Marketing for Referrals

It’s often said that the best customer is the one you already have. If that’s true, the next best customer surely comes by way of your existing customers.

Indeed, when KBDN surveyed the kitchen and bath industry last fall to get a feel for how marketing dollars are spent, the results showed 37% were spending money specifically to target referral customers. Additionally, 67.6% of dealers attributed closing sales to referral customers. At 184%, the return on investment was the highest of any marketing expenditure cited.

In a soft economy, where every dollar should be stretched as far as possible, a 184% return on investment is noteworthy. In addition to offering a great return, marketing for referrals is typically more cost effective than many traditional advertising venues.

Know Your Client

Advertising works when you reach the right person, at the right time, with the right message, in the right context. Achieving that goal begins with a quality database. Making this an ongoing priority is the key to not only knowing your customers, but understanding them, their families, their lifestyles, their desires, their design preferences and what moves them to act, among other things. Once you understand the subtleties, it’s easier to make the advertising work.

Dennis D. Gehman, CR, CLC, CKBR, president of Gehman Custom Remodeling in Harleysville, PA, attributes 65% of his business to referrals. “We maintain a detailed database including the ‘usual information’, but we also capture data about children, pets, birthdays and anniversaries. This helps us refine our target market, allows us to match each client with the ‘right’ staff person and, as a bonus, every client gets holiday cards from us – a great reminder that we are still ‘out there.’”

Bill Borchert, CAPS, CGR, and Denise Borchert of Borchert Building Company in Washington, MI maintain an extensive database as well. “We try to capture as much information as possible – we jot down information about hobbies and even how they take their coffee. Think about how you would feel if you came in for an appointment and I greeted you with a cup of coffee the way you like it! It truly starts a meeting off on the right foot,” says Denise Borchert.

“Our database is absolute gold!” exclaims Larry Andersen, marketing and showroom manager of Sea Pointe Construction in Irvine, CA. “I wish we had begun collecting e-mail addresses sooner.”

Jim Daniel, president of Daniel Kitchen & Bath and Daniel Lumber in Savannah, GA developed his initial database with eNewsletters in mind. “To gather e-mail addresses at our last home show, we decided to give away a high definition television through a free raffle. To qualify, each person had to fill out an entry blank, complete with their e-mail address, along with the type of project they were considering.

A week or so after the show, we sent out e-mail newsletters to everyone, and plan to continue on a regular basis.”

“With today’s desktop technology and a robust database, you can easily market directly to the individual. Your message to the couple making a decision about a new kitchen and the single woman considering a bathroom remodel can be based on the same document,” according to Kevin Telaak, v.p. of Artisan Kitchens and Baths in Buffalo, NY.

Keeping in Touch

Maintaining regular contact with past customers keeps a company’s name in the mind of the consumer, design professionals agree. Denise Borchert uses the advertising term “TOMA” to describe this. “Top Of Mind Awareness,” she says, “is critical, so when someone asks a former client about remodeling, without hesitation your name is immediately given out – and hopefully your Web address, too.”

Often, kitchen and bath professionals don’t take the time to plan and execute the steps necessary to market for referrals.

Sometimes the problem is they are unsure of effective ways to reach the level of TOMA they desire.