They are the best kind of lead. Every business loves referrals. Many businesses rely on referrals. The introduction is already made and many times the sale is already made without having to put in any real effort. They are cheap and warm. They should be welcomed with open arms.

However if you are trying to build your business you can not solely rely on referrals. You have to be willing to invest time, money, and manpower to achieve the growth you desire.

In this particular case the business was a home remodeling group in the midwest. Their target customer was the mid to high end homeowner looking to upgrade their basement. Their business was entire built upon referrals. They had lucked into a few remodeling jobs because of connections through a family member. They did great work and that led to more opportunities.

They were projecting to roughly $300,000 in sales for the year. That equals roughly about one high end basement remodel every two months. The average high end basement in their region costs on average about $50,000. So if they wanted to grow this business they had some questions to answer.

They knew they wanted to grow. They knew they could handle more work. They knew they could do more than just finish basements. What they didn’t know was how to reach more customers. If you simply wait by the phone for referrals to call you you might be waiting for a long time. So they went on the offensive.

Considerations


The very first thing was to hire two minimum wage workers (college kids) to hit the phones. There is a service offered by the Cole Realty Resource that provides you with phone numbers for a particular area. If this company had done a basement in a certain area then every single person who lived in close proximity to that basement was getting a call from us. Let them know we had worked in the area and that a neighbor of theirs could vouch for our work. Simple script and some elbow grease and we had leads we could now go out and try to sell instead of just waiting by the phone.

It was a great start but let’s be honest they call it cold calling for a reason. We needed to find a way to bring in leads that had a greater chance of turning into a sale. At least more consistently. First, introduced a new website (at the time) called “Thumbtack”. Thumbtack is a service that matches consumer with professionals for specific services. It was very new to the region and thought it was important to get out ahead of the pack. Surely other contractors and home remodelers would soon find out about this resource. However if we could be first, find leads, sell them, do good work, and get good reviews we would have a leg up on the competition.

They agreed to a small exploratory budget that provided solid leads to follow up on every single day. It turned a high percentage of them into sales. Not only that but those sales led to other projects that the customer was not even thinking about. It made up selling very easy. No longer was the firm just doing basements. It was doing kitchens, master baths, painting, even full rehabs for a wide variety of customers – off to the races. Finally those college kids got to work on the streets.

If completed any kind of remodel at a particular house we would put a sign out in their front yard (With their permission of course). We would leave that sign out for at least a week so that everybody in the neighborhood would drive past it at one point or another. The sign showed the company name and the work that was being completed. After the week was up we sent the college kids out to go knock on all the neighbors doors. We had a handout for them to give each person they spoke with and a card for the prospects to fill out. Since we were in the area we were offering free estimates on any project they had thought about doing.

Conclusion


By just making these small changes in our approach we have tripled our projected annual sales from $300,000 to $900,000. Currently they are negotiating rehabbing a 6,500 square foot mansion as well as a 4 unit residential building that could very easily add a million dollars to their bottom line. Both of which they never would have had the opportunity to have gotten without the fundamental change in sales strategy and by getting the details right.