Referral Program
A properly set up and managed referral system can be one of the most effective and economical lead generators that you can use in your business.

Most contractors that track their advertising money and the leads it generates will tell you that a lead costs between $300 and $500! If your closing rate is 50%, than a sale costs you $600 to $1,000!

With a good referral system, you will give $300 for a referral that results in a sold system. And don't forget a referral that is handled properly will result in a much higher margin than a regular lead.

Here is how you can do it. First, you need a letter to your customers explaining your referral program. and the rewards it will bring to them. Then, you will need business cards that tell the prospective referral what they will get when they do business with you.
The Letter:

To our valued customer,

First, we want you to know how much we appreciate your business. We also want you to feel free to call us and let us know if we have not performed to your satisfaction. This is very, very important to us.

Next, we want to explain our referral program to you. Every person that you refer to us and they use us for service, we will give them a 30% discount on their first service call and we will send you a $20.00 gift certificate. For every person that you refer to us and they purchase a new system, we will give them a 15% discount on the system and we will send you a check for $300.00.

All during the year, we will keep score on how many referrals we get from each customer. At the end of the year, we will send the winner $5,000. We have included (25) business cards that you can give to friends and relatives when referring them to us. Each card explains the discounts and instructs the customer to give the card to our tech to receive their discount.

Please be sure to put your name and phone number on the card so we can send your reward. If you need more cards, please let us know!
The Cards:

Front side of card: The usual information about the company. Plus a place at the bottom instructing the person doing the referring to put their name and phone number.

Back side of card: To our new customer: When you use ABC for service the first time, you will receive a 30% discount. When you use ABC for a replacement system, you will receive a 15% discount. Please be sure to give this card to our technician to receive your discount.
Every service technician must have a supply of these envelopes and they have to give an envelope to every customer they call on. The tech also has to explain what it is all about and above all, thank the customer!

If you have four techs, they will each do about 1,200 calls a year. That means you will get this program in the hands of 4,800 customers per year! If only 10% of them get you one new customer a year, that is 480 new customers a year!

For system replacements, this program should be presented when you do the quality check after the install. At that time, you give the customer a fire extinguisher for their kitchen, in appreciation of their business. Also, you give them a check for $76.27 and explain to them at the end of their job, your company found that it had cost them $76.27 less than they had estimated, so you are getting a refund! This is also the time to ask for a five star review.

This is the most economical way to get new customers, but you cannot do it for a few months and then let it 'slip through the cracks'. If you do it consistently, you will be surprised at the results. Remember, it is all about execution!

If you have any questions, please do not hesitate to call me.
 
Thanks for all you do and as always “Expect More From Us”!
 
Thanks,
Bruce Martin
Dealer Business Consultant
Value Added Distributors
(757) 469-1205