Why Referral Marketing is So Effective
In another blog I recently posted I referred to an article I read in Cleanfax written by Howard Partridge, “The Secret to Record Sales and Profits” and have given it my enthusiastic endorsement. Howard really hit it out of the park when he introduced his readers to referral marketing as “the process of building a network of sources that will refer multiple clients to your business.”
Partridge honed his principles in the cleaning business, but I want to apply his principles to restoration businesses. I built a $5 million business in less than 9 years in the restoration industry using the principles he espouses.
Here are the 10 reasons Partridge says makes “referral marketing” superior to ALL other marketing methods:
- Your network is unlimited – how many insurance carriers can you list from memory? 95% of them are using TPAs to manage their claims. Today it is NOT the carrier we market but the TPA they outsource claims management to.
- Higher-quality clients – how would you like to receive direct assignments that you don’t bid on or compete for but instead introduce yourself as their carrier’s personal representative?
- Prequalified clients – most assignments will become covered losses needing immediate action.
- People trust referrals – as a carrier’s representative you are vetted and endorsed by the carrier as their industry expert.
- Reduced competition – the majority of contractors are competing against each other for the attention of local professionals and potential customers while you share the rotation with a few other top performing companies. Which way do you think is better?
- Low cost – there are NO long-term contracts, NO ongoing fees to remain on the list, NO annual renewal fees. You pay a reasonable fee only on completed work. Would you be willing to do that?
- Higher returns – how much do you spend annually on yellow page ads, Google AdWords Campaigns, lead generation sites and contracts, marketing staff, website development and other efforts to gain more work? The industry standard is 7% – 9% of gross revenue. TPA fees will cost you less than this and only for work completed, not work you hope to get. Partridge suggests a 4:1 return is typical in advertising and most contractors would be beside themselves with a 10:1 return. How about the 20:1 return you get from program work?
- Returns guaranteed – in the insurance industry payment is all but guaranteed.
- Small-time investment. While the TPA is building a core staff of professionals negotiating, marketing and selling top insurance executives you are at home working on and in your business. The chief goal of TPA management is to secure more work so they can send it to you. How perfect!
- Exponential multiplication – my company grew on average nearly 50% every single year. Program work was not our only source of revenue, but it was the largest and most consistent source of growth every single year, every one!
I have a singular goal as a former business owner turned restoration business coach – to help you grow your business. Believe me, referral marketing is the most transformative commitment you can make to growing your business.
Reference: 6 Month Coaching Plan – The Revenue Generator – The Ultimate Revenue Booster for Your Business Sales Growth
Cleanfax article: http://www.cleanfax.com/marketing-advertising/secret-record-sales-profits-referrals/
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