus Sells
          Do your technicians wear boot/shoe covers every time they enter a customers home?

          Originally Posted by Electrical View Post

          I think my field is especially hard to get customers to like you for a few reasons. First, we are expensive in comparison to the other trades. Insurance and licensing costs are the highest as are the wages for skilled and experienced men. So while many customers think we are driving our Ferrari's to the marina and getting on our yachts, in reality our profit margin is no higher than their painter or carpenter.

          But they're painter or carpenter make huge changes to their house, things they can see. The electrical work we do is usually behind the scenes. Our bread and butter is service work, those small 2-5 hour jobs. A customer wants a new outlet on their wall behind their TV or microwave, to them it's just a 50 cent outlet that they see on the shelf at Home Depot, but to us it's $50 in material plus many hours of labor. So when we charge $400 for it, no one is really happy.

          Sometimes we install something that a customer could see and get great use out of, like a ceiling fan. Sure the ceiling fan costs $99 at Home Depot and says right on the box that it only takes 5 minutes to install, but in reality it takes much longer, plus there is no box or wiring int he ceiling so that part is going to cost an arm and a leg.

          So now that great ceiling fan for the customer costs $400-500 and they aren't as happy anymore.

          There are some times when customers are happy. Last week I put an exhaust fan into the customer's man-cave so he could smoke cigars in the house, he was very happy and excited and gave me a tip. Often portable generator connections will make customers happy because they get a lot of value out of a relatively inexpensive service (in comparison to the automatic generator systems). So those types of customers are happy and are the ones to usually refer us.

          But what about all the other jobs in which there's no much for the customer to get excited about? Rus Sells and everyone else, if you needed an electrician for some mundane task, what would he have to do to "Wow" you? If you need a receptacle installed or 4 recessed lights put in your dining room or a ceiling fan hung, what would make you happy and drive you to refer the electrician?

          I already spoke about being extremely neat and cleaning up well, that's a big one IMO.

          Whenever I open a panel I will tighten all connections and talk tot he customer about it (whether everything was tight or not, whether the correct breakers were used, if the panel is getting too full, etc. And I don't do that just to sell, many times I just say "I re-tightened all the connections in your panel, they were all snug and everything in the panel looks good".

          So what else would you suggest I do (or have my men do) for those customers that seem like they will never really be happy because the cost of the job is high?
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  • Profile picture of the author umc
    I personally wouldn't text, but that's just me. I think you need to have more of an ongoing relationship to go that route. Since you have their email addresses, why not email them to follow up and make sure that everything is working well and maybe give them some special way to contact you should they need anything else. While you've got them, ask if they know of anyone else that you could help. Maybe even send them a special coupon that they could give to a friend in need of your services. That way they get to be the hero to someone else and play the role of connector.
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  • Profile picture of the author bizgrower
    Dan and Claude and umc hit it. Take notes on the customer. (Read some Harvey Mackay)
    What is in their house. What is important to them. What their kids interests are.
    Then rob the place.LOL

    Seriously, take these notes so you can buy them or treat them to something
    they will like. Autographed photo of a kids favorite athlete or singer...

    Send birthday cards or something similar systematically through the year.

    Maybe offer the newly referred customer (all new customers?) some valuable
    add on that does not cost you much. Upgrade on a thermostat or type of light switch - or
    something like that.

    I saw Scott speak and highly recommend his book (No Affiliation):
    Embracing the N.u.d.e. Model - The New Art and...Embracing the N.u.d.e. Model - The New Art and...
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  • Profile picture of the author nesterdwarf
    I read over everything posted a couple of times and didn't see this asked or answered. You say that you are collecting your customer's email addresses, but are you doing anything with them? Some sort of monthly tips newsletter on electrical issues, ways to save, etc. This would give you a way to stay relevant and present in their subconscious so that when the referral opportunity presents itself, you are immediately the name that comes to mind. Much better than just hoping they remember your name 2, 3, or even 6 months down the line. You would get more referrals because you have expanded the time that they think to refer you.

