Why are so many people asking my opinion? Everywhere you go businesses want your feedback: restaurants, grocery stores, even hospitals. It can’t really be that important in the grand scheme of things.
Or is it?
Taking care of a customer is not just good for the customer/salesperson relationship, laying the groundwork for a successful business relationship that grows a company. This idea motivates companies every day. Homefix Custom Remodeling relies on its reputation in all of its service areas: roofing, windows, doors, siding, insulation, gutters, and walk-in tubs. Every vendor you do business with should be asking for a referral from you. They care about how they are treating their most precious asset: their customer. The contractor who doesn’t ask for your feedback is more worrisome.
Questions Your Contractor Should be Asking
- Did the home remodeling project go as planned?
- How did my remodeling contractor handle my comments and concerns?
- As humans, we fall short of our goals sometimes. How do we fix our missteps?
- To what lengths will your remodeling contractor go to make things right?
“There is no better test of a man’s integrity than his behavior when he is wrong.” – NBA Forward Marvin Williams
Furthermore, the most cost effective form of advertising is word of mouth. It’s free and the source is trustworthy. Think about selecting your last vendor. I was recently at lunch with a group of close friends, and one of us needed some mechanical work done on their car. Polling the group not only provided her with the name of a local mechanic, but it came with the knowledge that someone she trusts used and recommended them. The beauty of the referral goes beyond the one friend who would call the mechanic the next day. The entire group at the table heard the referral being made. That mechanic who treated the customer well just got recommended to everyone within ear shot.
The opinion of a trusted friend can make all the difference in your comfort level with someone new. It’s good for the friendship, and its good for business. “… ads always say the product is wonderful, we tend not to believe them. Our friends, however, will tell it to us straight. They’ll tell us if the product is good, or bad, and as a result we’re more likely to believe their recommendation .” This is why companies offer loyalty programs and ask for referrals. When we feel good about someone we have done business with, we want to have that experience again, and share it with the people we know.
This is the most cost effective advertising in which a business can invest.
The mechanic already hired to do the work on the first friend’s car, earns the business of the second client to whom they were referred without spending another penny. Everyone benefits from this relationship as fewer dollars are spent on obtaining new business, the cost of doing business stays lower and the mechanics prices aren’t increased by the cost of advertising.
Another hurdle is a customers who doesn’t understand the work being done. This lack of understanding of the issues can pose a particular problem. Let’s face it, not everyone can fix their own car. While we can understand the main components of an engine, most of us still need someone with experience to make the repairs. Therefore, the importance of establishing trust in this circumstance is even more critical.
The Science of Referrals
A few years ago, Harvard studied 10,000 customers at a bank over three years to examine the patterns of referrals and gauge customer loyalty. Not only did they determine that happy customers brought new customers to the bank, but these customers were more loyal. They were 18% more likely to stay with the bank, and they availed themselves of more bank services than customers who came without referrals.
“In particular, we expect that referral programs would be most beneficial for products and services that customers might not appreciate at first glance and in industries where it’s hard to identify valuable prospects. ”
So, next time someone asks you for a referral, think about this. Resist the urge to roll your eyes and say “sure” without really meaning it. Don’t ignore the importance you play in their business model. The best contractors and remodelers in Maryland, Virginia, the District of Columbia, Pennsylvania and Delaware are savvy enough to know what is good for you, and thereby themselves.
In other words, generating new customers is the cornerstone of any business. A smart business knows its greatest asset to accomplish this is already in its hand. A happy customer leads to a happy life. For everyone involved.
 Is Word of Mouth Better Than Advertising?, blog by Jonah Berger, author of Contagious: Why Things Catch on
 Why Customer Referrals Can Drive Stunning Profits, Philipp SchmittBernd SkieraChristophe Van den Bulte
June 2011 issue of Harvard Business Review