Double Your Close Rate By Turning Every Lead Into a Referral. The average close rate in the home improvement industry is around 30 percent. The average referral lead closes above 60 percent. We categorize leads by their source and evaluate their quality by the rate at which they close.

We assume that referral leads are twice as likely to close because the source was a satisfied customer.

Not so.

It may have been Einstein who said, “Lunch always follows breakfast but, regrettably, breakfast does not cause lunch.”

It’s not the source of the referral lead that causes the better results. Rather, it’s the fact that every referral lead carries with it the personal endorsement of a trusted third party. If an ordinary lead—Internet, yellow pages, TV, canvass, homeshow—came with the personal endorsement of a trusted third party, it too would close six out of ten.

The challenge, then, whatever the lead source, is to discover or create a connection between your prospect and one or more of your satisfied customers. Do that and you can turn every lead into a referral and consistently close above sixty percent.
Preparing to Run the Lead

When you receive a lead, go to work before you go to the car. Go to the company customer database to locate the two or three installations closest to the lead address. Spot those addresses on the map or program them into your GPS navigator. Then plan your travel to put you in the neighborhood at least 30 minutes before your appointment. Call each customer from the car. Explain that you’re visiting a homeowner in the neighborhood and ask if you can stop by.

Turn a Neighbor into a Referral

When you arrive at the first installation address, introduce yourself to Mr. Smith and ask Mr. Smith about his experience. If there is any dissatisfaction, call your office and set wheels in motion to solve the problem. Ask the Smith’s if they know your lead, the Jones’s over on Oak Street, and if you might bring the Jones’s by in the next hour or so to look at the job. Ask, “If the Jones’s couldn’t come by, would you share your thoughts over the phone?”

The Neighborly Visit

As you warm up the Jones’s, your prospect, mention the Smith’s over on Elm Street. Explain that the Smith’s faced a similar decision and chose your company to do the work. Say that the Smiths would welcome a visit to see the job and they’re happy to share their experience. Actually put Mr. and Mrs. Jones in your car and drive to the Smith’s. When you arrive, make the introductions and allow the Smith’s and the Jones’s to interact. You may ask a few pointed questions to open the dialog, but keep your involvement to a minimum.

If, for some reason, you cannot take the Jones’s to the Smith installation, make certain that they talk to the Smith’s by phone. If they are slow to dial the phone as you’ve ask, take charge. Call the Smith’s on your own cell phone, put the call on speaker and start the dialog. Make mental note of the Smith’s remarks so you can repeat them verbatim at close.

Referrals are The Foundation of Your Presentation

A prospect chatting with a satisfied customer, face-to-face or on the phone, builds your credibility more than all the certificates and licenses you could claim because it allows the prospect to ask their own questions of someone who faced the same decisions and harbored the same fears. Once a past customer has vouched for your honesty and competence, everything you say in your presentation will be seen in a better light.

Making that connection between your prospect and a happy customer is your first and, perhaps, biggest selling challenge. It’s not easy, but when you’re tempted to move on to the presentation without that connection, remember the numbers. Make every lead a referral and you’ll double your close rate.