    I'd have to agree with you on not using SMS as a way to stay in touch. SMS marketing is more appropriate for immediate or recurring concerns such as where to eat, get a haircut, etc. That is why the read rates are so high, the NOW factor of it. And if your customer is having recurring electrical problems, I don't know if they'll be referring anyone

    About the estimates, I have two questions. First, if the estimate is costing you as much as you say, why do it for free? Is it because that's just the way it's done? Couldn't you collect even a $20 estimate fee that is credited to the project if they decide to choose you? That would weed out the ones just looking at price alone and even the ones that did pay it just to check prices would be more apt to use you since they already have skin in the game. And second, if you can be making a $129 service call, why isn't someone else doing the estimates? The estimate fee would even work to offset the cost of adding the estimator. And to keep it from interfering with the referral business, you can waive the fee - 'friend of a friend' special sort of thing - since they are so much more profitable and reliably open to choosing you. And that would work to ingratiate them to you even more.

    ND
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    • Profile picture of the author Electrical
      Originally Posted by nesterdwarf View Post

      I read over everything posted a couple of times and didn't see this asked or answered. You say that you are collecting your customer's email addresses, but are you doing anything with them? Some sort of monthly tips newsletter on electrical issues, ways to save, etc. This would give you a way to stay relevant and present in their subconscious so that when the referral opportunity presents itself, you are immediately the name that comes to mind. Much better than just hoping they remember your name 2, 3, or even 6 months down the line. You would get more referrals because you have expanded the time that they think to refer you.
      An e-mailed newsletter is something that I was thinking about starting. Something more informative than promotional so that customers don't see it as spam.

      However, writing this thing would be a huge undertaking. Everything from the content to the formating in order make sure that everyone can see it in their e-mail program.

      It's definitely something that I want to explore, I just figured the longer I procrastinate, the more e-mail addresses I will have lol

      About the estimates, I have two questions. First, if the estimate is costing you as much as you say,
      Estimates are expensive because it is unbillable time. I have to go out to the customer instead of them coming in to me like an auto repair shop. My time is fully monopolized on the customer, I can't just fit them in between other work while they wait in a waiting room like an auto repair shop does it.

      Estimates require me to spend time with the customer to hear their concerns, to educate them, to inspect their house to see what we can do and how we can do it, etc. Nevermind the time and fuel to get there and back.

      Like I said earlier, an estimate is going to take a minimum of an hour, sometimes 2. During that time, I could be working on a billable job making money.

      why do it for free? Is it because that's just the way it's done? Couldn't you collect even a $20 estimate fee that is credited to the project if they decide to choose you? That would weed out the ones just looking at price alone and even the ones that did pay it just to check prices would be more apt to use you since they already have skin in the game.
      We do it for free because we are looking to get more work right now. There are many, many people out there that will use us after we come and sell ourselves, but would have never paid for an estimate. Some people just won't do that because they know its standard for companies to give free estimates. It's just the way it is.

      However, when we are really busy with work, the first thing we do is start charging a fee for estimates. That weeds out the "tire kickers" greatly. But it also weeds out good potential customers as well. During busy times it doesn't really matter since we can't take on much work anyway, but when trying to build I don't want to lose them.

      FWIW, this exact thing is discussed in depth at contractor forums. What I explain above is what most contractors experience.

      And second, if you can be making a $129 service call, why isn't someone else doing the estimates?
      Someone else is out doing the service call. I'd rather do the estimate myself, at least for now. Maybe if I grow bigger I will hire an estimator but for now I like doing it.

      The estimate fee would even work to offset the cost of adding the estimator.
      Like I mentioned above, I can't charge the fee right now. FWIW, I believe a good estimator/salesman would cost me more than my journeyman electrician. He would need to have solid experience in both professions.
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      • Profile picture of the author nesterdwarf
        Originally Posted by Electrical View Post

        An e-mailed newsletter is something that I was thinking about starting. Something more informative than promotional so that customers don't see it as spam.

        However, writing this thing would be a huge undertaking. Everything from the content to the formating in order make sure that everyone can see it in their e-mail program.

