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Referral Marketing for Service Contractors: Finding Your First 100 Customers

FieldPulse | November 28, 2016


With the right referral marketing plan, however, you can quickly turn that first customer in to the first 100 and then 1,000. By using the trust you build on an individual level with those first-quarter customers, you’ll develop a bulletproof reputation that will translate into guaranteed business. By creating the proper incentives and using the good work you do to your fullest advantage, you can kickstart your business development. We’ll show you how.Service contractors run on trust, and what embodies trust better than a referral? As a service contractor, you’re working in customer homes or on their properties, repairing, installing, building, and working in spaces that are often considered personal or vulnerable. This makes entering the service business market hard, as it takes time to develop a trustworthy reputation. Business development is all about inertia, and developing your first 100 customers can be a slow process without breaking the bank on marketing.

Understanding the Psychology of Referral Marketing

Before you go about building a referral program and creating reward systems or coupons, it’s important to understand why referrals work. There are two sides to an effective referral program and, if you don’t acknowledge them both, your program won’t be as effective as it could be.

First things first, though, there’s one big thing to understand: As a baseline, you have to provide great services. You can’t do a lazy job and expect your marketing to make up for it. You won’t get a referral from a bad job, even when you sweeten the pot with a large discount or cash back. Referral marketing can’t fix a bad business, but it can make a good business better with a bit of social engineering.

Referrals have to be attractive to customers on both sides of the equation. They need to create a perceived benefit to the person making the referral, and one for the person they refer your services to. When a customer gives a referral to a friend or family member they’re staking their own reputation on the quality of service you provide, which most people are reluctant to do. In order to overcome that initial hesitation you need to provide an incentive that aligns with their long-term desires and rewards their loyalty.

You can promise the moon to your existing customers and still see no engagement from the referred customer if you don’t provide the right hook for them as well. As a new business, a referral is a strong tool to overcome brand unfamiliarity, but there are still measures you can take to overcome their initial hesitation.

Instead of focusing on flat discounts, attract the new customer with satisfaction guarantees. Reduce their perceived risk by giving them the option of getting their money back, and incentivize recurring service with a discount on subsequent calls. This is an ideal way to make referrals ‘stick’ while developing the social proof needed to launch a new business.

With these principles in mind, now let’s look at the specifics of putting them into practice.

Marketing Referrals Online

One-time discounts are great for as-needed services (repair, installation, etc), especially when they’re provided without a limiting expiration date. For recurring services, where it’s assumed you’ll be in contact with that customer on a consistent basis, a small-but-ongoing discount is a great way to reward continued loyalty. Mixing and matching these ideas (providing a flat 5% off for ongoing services and a one-time 40% discount on their next service call for a strong referral, for example), can create a powerful hook for the customer.

Centering your referral marketing practices around your online presence is an easy way to streamline the process. We’ll cover post-call and mail-in marketing later on, but most of our focus will be on the digital side. If you haven’t checked out our guides on Facebook, Yelp, and setting up your own website, make sure to give them a quick read. If you aren’t familiar with digital marketing, but you’re looking to learn, we have a basic guide to marketing jargon, too.

Across your digital platforms, look at integrating your referral deal language into your static on-page content. This includes your call to action button on facebook, your cover images, a pinned tweet on Twitter, banners on various platforms, and your Yelp deals on your Yelp page. Until you’ve developed a steady audience, static content that users are exposed to as a part of their discovery process will be more effective than posts or updates on social platforms. This will help you set your hook for your initial customer base, and generate interest in the referral deal, creating space for the second half of the offering: the new customer hook.

There isn’t much you can do to influence how and when a customer shares a referral offer without coming off as invasive or manipulative, which means you’ll have to trust your customers to communicate the deal accurately. You can give them shareable links and use digital tools to make tracking and sharing easier, but most of their sharing will still be conversational. You need to put a lot of effort into making a clear, easy to understand offer that’s easy to share with zero ambiguity. Simple wording, parallelism, and a clear benefit statement will help.

Your referral marketing campaign shouldn’t be your only marketing push, and it’s best to run it concurrent to your initial launch-marketing in order to attract your initial customer base. Diversified approaches are often the most effective, and a mix of static/on-page CTA referral marketing paired with traditional social/local influencer marketing is a great way to cover both approaches.

Post-Call Referral Marketing

While digital marketing makes referral programs easy to track and manage, it’s important to remember the value of post-call followups. There are tons of ways you can integrate referral marketing with your post-call system to cultivate a strong customer base.

Dollar for dollar, email-based followups are the most affordable, as they allow you to automate the majority of the follow up process, however they’re limited by low open and click-through rates and they don’t feel as personable as a letter or postcard. When you’re building your initial customer base there’s an immense benefit that comes with non-scalable personalized communication, and the time you spend building a relationship with one customer can help you attract more.

Avoid hard sells in your post-call material and focus on the relationship that you have with the customer. Present the discount or incentive that you provide as a gift instead of an opportunity and keep the focus on the customer; if they had a good service experience, they don’t need you to sell yourself to them all over again. The referral incentive should be presented as a natural extension of the discount or reward that you give them, and the call to action attached to it (encouraging them to refer new customers) shouldn’t be aggressive.

Developing a print campaign can take time, but for small businesses that time is worth it. The overall strategy relies on developing trust and finding a consistent customer base that multiplies your initial marketing efforts. It’s easy to fall into a cycle where you’re focused on growing your customer base without consider the quality of the customers you’re attracting, but the time you spend here pays off in the long run.

Your First 100 Customers

The idea of relying on non-scalable methods to build an initial customer base is common, but it’s particularly applicable to service businesses. Referral marketing lets you use your initial customers as a marketing tool, leveraging their satisfaction for new contracts and consistent work. It produces solid metrics, it reflects well on your company, and it helps you stand out from the competition.

A good marketing plan confirms the quality of what it sells and creates a perceived unique benefit. When a business is young and can’t rely on brand recognition or customer consensus to articulate the quality of its services, focusing on customer satisfaction and the unique benefits of customer loyalty is a reliable way to earn customers and it will pay off in the long run.

Building your customer base takes time, but with the right approach and a healthy measure of patience you can create lasting customer relationships that multiply in value over time. Creating a strong referral program for your initial customer acquisition period will accelerate your business growth. You’ll have your first 100 customers in no time.

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