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Referring Relationships

November 12, 2012

(This next round of posts is going to get a little more tactical than what I’ve been writing in recent weeks.The upside is that the things I’ll be exploring apply to businesses, churches, artists, solopreneurs and non-profits… see what you think. And please let me know if they are helpful. Or not helpful.)

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When I first started leading Center City Collision at the end of 2003 I remember thinking how much work went into getting customers. Thankfully the previous owner had a good customer base and many people came in during the early years and asked for him. “Larry still working here?” This gave me the opportunity to tell them a little bit about the transition to my ownership and then offer to write them an estimate. My strategy at the time was simply to land as many jobs as I could. That was pretty much it. Just land them one by one as they came through the door. I’d get my clipboard and blank piece of paper and walk outside and take a few notes about the damage, get their VIN # and then write an estimate and just hope they would say “Yes” when I offered to put them on the calendar and pre-order all the parts needed for the job. One customer at a time we started to grow.

Then a really bad thing happened at the Volkswagen dealership next door. Someone ran across the hoods of several brand new cars. I never did hear if they caught the person that did it but the net result was 8 brand new cars were damaged and needed to be repaired and painted. Eight! At the time we were averaging about 10 cars a month. It was obviously more than we could handle all at once. But the dealer asked us to do 4 of them and they would send 4 to another shop. I was so stoked! The pressure to sell was off for a couple of weeks and we could focus on getting these brand new cars back to the dealer as soon as possible. I can’t remember exactly how long it took us but I know we did it faster than the other shop and our paint jobs matched the original better too. In fact we had to repaint at least one of the other shop’s jobs to help get the color right.

The best thing about this for us was it solidified a relationship with that dealer. It gave us an opportunity to show them what we were capable of and increased their confidence in us. Shortly after this we became the primary shop they referred their customers to which, as it turned out, has been a significant portion of our yearly revenue for the past 8 years.

This experience taught me a very important lesson about the power of referrals and the importance of having referral partners. So rather than try to land one job at a time, I realized there are people out there who because they are trusted and have a customer base have the power to refer lots of customers. Call them influentials, connectors, mavens, trust agents, or whatever you want. The reality is they can send you a lot of profitable work if you can find a way to get them to know, like and trust you and your services or product.

So here’s a couple questions to help you uncover potential referral partners:

Are there businesses that you don’t compete with but do share customers with?

Who are the people who get to your customers before you do?

Just by way of illustration for us in auto body repair good referral partners are people like car dealers, insurance agents, and mechanics. If you run those three through the grid of those 2 questions above it’s easy to see why.

 

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