Customers Earn Cash Back by Referring to Plumbing Company

Revenue-boosting referral program urges customers to become blabbermouths

Customers Earn Cash Back by Referring to Plumbing Company

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At Anthony Plumbing, Heating, Cooling & Electrical in Kansas, technicians are encouraged to be bigmouths — as in spread the word to customers about the company’s innovative Big Mouth Referral Rewards program.

The program rewards customers who hire the company to install new HVAC systems or replace lateral sewer lines, then refer the company to other people that do the same. And technicians play a role in marketing the program, under which customers can earn up to seven refunds that eventually could cover the entire cost of their installation, says Kim Westhoff, director of marketing at the company, based in Lexena, a southwestern suburb of Kansas City, Kansas.

“If a technician makes a repair and sees that an HVAC system or a sewer line either needs to be replaced or should be replaced in the near future, they give the customer a flyer that explains the program,” Westhoff explains.

However, a less-is-more approach tends to yield the best results. Instead of taking valuable time to explain the program in great detail, the company trains technicians to keep their sales pitch short and sweet, which benefits both them and the customer, she says.

“They tell the customer two things,” Westhoff says. “The first is that we have a great referral program in which Anthony will keep writing them checks that, with enough referrals, could eventually pay for the entire system. Second, if they want more details, read the flyer, call the office, talk to a comfort advisor or visit the company website for further details.

“We can’t expect them to explain all the details right then and there because many technicians don’t feel comfortable being salespeople.”

MORE REFERRALS, MORE CHECKS

Here’s how the referral system works: If a customer that bought a new system or new sewer line refers someone else to Anthony who also hires the company for an installation, they get a check for 5% of their initial investment.

A second successful referral earns the customer a 7% refund; a third referral generates a 10% refund; a fourth produces a 15% refund; and the next three referrals earn 18%, 20% and 25% referrals, respectively, for a total of 100%.

“It’s been very successful,” Westhoff says of the nearly 10-year-old program, which she rebranded with the catchy and somewhat sassy Big Mouth theme after she joined the company four years ago. She credits Steve Burbridge, the former owner of the company who now is its president, for creating the program.

Since its inception, nearly 300 customers have referred people who subsequently purchased new systems. A customer-relations system keeps track of all referrals, she says.

Some of those customers are one-and-dones, with just a single referral. Only a handful have racked up enough successful referrals to cover the cost of their installations, Westhoff says.

“During each year, we generally have about 40 to 60 of what we call ‘active’ referrers — customers that keep referring people and have received multiple checks,” she adds.

GREAT RETURN ON INVESTMENT

As for refunds, Westhoff estimates the company — which has about 250 employees, runs about 135 service vehicles and concentrates on service and repair work and drain cleaning — has refunded $500,000 back to customers.

On the other side of the coin, the program generates about 10 to 15 new installations a year that the company otherwise might not sell. And with an average HVAC-system cost of $7,000 to $8,000 and an average sewer-line installation price tag of $12,000 to $20,000, the program generates significant revenue, she notes.

The company uses multiple channels to market the program, including quarterly direct-mail campaigns, the technicians, in-person sales representative visits and the company website. The marketing costs are low and the return on investment is high, Westhoff points out.

“The revenue-to-cost ratio is about 20-1,” she says. “So we’re making $20 on every $1 spent on marketing. That’s a really excellent return on investment.”

ADDS VALUE TO BRANDING

But the program also creates another benefit that’s not as tangible as revenue but critical to marketing and branding: In consumers’ minds, it reinforces that the company provides them with great value, she says.

“Obviously, revenue makes the world go around,” Westhoff notes. “But you also have to ensure that consumers perceive the value and trust the brand so much that they’d refer us to family and friends.

“When they do that, it speaks volumes about our company, and it proliferates throughout our service area — and beyond. We’d had families move out of our service area (metro Kansas City) and almost beg us to come make a service call or install a system in their home.”

The bottom line: The best form of advertising is word-of-mouth referrals. And the Big Mouth program motivates customers to be “blabbermouths” and “chatterboxes,” as the program’s marketing materials playfully note.

Of course, that means technicians must provide the kind of five-star service that’s worthy of referrals, Westhoff says, noting that the ensuing trust factor is huge. And after technicians provide that great service, it’s up to them to be bigmouths as needed — in the nicest sense of the word.  



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