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Reference Check

MoenOnSiteJune2014 Reference Check

From grand estates to urban homes, building a strong referral list is one of the most important projects any builder has. Photo by Linda Oyama Bryan, courtesy of Orren Pickell Building Group.

The rewards of word of mouth.

For Lisa Pickell, a custom builder of luxury homes, the final walkthrough on a client's new home is really just the beginning. From there, Pickell looks to expand that relationship and generate new ones by getting referrals to new leads.

"Referrals are the best way to garner new business," says Pickell, whose firm, Orren Pickell Building Group, is based in Northfield, Ill. "The potential client is already familiar with the company, and you have at least one good recommendation going for you already."

In fact, many firms manage to expand on referral business alone. Doing so can be more profitable — and cost less — than the scattershot method of print or even online advertising. The reason why is simple: instead of having to establish a new relationship every time you want a job, you've already got a connection to build on.

"It starts with the first build," says Cijaye DePradine, a business consultant with Cijaye Creative in Seattle, Wash. "Do a great job there, and you really increase your chances. Referrals are important because they show you do great work. It's a sign of loyalty."

Stay in touch

Doing a good job, then, is a given. But that's not enough — you've got to stay in touch with your clients, and give them reasons to recommend you to their friends. For some, that might mean traditional means, such as cards at the holidays or periodically checking in on how a new home is holding up. Others, such as Pickell, incorporate additional revenue sources into their core business to help stay in touch, too.

"Our biggest driver for keeping in contact with our clients is our maintenance program," Pickell says. "We offer to bring in our team of experts twice a year to tune up your home, and take care of the honey-do list. Then, it's just a matter of reminding your customers that if they're happy, the best thanks they can give is a referral."

Referral bonuses, either as a discount on current work for a successful referral, or a gift card or other incentive to get people to recommend you, can pay you back, too. A plethora of online tools such as Angie's List, Yelp and even Craigslist now help make this easier than ever.

"ReferralKey is the one that comes to mind most," DePradine says. "It's integrated with LinkedIn. If you have all your clients in your LinkedIn network, you can offer them a referral bonus directly through the system, which they use to get business to you."

Respond quickly

Once you get a referral, don't let it sit. The most important aspect of referrals is to act on them as soon as you get them, to show the prospective client that you mean business.

"The best way to convert any lead is to work quickly and professionally to help the client achieve their goals," Pickell says. "It also then gives you an opportunity to contact the referring party again — and find more potential work — when you thank them."

Following up is important, too. "If you don't get them the first time, follow up, maybe once every two to three days for two weeks," DePradine says. "If that feels too pushy for you, try spacing it out to once a week."

Use different channels to reach them, too. Don’t assume they'll see your email, or that they listen to their voicemail. Try all channels until you get a response.

"It may seem pushy — but persistence shows clients how hard you work," DePradine says. "Even if it turns some people off, it will inspire more than you think. It's the same reason email marketing is one of the best conversion tools you can have."

That's an idea worth referring to.