Myths in Remodeling: Referrals are the Best Leads

I am no fortune teller but my guess is you have said, “Oh yeah, what’s better than a referral?” My answer, “Almost any other lead is better.” Before you accuse me of being full of the stuff the bull leaves behind, hear me out. I will give you some “submyths” to support my theory.

Submyth I: Friends of clients are always as easy to work for as the original client. Well, they might be but you have to assume and of course so do they. Asking a friend for an opinion that costs money is fraught with potential for hurting someone’s feelings or worse.

Submyth II: If the clients accepted responsibility and did selections on time, so will the referral. You may have the best procedures on the planet, but if the friends pushed the envelope a little, you can be prepared to see the same thing; it’s a matter of how much with the referral. You can also expect the referral to know some costs and to question any differences.

NOTE: If you have found these first two submyths aren’t myths at all for you, stop now and go play golf. You don’t need to read any more and by the way; stop and buy a lotto ticket on the way, maybe your luck will hold.

Submyth III: The referrals will have the same sense of cost vs. value as the clients. NOT! This can lead to what I call reverse-double jeopardy — remodelers never win in RDJ. You are either asked to divulge a confidence or to defend someone else’s taste; either or both are lose-lose scenarios.

Submyth IV: Referrals will be patient — how long it took to start the friend’s job will not be a factor.

Submyth V: You can build and sustain a good chain of business on the books from just referrals. (I include word-of-mouth as referrals.)

It is Submyth V, that prompts my position about referral leads — of course referrals are good leads but they are not the best because they aren’t dependable in either numbers or consistency. To have a quality source of leads from which to prospect, a dynamic remodeling company must actively be looking for new leads (we saw your ad and liked it leads, heard about the CAPS program leads, our son plays for the Little League team you sponsor leads, your trucks are clean and the drivers are polite leads) all first-timers with the company. It is this type of lead that enables a company to dependably grow and even diversify.

Why doesn’t it work just as well with referrals? Consider the pebble-ripple effect: Drop a pebble into a quiet pond and the ripples from the splash will radiate out from the source (the original job). There is a lot of exposure close to where the pebble went in, but as time passes, the ripples, although having covered a lot of territory, are not as big or as noticeable. The same things happens with referrals — so I want to make sure I am dropping new pebbles all the time; that way the referral is gravy.

You will have to spend more time than money keeping your potential referral pool active, gifts, newsletters and personal calls. You will spend more money than time generating new leads from which future referrals may be generated.

You will, of course, keep records on the new leads you generate as to which ones furnish the best referrals. Just remember, each new lead from an outside source is a new pond to drop a pebble in . . . While you’re here.

Win a copy of Pocket Ref by Thomas Glover. Be the first e-mail correctly answering the question, “What is the best lead of all and your reason why?” One winner, my call, we’ll publish the winner’s name.

M M “Mike” Weiss has been a full-service remodeler for over 25 years. As an instructor for the CGR and CAPs programs, he spends many weeks each year on the road teaching other remodelers. He is also a past chairman of the Remodelors Council of the NAHB.

And while you’re here . . .Agree? Disagree? Want to know more or even argue? Send me an e-mail with your ideas or suggested topics, we’ll think about them and see what we can do.