In the trades industry, a business needs to continually focus on building a strong network to be able to grow their business effectively. There are two main ways of doing this: 1) Building a referral network, 2) Building a business to business network. Referral marketing is the method of promoting products or services to new customers through relationships, usually word of mouth. Such referrals often happen spontaneously, but businesses can influence this through specific strategies. We will discuss these strategies throughout this playbook.

Networking is a popular concept, especially among local business communities. In its simplest form, networking is the process where business owners and professionals, working within an array of business sectors, meet regularly with the goal of connecting and progressing their business. If implemented consistently and with intention, it works well as a platform to market a company's products and services. Keep reading to find out who the best professionals are to team up with and how to make those connections.

Creating a referral program

One of the first things to do when starting your business is build a program to incentivize your current customers to help grow your customer base through a referral program. Referral programs can be very simple and are a great way to help generate some additional leads at a low cost to your business. In addition, referral leads tend to have the highest conversion rate since the new customers have been introduced to you by someone they already know and trust.

Every customer you work with should be offered this incentive program. You can sit back and let the referral program run itself, but the business owners who are more intentional with it will have the best results. It is important to have a consistent incentive that you use for all of your customers when generating referrals. Studies have shown that customers are 60% more likely to give you a referral if they are incentivised to do so. Here are few examples of incentives that you can provide your customers:

1. Cash - $50 for every customer they get you in touch with whom you complete an estimate for
2. A 5% discount on their project
3. A gift Card for Amazon or their favorite restaurant
4. Free Gallon of paint for them to keep for touch ups on the home
5. A free small add on to the project

As mentioned above, you have to be assertive when asking for referrals. This does not mean aggressive or pushy, but many business owners don’t even ask. Just by asking you are creating an opportunity, and by adding an incentive you are drastically increasing your chances of success. To do this effectively, you want to have a conversation with all of your customers at the end of the job. One of the last things I do before I finalize the job is introduce my referral program and directly ask a customer for a referral. Below is how you should handle that conversation:

• “How was your experience working with me and my company?”
• If they have a positive response, then they will be comfortable recommending your company to others.
• The next thing you want to do is get a commitment from the customer. This is typically what I say to the customer: “Great, I'm glad you had a good experience. Before I leave do you think you could do me a favor?”
• Customers will most likely say, yes when asked this, because they want to help, especially when you have done a great job for them.
• Really you are going to ask them for two favors at this time, one is to leave a review (this is covered in the Reputation Management Playbook), the other is to see if they know anybody who may be interested in receiving a free painting estimate. This is how I would frame the question: “Awesome, one thing that is important to me is that I continue to keep my crews busy throughout the year, and I could always benefit from an extra customer or two. Do you know of anybody who may be interested in receiving a free painting estimate? With every person you refer to me, I will provide you with (insert your incentive package here). Does anybody come to mind? A family member, neighbor or friend?”
• It is important to remember that customers may not have anybody in mind when you first ask, but if you give them an incentive, they might go to work for you. If they mention that no one comes to mind, simply say: “Not a problem, I will look to follow up with you in a few weeks, just to check up and make sure everything is still looking good with the project. If you can think of anybody between now and then, be sure to let me know!”

In general, your business will naturally generate a few leads per month through word of mouth. Combining the incentive program strategy above with your natural word of mouth should help you yield an additional 5-10 leads per month. A good goal to set for yourself early in the business is to generate 5 referral leads each month. When combining this strategy with door knocking, home shows, networking, and paid lead generation through Home Field Advantage, you will create a solid foundation of consistent lead flow from a variety of sources.

Networking Business to Business

Another great way to generate leads is through networking other professionals in your local market. In every market, there are many different businesses and professionals who are looking for painting services. The important part of networking with these professionals is taking the time to build a strong and trusting relationship. This goes hand in hand with referrals, as these other businesses will be referring your work to their clients as well. In this section we are going to discuss who you should try to team up with and how to team up with them.

