6 Ways To Grow Your Business Through Repeat Customers and Referrals

There’s nothing like a familiar face, especially when it comes to your business. There are lots of reasons to appreciate your existing clients. For one thing, they’re vital for your bottom line. Studies have shown that increasing customer retention rates by as little as five percent can boost profits between 25 percent and 95 percent.

Why? Because existing customers are also a coveted source of unpaid advertising. Treat your customers right, and they not only come back, but recommend you to friends and neighbors.

Nielsen surveys cite word of mouth as most credible source of brand recommendations. Eighty-three percent of survey respondents say they trust in-person reviews more than any other form of recommendation. Industry-specific surveys turn up similar results. When internet marketing agency Contractor Nation asked homeowners where they get recommendations for home contractors, the majority — 42 percent — said they ask friends for a name, while another 28 percent said they query home contractors they know.

Home contractors shared notoriously low trust among customers, a trend documented anecdotally and statistically throughout the years. That makes loyal customers all the more valuable. These clients established a trusting relationship with you, making them more willing to pull the trigger on various projects. However, bolstering repeat projects and referrals takes some work on your part. Here’s how you can leverage existing clients to boost profit margins.

Deliver Top Tier Service

Repeat business starts with superior customer service. For contractors, that means setting expectations early, before customer assumptions and misunderstandings can tank your project.

Maintain communication via regular check-ins. With texting as popular as it is, it’s incredibly easy to catch up homeowners every day. Report issues promptly and keep your work as unobtrusive as possible to customers’ everyday lives. Chat with customers in-person when available because there’s nothing like talking face-to-face.

It may seem basic, but these are the nuts and bolts of customer relationship building. Trust is integral for capturing repeat business and referrals.

Follow Up After Project Completion

Most contractors follow up with clients after projects conclude as a matter of course. So if you’re not doing it yet, it’s time to start. A follow-up call is a great chance to settle any issues that might have popped up after the job wrapped, allowing you to solidify your reputation for great service. It’s also an opportunity to discuss future projects your clients may be considering, and to remind customers about your referral program if you have one.

Create a Referral Program

Everyone loves a discount. Initiating a referral program for customers is a double bonus: a chance to seal the deal with an existing prospect while gaining advertising in return. Some contractors offer free upgrades or maintenance if a referral comes through. Others give discounts on the next project or even gift cards to popular retailers nearby. However you decide to reward customers, make sure to remind them occasionally throughout the project.

Provide Discounts on Additional Home Remodeling Projects

This is a technique many contractors employ without really thinking about it. Offering customers a discount if they agree to add additional work is a sales tactic that’s about as old as it is effective. But you can boost your retention rates if you institute a formal discount program. Many homeowners have more than one project in mind when they contact a contractor, so even shaving a small percentage off an additional job may be enough incentive to encourage a second project.

You can even create discount packages for follow-up work. Many HVAC professionals offer discounted maintenance packages for newly installed units. Study your customers and look for trends in the buying process. A homeowner who installs a new roof may be thinking about re-siding their home to match. A homeowner who’s just built a new deck off their back exit may suddenly get an itch for a new patio. Think about these kinds of common pairings when you create your discount strategy.

Stay in Touch

The more you stay in front of your clients, the more likely you’ll land repeat jobs. A quarterly newsletter with seasonal sales or discounts is a wonderful way to make sure your name sticks in your clients’ minds. Personalized birthday or holiday cards are another strategy and are always welcome, particularly if they come with a coupon included. Ideally, you want to be the one person homeowners call when they need work done, so be sure to keep your presence alive in your customers’ memories.

Build Your Relationships With Other Contractors

Given that homeowners often look to other contractors for recommendations, it makes sense to build relationships with your peers. No doubt you work with many different tradesmen day-to-day. A kitchen remodeling business may regularly subcontract out to electricians, plumbers or HVAC technicians, and probably also works closely with architects, interior designers and perhaps even realtors. Networking with these agents can reap big profits.

If you don’t typically interact with other contractors or professionals, it’s time to develop these kinds of relationships. Consider joining a professional trade organization or attending an event at your local chamber of commerce. Local conferences are another way to make valuable contacts. These connections can lead to informal partnerships and more referrals, if you play your cards right.

Ultimately, tapping past clients is about engaging soft skills in customer service. Strive to empathize with clients, listen to their concerns, and pay attention to the types of problems they have with their homes. Work towards 100 percent transparency and polite, friendly, frequent communication. Hone these abilities and you’ll find yourself booked solid for months on end.

Next, learn how to grow your business through mobile marketing.