By Dave Braun
LO President

After 25 years of great service, my deck now officially needs replacing, making this my first experience in deck building. I inherited this deck when I moved into my home.

Unlike many of our multi-talented LO members, my wife will attest that I fall firmly into the “not handy” category and need outside help when tackling household projects. Knowing that I couldn’t go this alone, I immediately thought about how I took care of other past fixes that were needed at our home.

Last summer, our driveway was in desperate need of re-paving. My wife and I bumped our way up and into our garage for several months because the asphalt right in front of the garage had settled. I was unsure of who to call for this job (I didn’t want the entire drive replaced, just mended to make for a smooth entry into the garage).

I mentioned our driveway situation to one of our employees. He instantly recommended that I contact one of his friends, who had done similar work for him. I met with the recommended driveway paver shortly thereafter. Despite a slight language barrier, I felt very comfortable hiring this man to do the job, because I knew that I could trust my employee to recommend someone who was capable and honest. Just as promised, our driveway was finished exactly as we had requested and even more quickly than we had expected.

Around the same time last year, we needed some electrical work done at the house. I was having dinner with a friend, who had recently moved and had a great deal of electrical work done. During our conversation, he happened to mention how happy he was with the efficiency of the workman he had chosen.

I couldn’t believe my luck and asked if he would mind passing along the electrician’s contact information. After meeting with the referred electrician, I booked him for the job. I can honestly say that I didn’t choose him because he had better prices than the other electricians we spoke with, but simply because I “felt better” about the fact that my friend had approved.

So, as you might have guessed, instead of searching for an unknown builder for our deck, I consulted friends and family for possible referrals. As soon as I mentioned that we were replacing our deck, my dad said, “Oh yes, you have to use my guy!” He even offered to call him for me. My dad was actually excited to pass along the name of a workman, who he believes will do as great a job for us as he did for him.

It seems that every business recognizes the value of referrals, but do we think that they are worth asking for them? As someone who likes to consult the facts, I wanted to see whether or not there was any data to back up the notion that all businesses shouldn’t wait around for referrals to come to you, but to actively seek them out.

A study conducted by the University of Pennsylvania on referral programs, followed the customer referral program at a bank. The study found that referred customers were both more loyal and more profitable than other customers.

It seems that not only do referrals save advertising costs, even if you had an unlimited advertising budget, referred customers are more loyal and more profitable. A LinkedIn resource on referrals recommends these five simple steps to maximize referral potential:

1. Encourage your most satisfied customers to refer your business
2. Offer an incentive
3. Track results
4. Thank referring customers
5. Make it easy to refer your business

Just like Mom and Dad always said, “It doesn’t hurt to ask!”

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