November 12/19, 2018: Volume 34, Issue 11
By Jim Augustus Armstrong
(Last of three parts)
In my last two columns I discussed the pitfalls of buying leads from popular online referral services. I also discussed several proven alternatives to generating high-quality leads. Today I’m going to discuss how to get other businesses to send you an ongoing stream of leads for free.
Every flooring dealer knows how easy it is to work with customers who were referred to your business by someone they trust vs. someone who walked in because they saw your sign or heard a radio ad. Referred leads come in with borrowed trust. Many times they have already made up their minds that they are going to buy from you, so there’s really not much “selling” needed. You’re simply there to guide them through the selection process. They tend to be less price-sensitive and less suspicious. And best of all, they’re free.
If you are like most dealers, you probably have several referral partners already: realtors, designers, remodeling contractors, etc. Think back to one of your superstar referral partners. How much business do they send to you over 12 months? I know dealers who have earned more than $100,000 in one year from a single referral partner. Not all your partners will be that productive, but let’s run some very conservative numbers: If you had 25 referral partners, and they each sent you a paltry four referral leads per year who bought from you, that’s 100 additional sales. If your average ticket is $3,000, you’re looking at $300,000 in revenue with virtually no marketing costs. If you do $1 million per year in revenue, you could double the size of your business simply by acquiring referral partners.
Getting referral partners
One method I teach dealers is a three-step process that I used to develop over a dozen partnerships in 90 days.
Step 1: Make a list of 25-50 potential referral partners in your area. Send each of them a letter introducing yourself and your business. In the letter tell them about your business, what sets you apart from your competition and that you have an idea that will benefit both of you (a referral relationship). Tell them you will call within one week to schedule a time to meet. I recommend getting creative and attaching a dollar bill or lotto scratcher to the top of the letter to use as an attention grabber. This will generate curiosity so that they’ll read your letter all the way through. Be sure to tie in the grabber with the message in your letter. I recommend sending out no more than 10 letters at a time.
Step 2: Make follow-up calls to all the prospects you sent letters to the previous week. These are not cold calls because you’ve broken the ice by sending them a letter with an attention-grabber, and they’ll be expecting your call. Your only goal with the call is to schedule a meeting.
Step 3: Meet with the prospects for coffee, lunch or at their place of business. Your goal is to develop a rapport with them and find out about how they do business. You also want to educate them on your business, explain why you are different from your competitors and how they will benefit by referring customers to you. Ask them if they are interested in being your referral partner. Get a solid commitment, either yes or no.
By rounding up a herd of referral partners, you can generate an ongoing stream of high-quality leads for your business.