Remodelers swear by repeat and referral business. For most, it’s their lifeblood, with nearly half reporting that repeat business constitutes more 40 to 60 percent of their business. A slightly smaller percentage (44 percent) holds true for referrals.

A third of those responding report that both repeat and referral business has increased 5 to 10 percent in the last 12 months, while another third report that it has increased more than that, according to a survey conducted by Qualified Remodeler.

For all of its importance, more than 50 percent of those surveyed say they have no formal program in place to cultivate repeat and referral business.

For many, their repeat and referral numbers are a point of pride tied directly to quality work and customer satisfaction. In fact, comments from a number of respondents indicate a belief that repeat business flows naturally from satisfied customers and word-of-mouth without extensive sales and marketing efforts.

“We do great work and have fantastic customer relations. Take care of your employees, customers and subs and you get great results. It is called caring,” said one survey respondent.

The other side of that view is that customer goodwill and reputation are assets to be leveraged and there is no dishonor in doing so honestly.

Most remodelers accept that passively waiting for repeat and referral business may be a luxury whose time has passed. At the very least, communicating in a variety of ways and on a regular basis with past customers is an essential ingredient to many of their business plans.

Referrals shouldn’t be an afterthought

For Charlie Allen of Charlie Allen Restorations in Cambridge, Mass., referrals are a priority, not an afterthought. “We approach it differently,” he says. “The world referral is in our vocabulary all the way from potential customers through design and development through construction and forevermore.

“I am very likely to say that even after I have collected considerable sums of money to remodel your home that I am actually not done; what I really want is a referral,” he says.

“We start every development meeting and every production meeting by asking how we are doing and inviting customers’ candor so that we can learn from and can head issues off at the pass,” he explains.

“It keeps very much alive the idea that we’re trying to do well by them in order that they would help us with a referral,” he says.

Allen doesn’t have an incentive program, but instead acknowledges referrals with a handwritten note and a personal gift. “These are our customers and we know them. We try to send a very specific and personal gift that they’d appreciate,” he says.

Allen will sometimes ask customers to hold an open house or party to showcase a finished job to friends and neighbors. In fact, he recently organized a walking tour of four projects that were in close proximity to each other and to his office. That event, he says, resulted in a significant amount of business during what otherwise might have been a difficult time.

Keeping in touch with customers is a priority and although newsletters are widely used and recommended by remodelers, Allen says he resisted them as “too corny and a little too obvious.” Now, however, he says he’s working really hard on newsletters that people will be glad to get.

To do it right, Allen is not above hiring outside help. “We know what we do well and most of our staff time and energy has to go into producing good old-house remodels on time and on budget,” he says. Newsletters, organizing walking tours and other marketing endeavors are areas where specialized help is employed.

You can’t have a “do a good job and the rest will take care of itself” mind-set and effectively get referrals, Allen concludes. “You have to talk about it,” he says.

Everything we do ...

Neil Kristianson of Crimson Design and Construction in Naperville, Ill., echoes Allen’s emphasis on prioritizing referrals. “Really everything we do, from the first meeting to last, is designed to get us referrals. I believe that if done right the clients will go out of their way to help and you don’t need to offer incentives to get referrals. If you have to pay, how heartfelt is it anyway?” he says.

“Sometimes I don’t feel like we have a formal process, but there are many things we do to keep in front of past clients. While we don’t offer incentives, we are not passively relying on our work [to generate business], either,” he adds.

We currently have the following in place, he says:

• Monthly e-newsletter to all past clients and prospects.
  
• A client thank you party/remodeling “expo” at our model.
  
• We use Guild Quality to survey all clients six weeks after end of project and again 13 months after end of project.
  
• We call all clients at six months after end of project and 12 months after end of project to ask about any possible warranty issues and, of course, ask for referrals.
  
• We ask clients to host a “wrap party” to invite neighbors and friends to view the finished project. We don’t get many people that do this, but many times they feel bad for not wanting to and therefore work extra hard to get other work for us.
  
• We hold a final walk-through with the client and all staff from Crimson to discuss any punch list items, give the client a thank you gift (bottle of wine) and to ask for referrals. If all went well with the project, it is usually a “lovefest” where the client goes on and on about how happy they are. This a good time to ask for help in finding work.

Other suggestions come from Brock Patterson of Blue Ribbon Construction LLC, Wichita, Kan., who suggests Christmas cards to past customers every year and a phone call on the anniversary date of their warranty conclusion.

Patterson also advises using a contact and customer relationship management software to generate reminders to make calls and send cards. He also suggests social networking sites such as LinkedIn and Facebook to maintain contact with customers.

The personal touch is important to many remodelers. Dennis Gehman, president of Gehman Custom Remodeling in Harleysville, Pa., makes it a point to call and thank clients, meet face-to-face with past customers and send handwritten thank you notes for referrals. Birthday and anniversary cards (weddings and remodeling projects) are on his list of things to do, as are hard-copy and e-mail newsletters.

He also suggests asking permission to enter clients’ projects in award competitions and to use photos of the projects on Web sites, portfolios and brochures.