Google-searching your company name may bring a smile to your face as you watch it move closer to the top search result. But most homeowners don’t search by company name, says Replacement Contractor Magazine. Instead, they are far more likely to enter a generic term like “window replacement” into the search field. Such broad searches are bound to knock your company down the Google ladder, leaving you far from generating crucial internet leads. And that’s where lead-generation companies are useful and why they tend to dominate broad topic search results.

A search for “replacement windows” by Replacement Contractor yielded three top results: Window Replacement Center, the Replacement Window Site, and Calfinder. All three sites collect information from homeowners set on remodeling and then sell that information to contractors. Lead-generation companies have become a powerful force in the Internet age. Calfinder, for example, offers homeowners information, resources, a daily blog and free estimates on a variety of home improvement projects.

Contractors, on the other hand, gain access to a vast coffer of internet leads. These leads are exceptionally valuable because homeowners feel safer using a company referred by the lead-generation site. In other words, lead-gen companies are to contractors today what word-of-mouth referrals were before the age of Google.

Not every remodeling contractor is happy with lead-generation services. Some complain that too many companies receive the same lead or that leads are not well-qualified. Yet those who are successful with internet leads are often very successful. George Faerber, owner of Bee Window in Indianapolis, estimated that 8-10% of his leads come from lead-generation companies – among them Calfinder – and that about one-third of all his business volume comes through the Internet in some form or another. (more…)

It is widely taken for granted that the most concrete remodeling leads come from past clients’ recommendations and word of mouth. This is a notion I rarely challenged. That is, until I read Mike Weiss’ recent piece for Qualified Remodeler magazine. To his credit, he is the first writer I’ve seen really form a challenge to referrals, naming them, and their status as lead numero uno, a myth of remodeling.

Photo Credit: billjacobus

Assumptions

His dissection of referrals utilizes several assumptions that remodelers too often make in regard to referred clients. These include assuming that:

• Friends of clients are always as easy to work for as the original client.
• Referrals will accept responsibility and make selections on time.
• Referrals will have the same sense of cost vs. value as clients.
• Referrals will be patient.

Indeed, making assumptions about any aspect of lead generation is not a good idea. Such a notion can breed complacency, which will usually lead to an end of referrals in general. Understanding that each client is unique, with their own sense of taste and process, is the backbone of any successful remodeling company. Yet personal inconsistencies seem hardly a reason to disqualify the referral as a quality, if not the best, lead. A contractor is measured by his or her ability to communicate and troubleshoot with any client. In terms of how an acquaintance with a client is generated, what could be a better foot-in-the-door than a personal reference?

Photo Credit: Midtown Crossing at Turner Park
What Are Your Aspirations?

The fifth and final myth, as well as the heart of the anti-referral argument, is that a contractor can build and sustain a business solely from client referrals. Referrals are inconsistent, and a successful remodeling company will create a dynamic lead generation process including advertising, community involvement, and other available resources.

Much depends on company goals or aspirations. I personally have seen contractors succeed without a stitch of advertising (one used only his church bulletin), relying solely on word of mouth and performance (although community involvement was always present). Yet these contractors did not aspire to grow into a large, several-crew outfit. They were happy with keeping it small, keeping it local, and keeping it personal. I also watched their companies wax and wane with the local economy and business cycles. They understood that business would be slow from time to time and adjusted their business plan to accommodate that fact.

Now, for a company wishing to grow and expand to its maximum potential and beyond, the idea that you can rely on referrals alone is indeed false, especially when you are trying to expand into new markets. On the other hand, maintaining a quality of service that will garner referrals when they are there to be had is still crucial. One might even say that advertising, newsletters, and others are a way to penetrate a given market, but it is referrals that will truly entrench the company.

Furthermore, remember that the work will always speak for itself (and then get clients to speak for you). One could almost include in the “referral” category a lack of negative discussion about your company. That is, a poor reputation will trump most lead generation strategies, especially when the Internet is so easily available for clients to voice their opinion for all to see. So while much depends on your aspirations, referrals, which are always based on service, are still the backbone of any company, whether they are, in their traditional definition, your main source of leads or not.

Referrals Are Tantamount to Success

So while referrals may not be numero uno for your company, they will always have an effect on your business. I maintain that referrals are still top quality leads because it is never bad to have a positive review, regardless of what it leads to. This is the very reason why online referrals are gaining in popularity. Despite their relative impersonal nature, they allow homeowners to get not just one but several referrals from past clients with just the click of a mouse.

In closing, the quality and consistency of referral leads varies widely depending on contractor and community. To assume that referrals will always be there to support your business is a certain mistake, although assuming that any lead generation strategy will be perfect is also a mistake. Yet at the heart of any company are always dedication, communication, and a quality of service. These are the characteristics that generate referrals.