how's your refferal program work?
Posted By Tim Hawver on 1/4/2009 at 9:19 PM
Many of you have such a program and I was wondering how it works and your success with it. Am interested is starting one but thought I'd first get some ideas here.
thanks
Re: how's your refferal program work?
Posted By Con Schultz on 1/4/2009 at 10:35 PM
Hi again Tim
ours calls for $10 to each referrer & the receiver - total $20
we also have a separate program for realtors of 75/ft free - either for the realtor to give to his needy client, or for him to stack them up & use at home or moms etc. if using realtor program - print them on bus cards! it makes them easy for them to give away then - but they must sign the card so we know to credit their account.
Con
Re: how's your refferal program work?
Posted By Carpet Dude on 1/5/2009 at 12:42 AM
do a great job and you get refered, period.
I tried a few tricks and gimmicks and found most customers if not all were motivated to refer my services simply by receiving old fashion HONEST reliable service.
Re: how's your refferal program work?
Posted By Dominick Cassano on 1/5/2009 at 12:48 AM
I agree. I think gimmicks are cheesy and tacky. Trust me, ten dollars isn't gonna motivate a high end customer. If anything, it'll make them look down upon you, or even worse, it'll offend them. Instead, blow them away with over the top customer service and a "no holes barred" cleaning job. Then on the way out, politely and assertively hand them a stack of cards and ask for referrals. It makes you look alot more confident that way. Trying to buy a referral with $10.00 or any money at all makes you look like you're not confident enough to deserve the referral on your own merits.
Modified By Dominick Cassano on 1/5/2009 at 12:56 AM
Re: how's your refferal program work?
Posted By Bill Soukoreff on 1/5/2009 at 1:03 AM
I agree with Rafael and Dominick. However, I send them a hand written thank you card. Nothing beats that.
Then I take note of it. A year later when I clean for them again, I take 10% of the job they referred and apply it to the invoice. I make no big deal about it. It is not the money saved that impresses them, but rather that you remembered even a year later. They are ecstatic. That is how you create viral marketing and create long lasting relationships.
Re: how's your refferal program work?
Posted By Dominick Cassano on 1/5/2009 at 1:08 AM
Bill, the thank you card is a nice touch and a definate necessity to separate your classy operation from those hit and run fly by nights. Your customers will definately notice that little token of gratitude. I used to have to send them out manually before but now i'm hooked up with sendoutcards.com and i'm not looking back. One of the best business decisions i've made recently. In my opinion, sendoutcards.com is a no brainer.
Modified By Dominick Cassano on 1/5/2009 at 1:11 AM
Re: how's your refferal program work?
Posted By
http://www.com on 1/5/2009 at 1:51 AM
When I doubled my prices I had a referral of $50 for each job completed.
Re: how's your refferal program work?
Posted By Steve Cameron on 1/5/2009 at 7:04 AM
What would really help is when you guys post your Marketing secrets you also post the # of years in business and the # of trucks running, along with some financials.
This might help us to determine whose refferal system is working the best.
Re: how's your refferal program work?
Posted By Fred Gruber on 1/5/2009 at 7:16 AM
I used to send a $10 off coupon for each completed referral. It was working well until I had people give me 3-4 names when I asked them who referred me. I wasn't sending $30-$40 out for 1 referral.
I am now sending out a 10% referral reward to realtors. I send coupons to the realtors to give to their clients. The coupons give one free room up to 150 square feet of carpet cleaning compliments of __________. I print these coupons on my computer and customize them for each realtor. I get 1-2 new homes sales a month and a few who clean before having an open house.
After the job is complete, I send the realtor their money (usually around $15-$20). It buys them lunch at the very least.
Modified By Fred Gruber on 1/5/2009 at 7:19 AM
Steve CCcccccccccccccc.....
Posted By Carpet Dude on 1/5/2009 at 7:53 AM
12 years in business
One HWE Tm van
One DaddyMommy mini van, often used for VLM, pick kids up from school, errands, supply run, etc.
I wish not to disclose financials publically .
Re: how's your refferal program work?
Posted By Steve Cameron on 1/5/2009 at 8:02 AM
Fred... that is a excellent procedure. I will follow your example. Thank you.
Carpet Dude..... you are right...good, hard, honest work will provide a stream of refferal jobs. But, will it provide a steady stream of work.......enough to add a second truck?
Re: how's your refferal program work?
Posted By Howard Partridge on 1/5/2009 at 8:06 AM
Tim,
My carpet cleaning company generates anywhere from $40k to $60k in NEW business EVERY month from automatic referrals. And it is ALL high end. We charge 62 cents per square foot on average (and that does not include carpet protector).
Sure, you can get referrals by doing a good job, and you can get even more by marketing to your past clients.
BUT... you will get MORE referrals and you will grow you company FASTER with a Referral Reward Program.
