November 10, 2023

How to create a plumber referral program

 A tradesman talking into a tin can connected by string to a tin can held by a red headed lady

Word-of-mouth marketing produces 5x more sales than paid ads.

The numbers speak for themselves. Whether you’re a small plumbing team just starting out or a cross-state business operating all over the US, having a good referral scheme in place is a must.

But what should a plumber referral scheme look like and how should you go about implementing one?

We’ll answer these and all your related questions in the article below.

How effective are customer referrals?

Customer referrals are very effective, they create up to 65% of new business and produce new customers with a lifetime value that is 16% higher than other leads.

For plumbing businesses, referrals are still the predominant form of lead generation and when combined with a referral program can greatly increase the number of customers a business serves.

What makes a successful referral?

To deliver a successful referral there are a number of key parts you need to get right.

  • Firstly you need clear terms and conditions so that those wishing to refer someone or those receiving the referral know how the process works.
  • The referral offer needs to be easily shareable so that it can be passed around and shown to the target.
  • A reward is needed for both the person making the referral and a reward for the person who is being referred. This provides an incentive for both parties to engage with.

Remember the best referrals come from an authentic recommendation.

If a person genuinely values your service, wants to support your business and thinks the person they are recommending can genuinely benefit, then this is what produces the best results.

What should be included in a referral program?

The first thing to remember is that there is no one-size-fits-all template that can be applied to all plumbing businesses. Although there are general rules you can apply, the most important part of creating a good referral scheme is to tailor it to your specific business and customer demographic.

That being said there are still some important essentials that should be included in a good plumbing referral scheme.

The incentive

This is the first part to get right.

You need to have the right incentive so that customers are motivated to share your business.

One of the most simple incentives is to offer a discount on a future service or piece of work. This has the dual benefit of providing you with a referral but also commits the referer to future work with you - if they want to claim their discount.

The other option is to offer a cash incentive, however, you should be careful with these as they can quickly become expensive.

In fact, studies show that a reward alone is enough to motivate people, an increase in the value of that reward doesn’t correlate with an increase in referrals.

So if you are going to give a cash reward, keep it small and simple. Work out how much a new customer is worth to your business and then quantify how much you can afford.

However, do bear in mind that in most instances cash incentives are less effective, with non-cash-based rewards creating a 24% increase in performance. A good way to go might be something like a simple Amazon voucher.

Whatever reward you choose to go with, a good idea is to give tiered rewards based on the value of the work that is referred.

Terms and conditions

When designing your referral scheme, it’s important that you make sure you have clear terms and conditions and suitable information explaining how the referral scheme works.

As a plumbing business, you should consider some of the following points:

  • How many referrals you will accept per person
  • When the reward will be applied
  • What types of work you will take referrals for and (what work you won’t)

Status updates

As part of the referral process, you should ensure you keep your customers as informed as possible. This means letting them know once the person they referred has signed up and at what point they will receive their reward.

A simple email could be a good way to go, confirming the referral has gone through and providing the next steps on how to claim their reward.

How to promote your referral scheme?

Once you’ve got your referral scheme in place you need to think about how you’re going to get your message out there.

Set up a landing page

The first thing to do is to set up a unique landing page on your website. This is a page on your site that contains all the information about your offer.

This provides you with a space where you can clearly lay out your offer and include all the information needed. It can also rank independently on Google search, meaning those using web search can find your page organically.

You can also use this page to send people directly to your offer while keeping them on your site.

Ask for referrals

It may sound obvious but the best way to get more recommendations is simply to ask for them. This is fairly straightforward to do, the part you need to get right is asking at the correct time.

But when is the correct time?

To give your business the best chance of getting a referral you should direct your engineers to ask for a referral whenever the customer gives a positive response to the work that has been done.

For example, if a field agent has just finished fitting a new boiler and a customer thanks them for their good work, at this point, they should ask the customer if they’d be happy to recommend them. The plumber can then provide the customer with a shareable link or direct them to your landing page.

The engineer can also instigate this by asking the right questions. After completing a piece of work they should follow up with a question such as,

“Did our service match your expectations?” or “Are you happy with the quality of our service?”

If the customer says yes, then your engineer can ask them for the referral.

Make sure you do this before sending the invoice. If you send it afterwards they’re more likely to ignore it as the customer will perceive the work as complete and therefore subconsciously consider that relationship as closed.

The other way to instigate this recommendation is to ask the customer,

“Based on your experience with us, would you recommend us to any of your friends?”

Follow this up by asking,

“Who did you have in mind?” or “Who do you know that would benefit from our service?”

The engineer should then process the referral there and then. Either get the customer to complete it on the engineer’s phone or tablet or use a shareable link such as a QR code.

Sometimes it can be necessary to ask the customer for the referral twice as they may not initially come up with someone to recommend. Usually on the second request, they’ll have someone.

Sharing your promotion

A good referral scheme is no use if people don’t know about it. To get it in front of the right people you need to share it.

Start off by creating some social media content introducing the scheme and how it works. You can share it on Facebook and any other channels.

This shouldn’t be a one-off approach but remind your social followers of the deal periodically so any new sign-ups are introduced.

Alongside this, use your email list to promote your offer and encourage people to forward it on.

You should also look into methods for easily sharing your plumbing referral such as scannable QR codes. This method allows a person to scan a code from their phone which will take them straight to your landing page.

The other benefit is that codes are easily shareable, whether they’re displayed on a phone, shared in an email, posted on socials or even handed out on flyers it makes it simple for people to reach your offer.

Service plans and referrals

If you use service plans these are an ideal system for using referrals. With service plans, you are able to build a more long-term and established relationship with the customer.

This makes service plans ideal for getting referrals as customers already have an established relationship meaning they are more likely to recommend your business.

Use this base of customers to test out your referral campaign and expand from there.

If you’re interested in setting up service plans for your plumbing business then Payaca provides a streamlined system that will allow you to do it very easily.

Final thoughts

The true value of a plumber referral program can only be found through its measurable outcomes.

To gauge its effectiveness, focus on quantifiable metrics such as the conversion rate of referrals, the retention rate of new customers acquired through the program, and the return on investment.

These figures will provide clear insights into the program's performance, allowing for data-driven adjustments to optimize the campaign.

A well-monitored referral program not only reflects the health of your customer relationships but also serves as a strategic asset for sustainable business growth.