The Power of Referral Marketing in Construction

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Contractors are always looking to keep their crews busy with current and future jobs in the pipeline. You want to be able to leverage the ability to continually get jobs whether the construction market is booming or experiencing a slowdown. One of the best ways to boost lead generation is via referral marketing or word of mouth.

Customers Are Trustworthy Cheerleaders

Referral marketing enables you to leverage the power of the good work you do by asking for customer referrals. Humans are by nature social creatures, so asking clients to share their experiences and stories with others (friends, family, business associates, and colleagues) about your firm, crew, and the work you performed for them is expected.

Existing clients are also your best advocates. According to Nielsen, 84% of consumers trust recommendations from those they know. Referrals also influence up to 50% of all purchasing decisions, according to McKinsey. They enable you to stand out. Consumers actively seek referrals, and they can be the deciding factor between two similar businesses in the same geographic area.

Developing a Referral Marketing Strategy

Unfortunately, we don’t ask for referrals often enough and, therefore, miss word-of-mouth opportunities for new business and projects. Here are several tactics to use as part of your referral strategy.

  • Implement an organized system (including training employees) to automatically ask customers for referrals after a job is completed.
  • Provide customers with additional business cards to share with family, friends, and colleagues. Ask them to let everyone know how happy they are, for example, with the kitchen renovation, new pool or roof, or family room extension you completed.
  • Ask clients to post and share their satisfaction with your work on social media – Twitter, Facebook, and Instagram. If they can post before-and-after project photos, that would be great. This will help promote your work, build social proof and currency to influence others to use your construction firm, and help you expand your target base and create a wider network of like-minded friends who are engaged with your business. You can also share the client posts – testimonials and referrals – on your own social media platforms.
  • Include testimonials on your website and in the “Reviews” section of your Google Business Profile. When someone searches for a contractor in a specific area and your name comes up, be sure your Google Business Profile is set up with all your contact information, including your referrals.

 

Referral marketing is cost-effective, as it facilitates the sales process using trust you’ve already built. According to marketing firm Social Media, 60% of marketers say that referral programs generate a high volume of leads, and 54% say that referral programs have a lower cost per lead than other channels. Also, when a potential customer’s friends and family do the marketing, the customer is far more likely to convert. Any direct recommendation of your services is far more effective than an impersonal, indirect advertisement.

 

Sources: Nielsen, McKinsey, Social Media