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Marketing Mastery: Creating profitable referral relationships

July 3/10: Volume 32, Issue 2

By Jim Augustus Armstrong

 

(Third of three parts)

Screen Shot 2017-03-06 at 10.45.16 AMIn parts one and two I presented strategies for developing and nurturing referral relationships with other businesses, and how those relationships can generate $250,000 to $1 million or more in annual revenue with extremely low marketing costs. Essentially the goal is to round up, nurture and profit from a herd of businesses that send you ongoing referrals. In this part I’ll cover more strategies for nurturing and profiting from your herd.

Affiliate appreciation events
Let’s say you’ve got 20 businesses in your herd. Here are some events you can host to nurture the relationship and position yourself as the “hub.”

Host a drinks and hors d’oeuvres networking event in your showroom. Send a series of email/print invitations to your group. Hire a photographer to take photos for your newsletter.

Throw an appreciation dinner at a hotel and give awards to the top referrers. You can defray the cost by having other business owners speak during the dinner. This gives them exposure to your group and provides valuable information. Have them each pay one-third of the event’s cost.

Educational events
Every month I co-host the FCNews Marketing Mastery webinars with Ken Ryan, senior editor. Oftentimes these webinars feature business experts speaking about topics that apply to any industry. Invite your referral partners to attend at your store. Set up a large monitor and seating, and provide snacks and drinks. This demonstrates to your partners that you care about their success and provides a great networking opportunity.

Affiliate marketing
Let’s say you’re working with an interior designer. Offer to send your monthly newsletter to her list and include her photo and business name on the front page, alongside yours. Offer to either split the cost or pay for the entire mailing. The cost is worth it because you’re now marketing to an entirely new list of customers who already know, like and trust her. The designer is the ambassador introducing her customers to your business. A dealer in Utah did this very successfully with both a designer and a realtor. This produced ongoing referrals to his business, including a $40,000 job from one of the realtor’s customers.

You can take this idea further and do a host/parasite mailing. This is a bit more complicated but I’ve made a lot of money doing it. Here’s how it worked when I did it with a designer:

I wrote a letter from the designer to her customers. This letter had a photo of her at the top and introduced me and my business to her list. In the letter she raved about my business, and said “enclosed is a letter from Jim with a special offer because you’re a customer of mine.”

Underneath this letter was a second one from me with my photo at the top. It thanked the designer and had a special offer “exclusively for customers of XYZ.” The letters were on slightly different colored paper and written with different fonts.

I made it easy for the designer and handled everything: writing the letters, and handling the printing, postage and mailing. The only thing the designer had to do was supply me with address labels. I made at least a 20-1 ROI with this campaign and repeated it several times.

 

Jim Augustus Armstrong specializes in providing turnkey marketing strategies for flooring dealers. For a complimentary copy of Jim’s book, “How Floor Dealers Can Beat the Boxes and Escape the Cheap-Price Rat-Race of Doom Forever,” visit beattheboxestoday.com.

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Marketing mastery: Creating profitable referral relationships

May 22/29, 2017: Volume 31, Issue 25

By Jim Augustus Armstrong

 

(Second of three parts)

Screen Shot 2017-03-06 at 10.45.16 AMIn part I of this segment, I outlined the reasons why developing referral relationships with other businesses is such a powerful and important strategy for growing your business. I also presented two strategies for developing these relationships. Here are some additional ways to create these referral relationships.

The 3-step system
Step 1: Send letters to 10 business owners with whom you might want to work.
Realtors, designers, remodeling contractors and carpet cleaners are a great place to start. Make sure these companies have good reputations. Tell them about your business and that you would like to meet with them to discuss the possibility of developing a referral relationship. The letter should include a grabber to get their attention and set you apart. I’ve used dollar bills, lotto scratchers and dozens of other enticements. Always tie the letter in with the grabber.

Step 2: Call the business owner. Don’t try to sell him anything during this call. Your only goal is to schedule a meeting to discuss the possibility of working together to help each other grow.

Step 3: The meeting is where you establish the relationship. Make sure there is a synergy between the two of you and ensure you can work together. You don’t want to partner with a jerk. Discuss each others’ goals and what a mutually beneficial relationship would look like. Ask if you can stop by his place of business and leave business cards or other information.

