I recently taught a class on customer service. When I asked how many companies represented had referral systems, not one of the 40 participants raised their hands.

I was surprised. Referrals are among the best ways to gain new customers and the least expensive way to do it.

Why? With referrals, you know that you have content customers because they have given you a friend, neighbor or relative’s name to call. If they didn’t trust you, they wouldn’t give you names of people they know.
You are not making a “cold call” when you contact referrals. Someone that person knows asked you to call. The possible customer will often listen because you have the name of a friend, colleague or relative.
Too many companies don’t have referral programs because they require workers to be proactive. They require follow-up. It is much easier to spend money on advertising.
Use the back of your business cards for referrals. Print a statement that gives a 10 percent discount or $10 off service for referring a friend. Make sure there is a place for the name of the referral so that you can give the person credit. Then give both the new customer and the referring customer the discount. Technicians should be giving their business cards to customers when they arrive at customers’ homes. This is a very inexpensive way to generate new work.

You can also put a statement on customer survey cards: “If you liked our service, tell a friend. If there was a problem, tell us.”

Ask

When new customers call, ask how they found your company. If it was from a referral, send a coupon to the referring customer. That customer will be pleased and surprised.

Maintenance-agreement customers can get money off their renewals for referring new customers.

If you send newsletters, make sure to describe your referral programs in them. People have overheard friends complaining about their cooling systems. Your referral program gives your customer the opportunity to do something good for that friend.

Don’t forget about system referrals, either.

Many companies send cookies or similar items to say thank you after a job is completed. Many customers have come to expect them. What they don’t expect is a telephone call 30 days after the job is done.

But these calls represent a great opportunity. After finding out how their system is working, ask them whom they have talked to about it. If someone is spending thousands of dollars, they’ve probably told somebody about it.

These are the potential referrals for your company. Ask, “Do you think they would be as happy as you are with a new HVAC system?”

Call

If so, get the name and telephone number and permission to call them.

If you have sold the replacement unit based on energy savings, another telephone call needs to be made in about six months (again surprising many customers). By then, customers should be seeing the savings. A telephone call confirms it and is a great time to ask for referrals again.

Those of you who have contracted with a company to send cookies after the job is completed have a “passive” referral system. A “report card” is often included with the cookies. Customers return it to the cookie supplier, which sends you a report. Make sure one of the questions on that card is for referrals. I would still call 30 days after the job to make sure the system is working properly and ask for referrals.

Referral programs don’t cost much money. However, they take a lot of time and commitment to be successful.

Copyright 2007, Ruth King. All rights reserved. Write to Ruth King, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093. Call (800) 511-6844; e-mail ruthking@hvacchannel.tv.