The Magic of Interindustry Referrals

Referrals are a way for you to not only provide help for your customers, but also get some in return from other companies

Interested in Business?

Get Business articles, news and videos right in your inbox! Sign up now.

Business + Get Alerts

Consumers don’t have your list of services memorized. They don’t understand the nuances between home service providers: Is a water heater a problem for the plumber, electrician or HVAC technician? Do you fix irrigation systems — that’s water, right? Septic tank pumping, is that you?

Sometimes you get requests for services you don’t offer. These are great to file away for potential expansion ideas later. But today, you have a customer with a need.

Guess what? Other home service companies get those same kind of errant requests. The best thing for your company and your customer is to provide a referral.

Establishing a network inside and tangential to the industry is a good idea, but some plumbers find this intimidating or don’t see the value. Making friends with the “enemy” might sound crazy, but there are several benefits.

First, it’s a wonderful customer service tactic. You got the call — congrats. That means your marketing is working, your customer service is working and your reputation is working.

When a customer calls, they just want their problem solved. Whether you do the job yourself or point them in the right direction, they will be grateful. They will remember you helped, and you may still get work from them later.

Second, referrals are a two-way street. For every call you pass on, reciprocity will come. It may not happen immediately, but most people naturally want to help people who help them.

Don’t do Department of Transportation work? Find someone who does, because they might be more than happy to pass along that leaking sink. Forming a powerful network of “almost competitors” and complementary service providers (pest control is great) is an excellent opportunity to expand your word-of-mouth marketing.

BUILDING YOUR NETWORK

You don’t want to refer just anyone. If it’s a matter of picking a name out of the phone book, let the customer handle it. Who you recommend reflects on your business. The idea is to make a positive impression on the customer. It may be better to say you don’t have anyone you are comfortable recommending.

When choosing referral partners, I focus on small-business specialists trying to build their businesses. They should be able to provide a similar level of service and quality to your business, but aim for someone slightly smaller than your business. These companies will be grateful for the work and attempt to return the favor.

When possible, find multiple partners in each category. You don’t have to become friends with them, but keep in touch. Business situations change.

Your almost-competitor may become your competitor, their work quality may change or they might go out of business. That’s OK, but any of these situations mean they are no longer a good fit.

Occasionally, your referral partners will let you down. Don’t throw the baby out with the bathwater. While feedback on customer experience is important, everyone has a bad day. Don’t lose a long-term referral partner because of one poor job. Unless there is negligence or a serious customer service issue, give them a little grace but don’t keep passing along a name if your customers are repeatedly unhappy. Referral partners are about building relationships, so look for business owners you respect and whose work you admire.

The best referral partners are mutual. Not every relationship can work this way, but most can. I keep money out of the equation, which keeps me honest and keeps each of us doing our best work. A relationship built on mutual respect and trust is ideal.

If you refer a business because you believe in their company, have faith in the work they do and want them to succeed, then that relationship will often last longer and be more fruitful than one based on referral fees.

FORGE FRIENDSHIPS

Industry events, local business networking and cold calls are all good options for finding almost-competitors. Keep in mind these people are at least as busy as you are (if not more), so don’t expect too much. Nothing speaks louder than your work, and nothing will go further than offering referrals while expecting nothing in return. Any relationship takes time to build, so don’t get discouraged if referral partners don’t work out.

When referring to someone for the first time, it may seem risky. Don’t be afraid to tell your customer you’ve not worked directly with this individual before. In fact, it’s perfectly appropriate to ask the customer if they were happy with the referral.

Word-of-mouth is everyone’s favorite form of advertising, but few people put enough stock in the power of industry partnerships. These almost-competitors might become some of your most powerful advocates. One of the key things to remember is that these customers need to get your best. It isn’t about the revenue from that one customer, it’s the revenue from all the potential customers coming down the pipeline.

While these relationships can get complicated, remember its business. Even when you consider someone a friend, they will decide based on the best interest of their own business goals and values. Find people and businesses you align with to make these relationships work long-term. 

------------

Anja Smith is the managing partner at All Clear Plumbing and writer/speaker at Tradebiz Toolbox. Contact Anja at www.tradebiztoolbox.com.



Discussion

Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.