Nurturing the relationship
Let’s say you begin a relationship with an interior designer who owns a brick-and-mortar store and has four designers on staff, plus a receptionist. You want to make friends with every one of her employees, including the receptionist, because these people will send you the majority of referrals. Stop by her business and introduce yourself to her staff. Bring cookies or other treats to leave behind. Leave a business card holder full of your cards on their front counter so they can give them to clients.

Don’t assume these people will remember you. Within a week you’ll be forgotten unless you continue to nurture the relationship. Subscribe each employee to your monthly newsletter. If there are seven people who work there, send seven newsletters personally addressed to each employee.

Drop by their business every month or two with goodies. If they are sending you a lot of referrals, send in lunch for the entire staff. Drop by around the holidays with seasonal treats.

Your goal is to become a hero to the business owner and the entire staff—to be their friend. You’re doing this for one sole purpose: When one of their customers needs flooring, they’ll instantly think of you and you’ll get the referral.

This may sound like a lot of work, but consider these numbers: Let’s say your average ticket is $3,500 and you have referral relationships with 20 businesses, each sending you a paltry four referrals per year. This equals $280,000 in revenue with few marketing costs. Imagine if you developed 40-60 referral relationships. You could easily add $1 million or more to your annual revenue.

In part III I’ll reveal creative ways you can do affiliate marketing with businesses who send you referrals.

 

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Marketing mastery: Creating profitable referral relationships

May 8/15, 2017: Volume 31, Issue 24

By Jim Augustus Armstrong

 

(First of three parts)

Screen Shot 2017-03-06 at 10.45.16 AM“How many realtors send you referrals?” I was on the phone with a dealer from Texas, trying to determine where his sales were coming from. He mentioned he worked with some realtors who sent referrals. His answer: “five.”

“How much revenue did these five realtors generate for you last year?”

“About $100,000.”

“That’s an average of $20,000 per realtor,” I said. “Imagine if you had 20 more sending you the same amount of business. That’s $400,000 in additional revenue with no extra marketing costs.”

“Wow, I’d never thought of it that way before.”

Many dealers don’t, which is too bad because acquiring new flooring customers through advertising is getting more expensive and more difficult. There are a variety of factors affecting this, including the sheer number of advertising channels (both online and offline) and the fact that consumers are more skeptical than they were 15 years ago. This is why you should market to your past customers. They already know, like and trust you, they have a shorter buying cycle and it’s far easier and cheaper to get them to buy from you and send you referrals. A monthly newsletter—supplemented with a short email newsletter—is the most effective way I’ve found to market to past customers.

Now let’s assume you’re already doing that. What’s another group to tap that has some of the same characteristics as past customers? Characteristics like built-in trust, lower price resistance, a shorter buying cycle, higher margins, etc.? The answer is referrals from other businesses. Realtors, interior designers, remodeling contractors and carpet cleaning companies are just a few of the businesses that can send you referrals. Let’s look at some ways you can quickly establish relationships with multiple businesses.

Networking groups. BNI and LeTip are two well-known networking groups that exist to exchange referrals and help grow each other’s businesses. Only one business category is allowed for each group, so there will only be one flooring company. Check out your local chapters and join if there is an opening.

Civic groups. Rotary, Lyons, the Chamber of Commerce and other civic groups exist to help the community, not to exchange referrals. Directly trying to get sales or referrals at these meetings is not very effective—a different approach is required.

First, introduce yourself to people who own businesses that are most likely to send you referrals. Second, devote most of the conversation to talking about their business. Third, ask them how you can help them spread the word about their business. Fourth, after the event send them a hand-written notecard with your photo, business name and contact info. Tell them you enjoyed meeting them, and mention something positive about their business. Also, add them to your newsletter mailing list. Finally, phone them a couple of weeks later and invite them out to lunch or coffee. This is the time to talk about establishing a referral relationship.

In part two I’ll cover another strategy for establishing these relationships, and how to make these relationships as profitable as possible.

 

Jim Augustus Armstrong specializes in providing turnkey marketing
strategies for flooring dealers. For a complimentary copy of Jim’s book, “How Floor Dealers Can Beat the Boxes and Escape the Cheap-Price Rat-Race of Doom Forever,” visit beattheboxestoday.com.