Why Referrals Are Drying Up and How to Fix It
For years, referrals have been the lifeblood of the contracting industry, trusted leads that come from happy customers spreading the word. But times have changed. If you’ve noticed that referrals don’t flow like they used to, you’re not alone. The truth is, relying solely on word-of-mouth isn’t enough anymore. The marketplace, consumer behavior, and the way people make buying decisions have evolved and your marketing strategy needs to evolve with it.
Here’s why and what you can do to ensure a steady stream of leads for your business.
The Problem with Relying on Referrals
Referrals are fantastic because they often come with a built-in level of trust and require less selling. However, they are not a sustainable strategy for several reasons:
Referrals Are Not a Strategy: They are a reward for doing a good job, not a predictable source of leads. You can't control when or if a client will refer you.
Changing Consumer Behavior: Modern homeowners, especially younger generations, shop online, compare providers, read reviews, and consume content. They are less likely to rely on word-of-mouth referrals.
Lack of Conversations: People don’t talk like they used to. Social media and digital communication have replaced many in-person interactions where referrals might naturally come up.
Forgetting You: Homeowners often forget who did their work after a few months or years, especially if you don’t stay top of mind.
Increased Competition: With endless options available online, customers can easily find and compare multiple service providers.
Distrust in the Industry: Many homeowners are wary of contractors due to horror stories and negative experiences shared online.
The Ugly Truth
Relying solely on referrals is essentially gambling with your business’s future. You might get a few referrals one month and none the next, leading to an unpredictable and unsustainable business model. This approach can also force you to take on any job that comes your way, even if it’s not your specialty, leading to suboptimal results and potential losses.
Action Steps to Diversify Your Lead Generation
To ensure a steady stream of leads and grow your business, you need to adopt a more proactive and diversified approach to marketing. Here are three actionable steps you can take:
1. Embrace Digital Marketing
Show Your Face on Video: Pick a platform like Facebook, Instagram, TikTok, or YouTube and start creating content. People want to see the owner and humanize the business.
Educate Through Social Media: Create educational content that addresses common problems or questions your potential clients might have. This positions you as an expert and builds trust.
Email Your Past Customers: Send out a monthly newsletter with updates, tips, and service spotlights. This keeps you top of mind and can trigger new job requests.
2. Ask for Reviews and Create Shareable Content
Request Reviews Immediately: As soon as a job is completed, ask your clients to leave a review. Positive reviews boost your online presence and credibility.
Create Shareable Content: Develop content that is valuable and shareable. For example, a video on how to prevent common home maintenance issues can be shared widely and attract new leads.
3. Personalize Your Client Experience
Give Thoughtful Gifts: At the end of a project, give personalized gifts to your clients. This could be something as simple as a custom cutting board or a baby blanket with the baby’s name embroidered on it. Personalized gifts create a lasting impression and turn clients into raving fans who are more likely to refer you.
Referrals are still valuable, but they should not be your sole strategy for lead generation. By embracing digital marketing, asking for reviews, creating shareable content, and personalizing your client experience, you can ensure a steady stream of leads and grow your business sustainably. Remember, the marketplace is always changing, and you need to adapt to stay ahead.
For more insights and tips, be sure to check out the full podcast episode and grab a copy of our book, which is packed with strategies to help you make more money and grow your business.
Resources
Grab Brad's tell-all book: The Contractor Profit Blueprint
