Generating Remodeling Business Through Trade Referrals

If you have a Trade Secret you would like to share, e-mail Senior Editor Jonathan Sweet at jonathan.sweet@reedbusiness.com [1].

Trade contractors are often a source for job referrals, but Strite Design + Remodel [2] has created an incentive program to increase the flow of leads from its partners.

When the company’s trade partners bring a job to the Boise, Idaho, design/build firm, they’ll get a referral fee of 1 percent of the gross on the project under a program the company just launched.

Strite came up with the idea that better leverages the relationships the company has with its trade contractors, 70 percent who have been working with Strite for more than 10 years. The company works with a single company for most trades, helping to create a Strite “team,” says Marketing Manager Neil Jansen.

The referral fee encourages the subs to refer any project, while in the past they may have been focused only on jobs they might get to work on, he says. Now, for example, a roofing contractor gets a financial benefit from referring a bathroom job.

So far the program has generated a $300,000 project referred by an interior designer and a handful of other leads. Over the last 8 years, only 2.2 percent of Strite’s work has come from trade referrals. That represents $600,000, or just twice what the company has already realized this year under the new program.

“I’m not saying we wouldn’t have gotten this job without the referral program, but now we have a whole group of people out there looking for work for us,” Jansen says.

The referral fee program is part of a larger effort at Strite to find new ways to create leads. The company is also making a greater effort to target past customers for referrals and repeat business, as well as forming new partnerships with several other affiliated businesses. Strite is working on co-op marketing and joint referral programs with several local companies including a high-end furniture retailer, a building materials dealer and a plumbing supplier.

That was the thinking for Ocean Breeze Awnings & More [3], a specialty remodeler in Surfside Beach, S.C., that recently hosted a garage sale at its company warehouse.

Besides garnering attention for the company, it also helped the firm’s employees make some extra money during a slow time, says COO David Powers.

Employees brought in their own items to sell and Ocean Breeze also sold some unneeded windows and doors. Powers advertised the sale in local magazines and newspapers to generate traffic.

The company also provided donuts and coffee in its showroom to help draw people inside — although the 18-degree outdoor temperature helped as well, Powers says.

Employees made more than $1,000 from the sale, with one taking home more than $200. More than 300 people attended the garage sale and three jobs have already been sold off of the leads generated.

Powers was also one of our 2009 Young Leaders. You can read more about him and the others at www.proremodeler.com/youngleaders [4]. 

I don’t want to be trafficking in any irrational exuberance here, but several remodelers have told me January ended up being a pretty good month — certainly better than they expected.

Take, for example, Tom Kelly of Neil Kelly [5] in Portland, who told me that January leads were up 33 percent from a year ago ... and January 2008 wasn’t a bad month. Or Bernie Smith of MasterWorks Atlanta, who said he’s been on 35 sales calls the last two weeks, a much higher number than usual.

So, it’s anecdotal, and I’m not calling a bottom, that’s for sure, but at least some remodelers are seeing some positive changes. Follow me on Twitter at www.twitter.com/sweetedit [6].