what do you consider a referral?

I always thought of a referral as someone who contacted me because of the good job we did for there friend,family member,etc.I just read that some companies ask clients to give them contact information for there friends,family,etc.for the tree company to use for marketing.They call this a referral.The people listed may or may not need tree work,probably don't know they've been listed,they might not even have trees
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I dont know if i've worded this in a way you can understand,but this seems like a strange approach.Does anyone here on the buzz do this?
 
interesting,i never thought of doing it that way.I would think people would be hesitant to give out the contact information of family and friends,especially if they think your gonna flood there mailbox and ring the phone off the hook.What do you guys think?
 
My version of getting a referral is simply reminding the client we need more work. If any of their friends have tree issues don't forget to remind them who to call. Quite different from cold calls or door knocking. Everybody wins. I get work, the client gets to refer a good service to a friend, the friend gets good service they have confidence in.
 
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My version of getting a referral is simply reminding the client we need more work. If any of their friends have tree issues don't forget to remind them who to call. Quite different from cold calls or door knocking. Everybody wins. I get work, the client gets to refer a good service to a friend, the friend gets good service they have confidence in.

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This is my take on it. I'd substitute "want" for "need" more work.

Win-Win-Win.

If the current customer says that they have a friend, I'd politely ask the customer if they would be sure to give them a ring with my contact information.

Once, a customer has given me a nearby friend's phone number, which I called, explained the situation, and asked if he would like me to come by while I was near. He did. We talked. A year later he called back for a bid, and scheduled the work.
 
To fully answer the thread's question:

I like the Dictionary.com answer. "A person recommended to someone or for something."

I think of a referral as a totally random event/conversation between a happy customer communicating our services to a friend/family member in need of our service.

Therefore, a referral is out of our control. We never know how or when the referral will come our way. We (the business owners) are not involved with the promting of the converstation.

60% of my business is driven by repeat customers and referrals. If I want referrals to come my way. I feel as if I must do impeccable jobs from start to finish. I try to earn a referral.
 
Yeah, I agree the word is affected by semantics and I'm probably not going to add anything new to this thread but I wanna type!
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A referral can be "please give us a name we can call" or someone contacts us because "so and so told us you did good work and we'd like to hire you"

In any case a referral is basically a prospect you come in contact with primarily due to a third part who either recommended the prospect to you or you to the prospect.

We don't ask our customers for names but we frequently are told by our customers that 'Edna down the street wanted you to call and set up an appointment.'

Personally I hate making such calls because I feel I'm intruding. But, I have also learned that if my customer says Edna wants me to call, then I had better call because it reflects bad on my customer if I don't.

And even though we don't ask for names we do ask them to tell their friends and neighbors about us. That has paid pretty well too.

We did work for a young buck one year but we screwed up teh job by hitting a shed. We made good on it and ended up doing a huge job for his neighbor as a direct referral.

Two years later we did some work for another guy by the same name as the young buck. The following year we did work for a third guy by the same name and a second job for the second guy as well.

Turned out they were youngest brother, middle brother and father and had been referred right up the line.

Those 3 guys landed us at lease a dozen other jobs without advertising.

Can't beat that for referral based marketing.

Do it right, do it with excellence and always exceed your customer's expectations and there is no reason you cannot be overwhelmed with help from your customers.
 
Now. There is a referral incentive based marketing approach...

I tried to get this rolling back in 2007, but my business was way too busy for me to implement the plan well.

For a couple of months I sent out a thank you card after every job. Inside of the card I had a paper stating the referal incentive:

--$15 Dollar gas card for any job scheduled between the ranges of $100-$500 dollars

--$25 dollar gas card for any job scheduled for all of those that were higher than a $500 dollar job.

For a short period of time I did this, it did well. I basically got overwhelmed with all of my other responsibilities and this new program. So, I stopped sending out the referral insentive papers to customers. I'm pretty sure I'll reinstate the program when I have a part-time (or full-time) office person.

I learned a great saying a while back;

W.I.I.F.M.? What's in it for me? If we ask a customer to give us a referral, then we'd better be ready to give them something back.

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Gifts up to $25 dollars are tax deductable (when they are for customers). So, we can write this expense off just like advertising expenses.
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Gifts up to $25 dollars are tax deductable (when they are for customers). So, we can write this expense off just like advertising expenses.
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Rebates, discounts and payment for services rendered are fully deductible.
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I've never heard of incentive gifts of any size not being fully deductible. In essence they have paid for what you are giving them so I'm not sure why there would be a $25 limit. Where did you find the limit info?
 
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In essence they have paid for what you are giving them so I'm not sure why there would be a $25 limit. Where did you find the limit info?

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The IRS. <-------Click on that link. It shows the rules for giving gifts and examples.
 
If a client indicates they know someone who needs/wants some tree work done, I usually ask for the contact info explaining that I understand they are busy people and that I'll let the person know that I was referred by them. This puts the process in my realm of control.

I'd rather give a gift after the fact then use it as an incentive to generate business. This way the referral is based on the good work not the good gift.
 
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If a client indicates they know someone who needs/wants some tree work done, I usually ask for the contact info explaining that I understand they are busy people and that I'll let the person know that I was referred by them. This puts the process in my realm of control.

I'd rather give a gift after the fact then use it as an incentive to generate business. This way the referral is based on the good work not the good gift.

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What if you only give the gift if you get the work?
 
ThanX for the link Jamin.

That helped organize my understandings. Basically if the gift is one you give not contingent or attached to a particular transaction then it is a GIFT and falls under the limits of deduction.

It would be like giving the landscape manager at the golf club a fifth of booze as a thank you for hiring your company. The same for sending all your clients for the year a Christmas gift.

Basically falls within the context of limiting the excesses of wining and dining clients.

Compensation for referrals, on the other hand, is fully deductible because its payment is based on a particular performance or exchange with the recipient, especially if the recipient can repeat the performance/exchange and expect additional compensation.

That would slide it into the category of commission and not gift.

If you advertise a referral bonus that just makes it even more clear in the eyes of the rules that it is deductible.

If you gave a gift (such as a bottle of maple syrup) at the conclusion of <u>every</u> job that would likely not be a "gift" as one goes with each job. That would therefore be considered sold goods and is deductible accordingly under cost of goods sold.

As usual it often comes down to semantics and the government is full of them.

BTW the question of deductibilty versus expensibility is different altogether. Every penny spent is expensible but not all are deductible for tax purposes.
 
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If a client indicates they know someone who needs/wants some tree work done, I usually ask for the contact info explaining that I understand they are busy people and that I'll let the person know that I was referred by them. This puts the process in my realm of control.

I'd rather give a gift after the fact then use it as an incentive to generate business. This way the referral is based on the good work not the good gift.

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What if you only give the gift if you get the work?

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That's the general idea.
 
I ask for referals from every customer, twice. I have a note on the bottom of my invoice that says" if completly satisfied tell a friend, if not tell me." I also ask for a referal when I finish the job.

I also offer a referal incentave to other local tradesmen. If they call me with name and number, I'll figure in a 10% "birddog" fee to pass on to referrer
 
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I ask for referals from every customer, twice. I have a note on the bottom of my invoice that says" if completly satisfied tell a friend, if not tell me." I also ask for a referal when I finish the job.

I also offer a referal incentave to other local tradesmen. If they call me with name and number, I'll figure in a 10% "birddog" fee to pass on to referrer

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Nice tips there Chad. I like the bird dog term!
 

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