K+BB Collective | The Designers' Corner

Sep 19 2013

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Referral marketing: six steps to building a referral network

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Ask kitchen and bath designers what they believe to be their best source of new business and most will probably give you the same answer: referrals.

The only problem with referrals is you never get enough of them, so most designers cannot rely on customer referrals alone to keep their businesses going. What you can do, however, is maximize the number of referrals you get. But that takes a process like the six-step process outlined in this article.

Step 1 – Build a list.

You may already have a list in your head, but you need to write it down. Take some time to identify those people who know you, like you, trust you and would be willing to refer you to potential customers. This would include friends and family, past customers and your professional network. Your professional network would be people you do business with – remodelers, plumbers, electricians, appliance dealers and cabinetmakers. It would also include professionals like your accountant and lawyer.

This is not a list you would buy or rent. Keep it simple. Jot down names, addresses and emails for the people you know, then expand on this list over time.

Step 2 – Plan your outreach.

You need to reach out actively to these people to ask for referrals. You can’t just do it once – you need to reach out on a regular basis. The two best methods for this are email and direct mail. Email is fast, simple, cheap and you can do it frequently without being a pest. Direct mail can be by postcard or short letter. It is more personal than email, but it’s also more time consuming, and you will incur printing and postage costs.

Step 3 – Educate your contacts.

You may be surprised to learn how little people know about your work. Past customers only know what they bought from you. Your professional partners may only know about their interaction with you. But there may be other parts of your business they don’t know. When you ask people for referrals, try to educate them about everything you do, and help them understand the kind of customers you can best serve.

Step 4 – Offer incentives.

When you offer incentives to people in exchange for referrals, you are more likely to get their attention – and more referrals. It’s also true, however, that incentives can bring in some low-quality prospects. To avoid too much dilution of your lead quality, use a two-step incentive. Offer something small (a $5 coffee card) for each referral you receive and a larger gift, such as a gift basket or gift certificate, when the referral becomes a customer.

Step 5- Say thank you. 

Whether or not you use incentives, be sure to say “thank you” for the referral. A handwritten thank you note is ideal. A phone call is good, but make sure you speak directly to the person. Don’t leave a message, and don’t leave this to email. Even if you do not offer incentives before a referral, you might want to send along a small gift as part of your thank you.

Step 6 – Return the favor. 

Your business partners are more likely to refer you if you do it first. Look at your professional network list, and think about what they do and who they serve. Make an effort to think about them when you meet prospective customers. Encourage your customer to use your name when they call your contact.  Plus, there’s nothing wrong with telling your business partner that you sent someone their way.

Bob McCarthy is a direct response marketing consultant and president of McCarthy & King Marketing.  He can be reached at 508-473-8643.  If you visit his website (www.mccarthyandking.com/kitchen-and-bath-marketing), you can download a FREE copy of The Kitchen & Bath Marketing Handbook.

This entry was posted on Thursday, September 19th, 2013 at 9:37 AM and is filed under Business, Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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