There's no better way to gain new customers than through customer referrals. A customer's personal recommendation adds strength to your marketing program that money can't buy.

Satisfied customers make up your strongest sales force. Product or service claims from them have instant credibility in the eyes of a prospect. When choosing an HVAC service provider, consumers are six times more likely to rely on the recommendation of friends and family than on advertising.

Here are four suggestions for boosting referrals:

1. Choose the right time to ask customers. Ideally, this is done at the moment the customer says, "Thank you."

2. Ask for an exact number of referrals. For example, you could ask, "If you don't mind, could you give me the names of three people who are as quality-oriented as you are?"

3. Tell your source how you plan to contact the people they refer, saying something like, "We will not phone them without their permission. We'll only mail them a letter with a discount coupon."

4. Offer an incentive to the referral source. You can offer "$10 Bonus Bucks" to customers for each referral to be used for future service. You can also discount your replacement sale by $20 for each name (up to $500) they provide right on the spot. (We have a form for this that has been incredibly successful.)

Just remember, even if you do offer incentives, don't overlook the fact that what you're really offering are great products with great service from a great company. That's the true incentive for referrals.

Referrals have a higher closing ratio than cold acquisitions (78 percent versus 32 percent), and no matter your incentive "payment," referrals are about one-eighth the cost of broad market customer acquisition.

June Seasonal Strategy

Techs are your key to more replacement leads in June. Repairs over $300 or 8-year-old systems should be replacement prospects.

Make sure techs are well versed in special financing offers or incentives. Do not let "declined repair" customers go without hearing from your salesperson. A maintenance agreement should be offered on every service call.

Newspapers: Service ads should be low for the rest of the summer. All-purpose and image ads can take their place. Use a hard-hitting direct response replacement ad only if sales don't cooperate.

Direct mail letters: Same advice as for newspapers, except sharpen your target for highest-value customers.

Postcards: The very last of your direct response service postcards for tuneups and preventive maintenance should be out.

Alternative media: Your yard sign presence should never be taken for granted.

Radio: Use radio to keep your name at the top of people's minds. You may include an offer, but focus more on name, image, branding.

On-hold messages: Keep messages geared toward replacement sales.

Yellow Pages: Fax us a copy of your ad for a free critique.

Hudson is president of Hudson, Ink ("Creative Marketing that Works"). News readers can get a free subscription to his "Sales & Marketing Insider" and the Marketing Budget Calculator by faxing company letterhead to 334-262-1115 or sending an e-mail to with the request. For other free marketing tips, call 800-489-9099 or visit

Publication date: 05/24/2004