Referral marketing: overlooked method generates business

Originally published in Snips Magazine March 2018

You can let things happen or make things happen” is a common saying when it comes to generating revenue.

Many HVAC market companies are just waiting for things to happen and regularly lament that the phone is not ringing. This is not a criticism; it’s just a reality because most have never been shown anything different and don’t know a lot about marketing.

The term “marketing” tends to confuse a lot of people because there are so many options available to promote your business.

Many business owners have never engaged in a formal marketing campaign. Their activities that might qualify as marketing are usually limited to some Facebook posts, an occasional community newspaper ad and of course their Yellow Pages listing. These are passive activities because you’re left waiting and hoping someone reacts. Fortunately, there are more active initiatives you can take to promote your services at little or no cost.

One often overlooked method for generating business is referral marketing. As the name implies, it simply a matter of getting other people to refer your services to their clients. These individuals usually have a certain degree of influence with their clients and often provide them with either a list of suppliers or make specific recommendations. The following is a list of referral sources that you should get to know in your community so you can become their go-to supplier. This is not an exhaustive list, but simply a primer to get you to start thinking about the possibilities.

“Most major cities have thousands of real estate agents.

Even the smallest of towns usually have a dozen or so.”

Real estate agents

Most major cities have thousands of real estate agents. Even the smallest of towns usually have a dozen or so. What they all have in common is that they are dealing with any number of consumers who are either selling or buying a home on a daily basis. Each and every one of these homes has cooling and heating mechanicals that should be checked prior to or as a condition of sale.

Getting in front of these agents can be simply a matter of inviting them to lunch or buying them coffee. Some agencies even allow “lunch and learns” where you can present in front of all the agents at one time for nothing more than the cost of a few sandwiches.

Becoming visible within the real estate community can be a wonderful revenue generator provided you can be responsive to their needs and are dependable.

Restoration companies

These companies are usually called in by home or building insurance companies after a flood, fire or natural disaster. How many of their projects require some kind of remedial or replacement work done on the HVAC equipment? Even if there is no damage to the mechanicals, how many of them should be inspected and cleaned once the renovations are completed?

Pool companies

Pool heaters are included in the installation of new pools in many areas to lengthen the swimming season. Who do they use to run the gas pipe and do the final hookup? Whom do they refer when a customer calls and their heater isn’t working? Why can’t it be you?

Insurance salespeople

Much like real estate agents, these individuals are in touch with an untold number of homeowners and commercial property owners every week. Do some policies require that the mechanical systems are inspected regularly? Some condominium corporations whose insurance companies require all gas furnaces in every unit to be inspected and cleaned every couple of years. When you think how many units there are in a townhouse complex, this could be a lucrative piece of business.

Alternatively, can these agents refer you to a client that has had a claim that required some kind of renovation but not a major restoration? Again, sitting down to a coffee or a meal may be worthwhile.

Property managers

Property managers come in different sizes and shapes. Many are small, one-person operations that are responsible for many single-family dwellings or small apartment complexes on behalf of their owners. These individuals haven’t got time to be chasing after suppliers and prefer to deal with one specialist within each trade. They also want fair pricing and responsive service. With upwards of a couple of dozen units under their jurisdiction, getting to know these individuals can become a wonderful source of ongoing revenue.

Other trades

How about electricians and plumbers? How often are they on a call and overhear customers comment about needing something for their furnace or air conditioner? How about supplying them with a handful of your business cards that they can hand out when necessary? This can be a reciprocal agreement where you also have their cards. This works best when there is some form of finders’ fee involved for every lead. Possibly a percentage of the job or a flat fee for every successful order you get.

Next steps

Get out a pen and paper, laptop or tablet and start a list of everyone you know in the above categories. Chances are you know at least one person, or you know someone who knows someone in each category. Next, pick up the phone and invite them for coffee. Tell them what you do and that you’d like to be considered as one of the referral partners. Then suggest that they test you out before making any commitment.

“You can either let things happen

or make things happen”

Will every one agree? Probably not, but you should keep in touch with them because you’ll never know when their current supplier will drop the ball. Staying in touch increases the odds that you’ll get the call if and when it happens. Start looking for opportunities to create referral sources because for those willing to step out of their comfort zone, the rewards await.

