Residential Metal Roofing Executive Report

Referral Maximization

Issue #45 | January 20, 2016 | Seth Heckaman

In this issue of the Residential Metal Roofing Executive Report, we will continue our discussion on marketing and lead generation. In past editions of this series we have covered developing your marketing plan and how to make your spring shows and events most successful. In this issue we will discuss how maximizing your referral business can dramatically transform your business.

Every home improvement professional salivates over the opportunity to run a referral lead and rightfully so! Referrals have been qualified and sold by past customers and we must only show up to finish the deal. Referrals know the price before you arrive, understand the value proposition, and see the positive impression your company left with their friend or loved one. And, not only do referrals close at the highest percentage, they are the cheapest lead to generate. They’re perfect!

Referrals mean even more to companies selling premium, big ticket products, like specialty metal roofing. In his fantastic book SPIN Selling, Neil Rackham discusses how the “risk of embarrassment” influences consumers’ decisions when evaluating big ticket solutions. They don’t fear the embarrassment of purchasing the wrong window or bath liner, but this is a legitimate fear when deciding on an expensive roof that will be so visible to their neighbors and visitors. This fear does not exist with referrals. They know they are not alone – your past customer saw the same value and made the same decision.

Despite their value, most companies consider referral leads to be “found money.” They love when they come in but no proactive effort is made to generate more. This logic is understandable on the surface – referrals are free leads, so why begin spending money and eliminate one of their primary benefits? But if you spend a little money to generate referrals — leads that are still less expensive than your average lead cost and that close as high as every other referral — would that not be of value to you and your business?

We call this Referral Maximization and the most successful companies in our industry are finding their marketing dollars can be much better spent generating referrals as opposed to hoping that they might fall in their lap. Your business cannot function without significant investment to generate leads to feed the machine that is your business. Let’s discuss investing in generating the highest quality lead available.

Radius Marketing Efforts. It continues to amaze me how few companies spend a little time and money marketing to the neighborhoods they have sold jobs, whether recently or in the past. These homeowners see your beautiful metal roof every day, no longer fear “the risk of embarrassment,” have some amount of “keeping up with the Jones’” curiosity, and all the roofs of a neighborhood are usually re-roofed in a short time period. How long does it take the salesperson to knock the immediate neighbors, introduce him or herself, and let them know that their neighbor has chosen to invest in a lifetime, beautiful, maintenance-free metal roof? How much does it cost to mail the neighborhood a letter announcing your presence and providing your contact information if they have any questions or concerns? These methods take more time and effort than money, so they are often left undone and companies never capitalize on these potential referrals.

Ongoing Contact and Relationship. Another principle Rackham notes is that customers are looking to purchase an ongoing relationship when buying a big ticket item. You handle this during the sales process, telling your company story in such a way that makes them want to be in relationship with you. But through ongoing contact beyond the job’s completion, you can capitalize on this desire, further endear yourself to that customer, and turn them into a stark raving fan. Stark raving fans rave; they tell their colleagues, friends, and loved ones of their positive experience. Again, it requires very little investment to develop an E-newsletter program to your database of past and prospective customers, mailing Happy Anniversary postcards on the anniversary of their job’s completion, and keeping them supplied every couple of years with brochures and information in case they do know someone who might be interested.

Make Every Lead a Referral. Rodney Webb has developed a unique step in his sales process where he attempts to make every lead a referral. While the salesperson is measuring or performing an inspection, they provide a list of contacts for the homeowner to call and provide a discount for every past customer they speak with. Getting past customers to be included on these lists usually requires an incentive to them as well. This system works beautifully for established companies with plenty of past customers but is obviously more difficult for newer companies. Rodney and others have found that once these homeowners personally talk with past customers, their defenses come down and they begin acting and performing like referrals.

Testimonials. Similar to making every lead a referral, utilizing testimonials in your marketing and in-home process can be incredibly effective. If you use testimonial videos, it is critical to be committed enough to generate a wide array of customer profiles so every web visitor and lead will find someone they can relate to. GuildQuality is a fantastic and inexpensive solution to survey your customers and generate testimonials. Testimonials help prospective customers know they are not alone or the guinea pig for metal roofing, or any product, in their area

Open Houses. We have seen companies hold events in customers’ driveways to hopefully entice neighbors to visit the project and ask any questions they might have. We have not see these be very successful recently, but we continue to see companies make incredible use of showrooms. Showroom leads are always a high performing lead. We have heard of companies combining the power of showrooms and referrals by holding open houses for past and prospective customers, providing time for them to mingle with each other (turning prospective customers into referrals), and set as many appointments as possible. Again, this requires more time and effort than money but has proven to be incredibly effective.

As you generate your marketing plan and budget for the year ahead, consider what money you can dedicate to generating more referral leads. I was talking with a customer this past week who is currently averaging one referred sale for every sold project. How would that grow your business and improve your bottom line in 2016?

As always, thank you for participating in this conversation and please let me know of any opportunities for us to be of service.

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