        It's definitely something that I want to explore, I just figured the longer I procrastinate, the more e-mail addresses I will have lol
        Yeah, you wouldn't want to be sending them ads constantly

        All you'd need is a template from a decent email provider which would take care of all your formatting (it's their business that the email gets seen ), 3-5 relevant article which would be source material for the newsletter 'blurb' that then links to the article, a couple of pictures and the emails. Outsource it for less than $50/month (including the cost of the account)...after 6-12 months you could even lower that as you'd have a 'catalog' that you could choose from.

        And yes, you'll just keep getting more emails, but that also means more people that will be 'turned off' by the email. And really, you don't even care if they read it...just one more way to wave at their subconscious

        Originally Posted by Electrical View Post

        But what about all the other jobs in which there's no much for the customer to get excited about? Rus Sells and everyone else, if you needed an electrician for some mundane task, what would he have to do to "Wow" you? If you need a receptacle installed or 4 recessed lights put in your dining room or a ceiling fan hung, what would make you happy and drive you to refer the electrician?
        Originally Posted by Electrical View Post

        So what else would you suggest I do (or have my men do) for those customers that seem like they will never really be happy because the cost of the job is high?
        WOW things -

        1) Free Electrical Safety Walk-Through

        Check for all the fire hazards - frayed cords, over-loaded sockets, lack of GFC where appropriate, etc. This gives you the opportunity to upsell with onsite deals - 3 sockets for the price of two, etc. You are already there, might as well get as many sales as possible.

        2) Free Carbon Monoxide Detector

        Just a quick search and you can get these for $7-8, two or three screws and you are done. While it wouldn't be free, how much would they talk about you the next day? And it would also offer something visible to remind them of that nice electrician This is where SMS and/or email could be useful to setup a 'battery reminder' system. Every 2-3 months send a reminder with a previous customer discount (Of course batteries don't run out this often but better safe than sorry ) And if you are into the 'touchy feely' - just think, you might actually save somebody's life

        The other way you might use SMS, voice messaging, or even email to a lesser degree, to help offset the 'cost' of doing the free estimate is to email previous customer's in the area and offer an 'in the neighborhood' discount. That would turn your 1-2 hours of 'wasted' time into an opportunity to get some work plus offers 'social proof' that reinforces your customer's choice of you as their go-to electrician.

        ND
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  • Profile picture of the author bizgrower
    You could hire an estimator for the smaller jobs, and you do the estimates for the larger.
    And, you could set it up so the estimator does not replace you - opens the door for you
    if that project is worthwhile for you. This way he/she does not need to be so high level
    and it's a better use of your time?

    Also, you are working on other marketing more than relying on referrals?

    Dan
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  • Profile picture of the author bizgrower
    Be on time

    Work really clean as you say you do

    Get the work done as scheduled and in a timely fashion
    (I understand unforeseen circumstances/parts needed, but can't stand
    tradesmen who schedule two or three jobs at the same time and do
    a little work on each one each day - or whatever excuse to leave
    without finishing in a timely manner.)

    Get the work done as close to estimate as possible.
    (I understand legit changes, but can't stand excuses like "I underestimated
    how much paint, can I have a couple hundred more for more paint.)

    All employees should be neat appearing, and not leering at the wife or daughter.

    No drug or alcohol use evident while on duty. (I do realize sparkies are not usually
    like other trades.)

    Emphasize that you are licensed, bonded, permitted, and insured and do criminal background
    checks on all employees. (A Denver contractor - home remodeler I believe - unknowingly had a child
    molester on payroll. It was something like that.)

    I think maybe do put extra touches/free upgrades on the bill, but marked No Charge.

    Above average warranty. Maybe sometimes do some or all warranty work at no charge, or
    no charge for the parts, or no charge for the labor.

    Overall convey you are the electrician they want on their property.

    Maybe you can think of some other WOW touches you can afford that other electricians don't do.
    I know of a custom homebuilder who would do things like give customers a free hot tub if he built
    the space for one as part of the contract. (Must have been when times were really good. I think
    he did 4 to 6 homes a year because he was a craftsman as well.)

    I know of a restaurant that filled their off days up with a "lucky random winner" of a free
    meal. They did this on the second Tuesday of each month. Again, come up with something
    similar in your field.

    Price break in the off seasons to keep your guys busy.

    Dan
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