As many of you know, being in business is not a passive undertaking. It requires active engagement on many levels, all the time. Start looking for opportunities to create referral sources because for those willing to step out of their comfort zone, the rewards await. So the choice is yours: you can either let things happen or make things happen.

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SBM #62-10 Questions to Help to Overcome Business Failure

overcoming business failure

Successful entrepreneurs share many things in common. Hard work, focus, belief in themselves, hungry for knowledge and so on. One trait that doesn’t get much mention is the ability to accept and overcome failure. As entrepreneurs, failure can be a daily occurrence, but the worse is when a business fails.

To be sure there is a lot of noise made on social media and from the start-up world about “fail fast”. It is often heralded as a badge of honour and a goal in and of itself. The premise being that the sooner I fail, the sooner I’ll become a success. Failure is no guarantee of success. Success requires several skills and a lot of luck. Failure is no fun and it can be incredibly painful.

The real meaning of “Fail Fast”

The real meaning of “fail fast” is to instill the notion that if, the business is not performing no matter what you do and has limited chance of becoming profitable, then don’t wait a second longer and shut it down.

Unfortunately, most individuals hang on far too long, hoping and praying that their situation will improve. They fail to look at the cold hard facts and let their emotions make decisions. They continue to drain their resources long past the point they should, only to end up worse off. Had they listened to that little voice in their head that was telling them it was time to shut it down, they would have been better off. In many cases, they’ve let their pride and ego get in the way of making the right decision.

The dangerous duo

Pride and ego can be a dangerous duo when it comes to making business decisions. Far to often, we have trouble believing we were wrong. Worse still, is the fact that we refuse to accept reality because we’re afraid of what people will think of us. Guess what? Most people don’t care. Once they find out, they’ll ask what happened, console you and then move on. End of story.

Failing, whether fast or otherwise doesn’t mean the end of your entrepreneurial aspirations. Much like learning to ride a bicycle, few of us ever did so without falling down a few times. After a few tears, we got back on and tried again until we got the hang of it.

Business is no different, except instead of a scraped knee, business failure hurts your bank account and can shatter your self-confidence. Money can be replaced but self confidence can be a lot harder to restore.

Understand what went wrong

The best way of overcoming a business failure, is to take the time to understand what went wrong. Every business has many moving parts and therefore taking the time to assess the good, the bad and the ugly of the failure, usually brings to light the deficiencies- yours and the business.

The following is 10 of the most important questions to help you understand what went wrong:

1. Was the business properly capitalized?
2. Were expenses, unreasonable, in hindsight?
3. Was there sufficient market research undertaken before launching?
4. Was your target market clearly identified?
5. Did you have any industry knowledge, prior to launching?
6. Were you passionate about your work/product/solution or just passionate about the possible financial reward?
7. Did anyone, other than yourself, care about your product or service?
8. Did market forces change after you launched? If so, what signal did you miss/ignore?
9. Did you have the necessary skill set?
10. Knowing what you now know, would you have started this business in the first place?
By honestly answering these questions, you’ll hopefully understand what the heck happened to your dream. Being stewards of our destiny, we must accept most of the blame. Failure should be a humbling experience that opens us up to learning from our mistakes. Arrogance, although a self protection mechanism, serves no role in this undertaking because it clouds your perception and risks having history repeat itself.

Raise your game

This introspective look at why a business failed, goes a long way to restoring our self-confidence, it raises our game. Because if we ever hope to be successful, we must first believe in ourselves and put our failures behind us.

It’s not how many times we fall down that matters, but how many times we get up and do it better that counts.

I’m Greg Weatherdon and this has been your Small Business Minute.

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SBM #61 Training Your Team

Training Your Team

Reading Time: 5 mins

We all have our own definitions of training for our team, but in all honesty, most of it sucks. Sure, for customer facing team members, we do the mandatory, how to acknowledge a customer stuff, with all the expected please and thank you’s.

It also goes without saying that we spend time teaching them “the system”, whether that be a retail POS or other software necessary to capture and order or process payment. Add to that the mandatory workplace safety and theft prevention training, we usually feel pretty good about our efforts.