And anyone who says that high end clients don't care about referral rewards just don't know what they are talking about. If you search "Howard Partridge" on You Tube, I have a video that shows the massive number of referral certificates that are turned in to us. The referral certificates keep them coming back to us in addition to referring us.
Now keep 2 things in mind:
1. The reward program is only part of the program. You also need to build powerful relationships with referral sources. And of course you need to offer outstanding customer service and build a great reputation for yourself.
2. You must use the right kind of referral program. $10.00 is NOT enough to motivate high end clients and referral sources (important!)to refer, but 10% is and I have proven it. Plus, carpet cleaners world-wide have used my system to double and triple their businesses.
Do NOT listen to people who are too short-sighted or too lazy to implement a strong referral reward program.
Here's an excerpt from one of my manuals. You will need a referral certificate and some other materials, and you should not try to create them yourself, but I can't "sell" here, so we will leave that right there.
Also... if someone sends you a referral certificate, it is most likely mine since I am the one that created the referral certificate program in our industry. Many people have copied it and are breaking the law. I have not chosen to prosecute (yet), but be careful not to copy intellectual property.
Here's an excerpt of my Referral Reward Manual...
Posted By Howard Partridge on 1/5/2009 at 8:07 AM
Here's the excerpt from my manual:
"To maximize your referrals, you should definitely offer a financial reward. You will get more referrals and your advertising dollars will go down. Sure you can get referrals without a reward, but you will get much more if you do.
You may have thought about different ways to reward those that refer you and you may have even tried different reward techniques. I have been fortunate to be involved in referral marketing for over 24 years at this writing. Over time I tried every known way of rewarding for referrals. I tried cash, I tried discounts on future cleanings, etc.
Over that period, I developed a simple, but phenomenally successful reward system. Here’s how it works…
a) 10% Referral Fee for new clients only. A 10% referral fee is offered to anyone that refers a new client to our company. This is for new clients only. After they have used us once they become a repeat client.
b) Issue Referral Certificate – a certificate for 10% of the amount the new client spent is issued to the referring party automatically. They don’t need to know about the program. You simply mark down who referred the client at the time you book the job. You need this information for accurate marketing planning anyway. Send the referral certificate (enclosed) to the referring party.
c) Redeemable for Cash or services – The referring party may cash the certificate in by returning it to you, or they may apply it toward a future cleaning job by presenting it on the jobsite.
d) Valid for 1 year – The certificate expires one year from date of issue. The reason for the expiration date is to encourage them to clean every 12 months and to keep from creating an unlimited financial liability.
2) Questions and Answers
a) Why 10%, not $10.00? If someone refers a $2000.00 job to me, will $200.00 or $10.00 have more impact on them? If they have one $2000.00 client, chances are they have more. I want their attention! If I were to offer a 15% discount on their next cleaning (another popular but totally ineffective means of rewarding), and the new client spent only $100.00 with me, but the referring party had a $1000.00 cleaning bill the next time they cleaned, I may be offering $150.00 for a $100.00 job. Not good math.
b) Why cash? Why not just limit the reward to cleaning? Because there are many referral sources that are in a prime position to send you many, many valuable clients, but have no interest in cleaning. Case in point: A carpet salesperson that has a prime opportunity to refer you practically every day lives in a rented house. Plus, he could not possibly use that much cleaning. What he is interested in is cash. Gas money. Dinner money. Whatever. Money talks.
c) Why use a certificate? Why not use cash or a check? There are some referral sources that have a conflict of interest and they cannot accept a referral reward (insurance agent, some Realtors technically can’t), or they somehow feel uncomfortable accepting a reward. If you send cash, you have put them in an uncomfortable position. The certificate is completely transferable and may be passed on their client or anyone else of their choosing. Another reason you don’t want to use cash is because it diminishes your returns which will be revealed in the next point. The reason you don’t want to automatically send a check is because of reasons just discussed, many of those checks will never be cashed, creating a bookkeeping nightmare for you. Our experience is that less than 50% of the certificates will be cashed even though the referral source appreciates the acknowledgement . This brings me to the next point…
d) 20 to 1 return – If you offer a 10% referral fee, and only half are redeemed, that gives you a 20 to 1 return. Not bad considering that the best campaigns in traditional advertising most often times don’t even produce a 4 to one return! Even if you offered 20% and every single one was redeemed, you would have a 5 to 1, guaranteed return! Of course you could choose not to pay a referral fee at all, but my experience has proven that would be unwise.
e) Referral Certificates – The Referral Certificate is included in this program.
f) Referral Fees: Is a referral fee legal? What is the difference between a “kick back” and a referral fee? A “kick back” is illegal. This is when you reward an employee or someone that has a an “interest” in the company that does the work. Example, let’s say that an employee at a commercial account that we call on is instrumental in getting the contract secured for us. We cannot reward this personal financially! That’s illegal. Or, rewarding an insurance agent for awarding a claims job to us is illegal.
