Chapter Corner

Why Customers Want to Give You Referrals - and Why They Won't

Posted in: Management Methods, May/June 2013

There is no better way to gain customers than through referrals. A customer's personal recommendation adds strength to your marketing program that money cannot buy.

Your relationship is under development the moment you get the prospect's name. You have to come through for both your original customer and your prospect.

You've got a small window when you need to make contact (24-48 hours), and you better be prepared to deliver the same level of service that brought you the referral in the first place.

What is in it for the customer?

Knowing that there is a lot at stake with referrals, let’s look first at your customers’ motivations. What is in it for them? Why would they want to give you referrals? Sales training expert David Holt points to four main reasons:

  1. RepairBC.gifThe hero factor – Your referral source has an opportunity to be a real hero to one or more friends or colleagues. If working with you truly has been a pleasure, he or she can “look good” by helping a friend or colleague learn about you. Remember — people prefer to find service providers through recommendations.

  2. It brings them better service – Your customers know that if they give you referrals, it will give you added incentive to provide them with even better service. Even though you attempt to give all your customers the best service possible, isn’t it natural that you will run a little faster and jump a little higher for the customers who give you referrals?

  3. They like you and trust you – If people like and trust you, they probably want to help you. This is the most powerful reason! If you have been serving them well, most customers get great pleasure from helping you become more successful. If you share your vision for success, they will enjoy seeing your success by helping you with referrals.

  4. They know that keeping you in business helps them – Help your customers see the benefits of you staying in business. You can help them as their needs change, and you will be there to cover their warranties and continued maintenance.

Your customers may also respond to the incentives you offer, such as a $25 discount off their next service or a free electrical safety inspection for each name offered.

Just remember, even if you do offer incentives, do not overlook the fact that what you are really offering are great products with great service from a great company. That’s the true incentive for referrals.

The Trust Component

When the customer trusts you, he or she begins to believe the things you say and will not worry about whether you will fulfill your promises. Your customer knows that a trustworthy contractor always fulfills promises. With their trust in you, your customers will be reluctant to try an unknown electrician.

As their trust in you grows, so does their confidence. They know what you can and cannot do. This confidence factor is important for two reasons:

  1. They will call you because they know you can fix it and your customer service representative will make sure their problem is handled; and
  2. They know you will take good care of their friends and family members.

Think about it ... would you ever tell your mother to go to a restaurant that didn't cook the fish correctly? Would you tell a friend to go to a store that treated you poorly or messed up an order?

People look out for their friends and family. You earn the right to ask for a referral by treating that customer with respect, honesty, and value. When they refer their friends and family to you, don’t think they are selling their friends’ names for a discount. They are looking out for them by providing them with a quality electrician with great customer service.

Same thing goes for online reviews and testimonials. If a customer is online in search of an electrician, they are more likely to choose one who has a lot of good recommendations and testimonials from previous customers. These can be a huge image builder and help generate more future sales.

Referrals are a good thing for you, your customer, and the new prospect. Everybody benefits when you get referrals.

Facing Customer Obstacles

Even if you are great at your job, some customers may be reluctant or unwilling to give you referrals. Here are the most common reasons:

  1. MoneyRefer.gifThey like the product, but do not like and trust the salesperson enough;
  2. They do not want to release a pushy salesperson on a friend or colleague;
  3. They are not clear about what you do and how you might benefit their friend or colleague;
  4. They pre-qualify their friends and colleagues for you even before speaking their names;
  5. They are afraid of upsetting their relationships;
  6. They do not want to appear that they are talking behind this person’s back;
  7. They cannot think of anyone at the moment, but may later; and
  8. They truly do not know anyone who could benefit from your service.

Remember, if you constantly bring value to your customers and create relationships where they like and trust you, objections will be rare; people will want to help you. If they don’t like or trust you enough, they probably will not tell you. And there is nothing you can do on the spot except to back off as they continue to resist. Then keep working hard to gain their trust.

Adams Hudson is President of Hudson, Ink, a Bronze Industry Partner and a national contractor marketing firm serving the contractor trades. Insights readers can get the complimentary report, “Endless Referrals,” by sending a polite request to freestuff@hudsonink.com or by calling Hudson, Ink at (800) 489-9099, or visit www.hudsonink.com.