Tom: Jonathan, you must deal with referrals a lot. Do you have any thoughts on referral sale?
Jonathan: I have thought about it quite a bit. For us, in my own experience with my lawn care company, referrals have our highest conversion rate or closing percentage, to use your words. For us, it runs in a low 90% range year after year. There is nothing in our business with a higher conversion rate than a referral. We do actually encounter some expense, so they’re not free to us, because for every referral we’re sending out a thank you card and a gift card to a local restaurant to the person that gave the referral.
I really believe in referrals. They are not our number one lead source, but they are our best conversion. So, we actively try to get our clients to make the referrals by giving them gifts to say thank you. We go out of our way because we’re encouraging and trying to train behavior. We want them to give us another referral. This is one, if I was picking three top things that if I was to start over today, referrals would be one that I’d focus on.
We’ve actually built an entire strategy around referrals. What we do is we give our clients a gift card to be used toward lawn service with my company, to give to their friends. That’s why referrals aren’t completely free to us. Our clients give that gift card to their friends, and then those friends a lot of times will hang it on their fridge because it’s got value to it and they won’t throw it out. Someday down the road, they’ll redeem that gift card with our company when they need service. We have an opportunity to show off what we’re able to do and the level of our customer service, and they become a client.
I think it has got to be one of the top three things that a company must focus on when they’re building out their business.
Tom: I couldn’t agree with you more, but one important thing that you said there is, it requires a strategy. You will always take referral leads and referral sales just by doing what you do. But, if you do implement some strategy where you can put together a plan and a program and really make it happen, you will make a lot of sales by pushing that referral.