Some of the best resources are your current leads, current prospects, current customers and former customers.  Even if you ask for a referral…why not ask again in 6 months?  You should/could be asking at every stage, from lead all the way to home owner. Ask when you have completed the job. Ask again every six months, in a more passive way, such as a 2nd thank you card, an article or some relevant information such as fall and winter notices of pilot lights, smoke alarm batteries, etc.

Do you realize the simple task of sending a reminder post card every six months for something else, and including a reminder of an offer you have for referrals, will actually produce results?  It works.  There are more suggestions below.

It is completely okay to use asking for a referral as a way to stay in touch with customers.

In fact, a CRM system can help you incentivize, track and compensate other key team members such as Project Managers/Builders/Superintendents.  If you are not asking for other key people to help keep your contact records updated, or to help with referrals, you are missing an opportunity.
More suggestions:

Who should be entering data in to the consumer’s contact record? 

Different people at different times of course; from sales people, to Superintendents, to mortgage company representatives (if you have your own mortgage company) to the warranty manager.  They should all be responsible for pushing sales, and they should all be managed, or better yet incentivized, to do just that.

Take Volume Builder A.  John Q. Public came to them through their web site, directly in to their CRM system from their web site, and during the customer lifecycle experience, he was a lead, then a prospect, then a home buyer, then a home owner.  Guess where they marketed to him, not just for his business, but for his circle of influence:

·       As a lead, with a friends and family package, whereby he could bring friends and family out to a fun event, with apple pie eating contests, games, and much more.   They got more leads.
·        When he was a prospect, they sent messages with refer a friend and you both get xyz, such as mini-blinds or something.  They would have given away the laundry room as some other incentive anyway, but this way, they got more leads.
·        As a home buyer, the builder sent hard plastic gift cards to the new home buyer to give to anyone they might want as a neighbor. The card was only valid with the home builder of course, and was valued at $500.  They got more leads.  That was a good one, because there was no benefit to the home buyer to refer other people, other than the altruistic ability to give their friends a deal. It cost the builder very little unless the person bought. It is a win-win-win.
·        As a home owner, the big builder with brains sent John Q. a private party invitation with drawings for prizes and promised a certificate for any friends or family that showed up.  Guess who got more leads?

Yes, these things come at a price.  But if you analyze this in more depth, the leads didn’t end up costing much more than other sources of leads.  Further, these leads already had a vested interest in the community.

Though many builders build and run, hoping never to encounter the buyer again, other than rudimentary warranty, other builders have successfully capitalized on doing a good job.
Most consumers do not want to profit from their friends.  However, carefully positioned and packaged incentives will produce a result, and allow you to capture part of their circle of influence.

If you build the value with them, they will feel compelled, because you are familiar to them.

If you are not being successful at capturing contacts consistently from friends of friends, take a renewed look at your marketing.  Otherwise, you are leaving money on the table, of your competitor.

 Erik Cofield, CGA has leveraged technology and provided business management consulting for all sizes and types of builders, developers and Remodelers since 2000, including volume, multi-family and custom, to help them improve their business. He is the National Accounts Manager with BuildTopia (www.buildtopia.com), a widely used international construction management software company. He is the Houston Sales and Marketing Council 2008 Associate of the Year. He is an author, educator, consultant and speaker.  He can be reached via ecofield@buildtopia.com.