g) Be sure to check with your CPA on whether you need to issue a 1099 the individual if they are redeem more than $599.00 in cash during a calendar year.
h) Multiple Referrals – What do you do if more than one person referred you? You can either issue all referring parties a certificate (let’s say there are two). If your redeem rate is 50%, you still have a 10 to 1 return. If they both redeem, you still have a 5 to 1 return. Or you may elect to reward the first party that referred the new client.
i) What if they can’t accept a fee? If your referral sources is in a position where they have a conflict of interest, let them know that the referral certificates are sent automatically and they can choose whether they would like to pass it on to their client, give it to someone else, or simply discard it.
j) What if they say “I referred you, but never got anything?” You may print your referral certificates on duplicate and keep a file, and/or simply refer back to where you notated the referring party (covered in the tracking section), and cross reference your check register to insure that it hasn’t already been redeemed. Them, by all means honor it, even if it has expired. The whole purpose of the reward program is to encourage referrals, not to find a way not to pay!!"
Modified By Howard Partridge on 1/5/2009 at 8:07 AM
Re: how's your refferal program work?
Posted By Steve Salas on 1/5/2009 at 8:32 AM
Good points here. But I especially like Mr Partridges. Why? Because he has a company that walks his talk.
Steve
Re: how's your refferal program work?
Posted By Steve Cameron on 1/5/2009 at 9:56 AM
Howard says,
"Also... if someone sends you a referral certificate, it is most likely mine since I am the one that created the referral certificate program in our industry. Many people have copied it and are breaking the law. I have not chosen to prosecute (yet), but be careful not to copy intellectual property."
Now Howard,
we were doing this in 1978 while you were still cooking Chicken . We just never took it to the next level like you have.
I think you owe me some royalities.
Re: how's your refferal program work?
Posted By Tim Hawver on 1/5/2009 at 1:21 PM
Thanks everyone for all that great info. When I got started 5yrs ago I planned setting up a reward program for my realtor friends and concidered sending them 10% of the profit of the job they referred. I wasn't going to send 5-10 dollars for the reason Howard mentioned. I would rather get nothing then have someone send me 5 or so dollars for a 1000.00 job I had given them. In fact, I did get a 5.oo reward from an insurance company that now insures a customer I sent to them. I was not expecting anything but 5.00 is almost an insult.(almost)
Re: how's your refferal program work?
Posted By Howard Partridge on 1/5/2009 at 1:40 PM
Steve,
Man, why didn't you let me know back then??? You could have saved me years of heartache and trial and error!!! (LOL!)
I would have PAID you for something like that. And now you could be getting all the heat for being a "marketing guru" instead of me!
Next time you create something worth having, would you please let us know so we can buy it from you?
By the way, in 1978 the ONLY think I knew how to cook was fried baloney sandwiches.
See ya, and thanks for setting the record straight. (:
Re: how's your refferal program work?
Posted By Ades Gros on 1/5/2009 at 1:52 PM
Right now mine has been like rafael.
Do a great job and they will tell the next person.
Ades
Re: how's your refferal program work?
Posted By Jim Williams on 1/5/2009 at 1:55 PM
I have tried the HP method, but very few seemed interested in redeeming the coupons so I dropped it and still get tons of referrals.
If I was looking to build a multi truck business I would use it but I have enough referrals to keep my schedule full without it.
I have learned tons from Howards modules about marketing though and owe much of my success to him. Thanks Howard!
Steve Salas......
Posted By Carpet Dude on 1/5/2009 at 2:15 PM
I can't see were you are currently operating.....but I can take a good guess Howards demographics will out pull your demographics all month long. Why? Perhaps Howards demo's have more income per and more disposable income...I may be wrong though.
Re: how's your refferal program work?
Posted By Howard Partridge on 1/5/2009 at 2:33 PM
Thanks Jim! And a good point that is brought up. What you want to do is first track the number of referrals you have coming in now. Implement the program for a year and really promote it and send those referral certificates out on a regular basis.
If you are getting MORE referrals and no one is cashing them in, dance for joy! If you are getting MORE referrals and people are cashing them in, that's great
too.
The only time I would question it would be if it makes NO difference over a year's time.
Thanks!!!
Howard Partridge
President
Re: how's your refferal program work?
Posted By Badger on 1/5/2009 at 5:29 PM
Howards referral programs are he real deal. I remember the first time I ever heard how to develop ref sources was from Howard and now we have all the ref. sources locked down in our town.
Re: how's your refferal program work?
Posted By Howard Partridge on 1/5/2009 at 5:37 PM
Dusty came to my first PAID seminar and we have become great friends too!
Thanks boss!
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