This whole area of training, has been a sore point for me for quite some time and two situations minutes apart has made me want to revisit this topic. The extreme difference in the size of these two retailers served to reinforce how deficient product knowledge training is compared to the above mentioned items. One is a local franchise retailer whereas the other is part of a global department store chain.

Let’s begin with the local retailer. This is a specialty store whose main business is selling coffee pods and teas. Judging by the inventory, it would appear that the majority of their sales are Keurig pods. As we were looking for a specific brand of coffee we found on a recent trip, I used the opportunity to ask a couple questions regarding the availability, compatibility and difference between the original Keurig machine and the 2.0 machine. Theses are machines that they sell along with the coffee.

One in three

After and few hums and haws, the answer I received, and I paraphrase, was “I think so”. What made this so noteworthy was that another gentleman was in the store ahead of us and was asking some, what I thought, basic questions and the clerk was only able to answer one of his three questions.

Seriously, this is a specialty store and people were asking about the products in the store. Aside from basic pricing information and availability of some products, the individual had limited knowledge. As a specialty store, the staff should well versed on all products in the store. Why should a customer even bother to make a special trip to this store, when many of the brands they offer are available at the local grocery store?

The thing is, people usually frequent smaller stores in anticipation of receiving something, whether that be service or knowledge, not available at mass merchants and most will pay a small premium for it.

The sad part is, this is a store that I had been meaning to visit more than once and frankly I had expected more. Future trips, if any, will be very infrequent. What a missed opportunity.

Within 30 minutes of the previous experience, I headed to a major department store in search of some new luggage. My current bags had been run over once too often by airport baggage handling equipment and in dire need of replacement.

After spending 20 minutes in the department checking out their offerings a staff member finally showed up. With such a wide assortment of brands available, it’s difficult to determine which ones are quality versus value.

Looking for answers

As my interest was in purchasing a quality product that would last, I proceeded to ask the clerk which were the best brands for durability. She responded by saying Samsonite and Travelpro. So I asked why Travelpro? The answer I got was that they invented the roller wheels and that an airline pilot came up with the idea. It’s one of those replies that leaves you thinking, so?

My next question, was what makes them, Samsonite and Travelpro so good? Is the construction better? To which the respondent said they have a better warranty and yes, they’re better made. Again, it left me wondering how are they better made?

What I had expected was a little more indepth answer along the lines of, they use a higher quality of materials or maybe they have greater structural support. This would have been an ideal time to show me the difference by opening comparable size items and point out the differences. But no, I was told that if I had any more questions that she would be right back!?

Clearly, this person had no idea what the product differentiators were and no doubt only sells based on price, or worse what the customer brought to the counter to purchase. The point is, I was fully prepared to purchase had I received the information I needed, but unfortunately, they were ill prepared.

Training should be mandatory and ongoing

Acquiring product knowledge is not difficult. The internet is a treasure trove of information on individual products and services. Better still, reach out to your suppliers and find out what they can do to help. Lunch and learn by manufacturer reps is just one way to get free training. Maybe the manufacturer has in-house data that they can share?

The point of all this is to say, that product knowledge training should carry, at minimum, equal weighting as processes. Taking the time to prioritize product knowledge and encouraging employees to do so on their own, will positively impact sales. The reality is that there are just too many alternatives in our hyper competitive environment, not to do so.

Yes, there has always been and always will be “tire kickers” who research products everywhere they can and then buy online or from a lower priced competitor. But that’s nothing new.

To counter that point, people are also very busy. Many just want to be served in a professional manner, by knowledgeable individuals. They are more than willing to buy from a company that will provide them the help and information they need to make an informed decision.

Training can be formal or informal, but it should be a priority, made mandatory and of course ongoing. Part of that training is to instill with the individual the desire to learn and explain the benefits of expanded knowledge, not just for the company but for the individual as well. People need to understand “what’s in it for them” and once they do, they’ll become self-motivated and everybody wins.

It’s no wonder the Amazon’s of the world are shipping more and more product everyday. Businesses of all sizes must realize that training is paramount, if they’re going to survive in this new age.

This has been your Small Business Minute

Copyright © Greg Weatherdon 2018

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