Like testimonials, contractors live and die by their referrals. For some, it's the only marketing tool they really use to build their business.

The problem, however, is most builders leave it up to their clients to "pass the word around". They never know if their clients are passing the word around...to whom...and if the potential prospect will act on the referral.

These are "word-of-mouth" referrals...and NOT a referral system.

Systematizing Referrals: Putting You in the Driver's Seat

The farthest most contractors will go to 'systematizing' their referrals is to ask their clients "know anyone else?" or "make sure you pass my name around."

Now, there's nothing wrong with this...it just doesn't get you the best, most qualified referrals...quickly. Here's a question: would you rather have your year booked out after ten phone calls or twenty...or fifty?

Systematize your referral system with the following strategies:

Make sure your clients know the type of homes you build. This may seem common sense...you're building THEM a house -- they should know the types of homes you build.

Don't assume...you know your homes the best. Make sure, when you're asking for referrals, to ask if your clients know anyone looking to build an XXXXX type of house (where XXXXX is your speciality -- you do have a speciality...a target market, don't you?). This will go a long way in weeding out non-qualified prospects.


Don't ask just once. Not everyone builds a home every year...and times change. Go back to your past clients once or twice a year and ask again. Just because they didn't know someone in June doesn't mean they won't know someone in January. This is especially effective when combined with the next two strategies.


Give them something...both your client and your potential prospects. Don't just ask for referrals, but have something of value your client can give to the prospect. A checklist for "how to choose a builder"; a subscription to an appropriate magazine; sample design plans.

Also, give something to the client in an advance thank you for the referrals (don't give it to them only if they refer...give it to them expecting the referral)...movie gift certificates, video rentals, free pizza night for the family.

(By now, for those of you saying "too expensive". Compare some of these costs against your time spent drumming up business; advertising yourself; networking; trying to get leads through your website. And, finally, if a client is buying a house from you for hundreds of thousands of dollars...you can add fifty or a hundred to the price to cover these ideas...I give 'profit making' ideas...not 'profit taking' ones -- I never suggested you had to cover the cost.)


Use special dates to remind them. Send them something for the anniversary of their move in date; their wedding anniversary; their birthday. Whatever...any excuse to thank them for being a client and ask if they know anyone who would enjoy your services like they have.


Finally, reward them! When a referral becomes a client, immediately send a thank you. A card; fine wine; dinner out. Let them know how much you appreciate the referral (and the fact they did a lot of the work for you...)