Who should you have in your business network

When thinking about who you should be connecting with, you should think about what other businesses consistently come into contact with your target customer. These are the people you want to build relationships with:

1. Other Contractors - This is not necessarily other painting contractors, but more so contractors who offer services other than painting. These businesses are likely working similar customers that you are. Oftentimes, painting is the last item on peoples’ Home Improvement List when getting work done. Roofers, drywallers, flooring companies, and remodelers are all great examples of the type of contractors you want to connect with. Many other contractors don’t like to paint because of how tedious it can be, so they are always looking for other companies to refer their customers to.
2. Real Estate Agents - Real Estate agents like to have a list of preferred contractors they can recommend to their clients. If someone just moved to a new city, the person they know and trust the most is going to be their realtor, so when they ask who their realtor recommends to paint their new house, the realtor will give them your information. On the selling side, homeowners are looking to put a fresh new coat on the walls to help their property’s curb appeal and face value.
3. Property Managers - By law, property managers have to do routine maintenance on all of their properties. Whenever a property manager has turnover in their rentals they are looking to freshen it up for the next person. The one downfall with property managers is that they are typically looking for the cheapest price possible. However, if you build a strong relationship with one, over time they will pay the higher price to save themselves the hassle of looking for another painter. Even if the margins are a little tighter for you, this is still a great way to keep your crews busy during the slower times of the year.
4. Home Developers - These are businesses that build and develop homes. Many of them are General Contractors who will bring in other businesses to complete different parts of the home building process. Some developers do just hire subcontractors, however, choosing a professional painting company for them, gives them less to manage.
5. Insurance Agencies - Insurance agents that work on homes damaged from disasters such as hurricanes, hail, flooding, or fires like to have a list of preferred contractors to refer their customers to.
6. Local Paint Suppliers - Building a strong relationship with local paint suppliers such as Sherwin Williams or Benjamin Moore can be lucrative. When homeowners are looking to get painting done, they may go into the paint store to look at colors. Oftentimes they will ask their local store manager if they have any recommendations for painters in the area.
7. Interior Designers - Similar to developers, designers are always looking for contractors to help them complete work for clients. Designers typically do not do their own labor, so they want to bring in a professional to help complete the project.

How to connect with these professionals

Now that you have a good understanding of who you should connect with, let's talk about how you meet these professionals. Below are the most effective resources for connecting yourself with like minded professionals that could use your services:

• BNI Groups - BNI stands for Business Networking International. It is the world’s leading business referral organization with nearly 285,000 members in 10,500 chapters worldwide. These chapters typically consist of 20-50 small business owners in local markets. Many of these businesses are the types that you should network with. In some markets, there will be multiple BNI chapters you can choose from. Before selecting the right chapter for you make sure you look out for these things:
• Do they already have a painting contractor in the chapter? If so, find another one as you probably get denied due to a conflict of interest with another member.
• Do they have the type of businesses that would be beneficial for you to network with? Use the list above as a resource to determine if that network fits well with what you are looking for.
• What day and time do they meet? Make sure you can make the scheduled meeting times, as you will be kicked out if you continually miss chapter meetings.
• How many businesses are in the chapter? The more businesses in the chapter, the bigger your network will be. You typically can only join one chapter in your local market, so make sure you get the most out of the one you choose.

Once you join a chapter you will have weekly or every other-weekly meetings. Typically this is done over breakfast or lunch. You will connect with other local businesses and share insights on how everyone can continue to grow and improve. This is also an opportunity to have one on one conversations and potentially share referrals. If any of the other business’ clients is looking for a painter, they will refer their client to you and vice versa. I have known of some businesses that generate 70-80% of their yearly revenue from a BNI group alone. This level of success is not guaranteed, but it is typically a safe bet that you will generate a decent amount of leads each month from your BNI group.

• Chamber of Commerce - A chamber of commerce is a voluntary partnership of businesses and professionals working together to build a healthy economy and improve the quality of life in a local community. Similar to a BNI group, this is another way to build a relationship with other local small business owners. This is separate from BNI, so you are allowed to be in both.
• Social Media Another way to connect with other local professionals is by using social media. I recommend using LinkedIn as your main source of networking through with other professionals. You are able to connect with other local professionals and send messages to try and start to build a relationship. I recommend setting up both a personal account and a business account on the platform.
• Go to networking events - In many markets, there will be various business to business networking events that you can attend to help build your network. Simply look up “local networking events in my area” on Google and you will find many different options.
• Attend a home show - Many people in our industry see home shows as a great way to generate leads and customers. This could be a great opportunity to build relationships with local professionals in the area. You will typically see many other contractors, real estate agents, home developers and many other businesses at these events and it is a great opportunity for you to continue to build connections across your market.
• Proactive Outreach - This is the old school approach of just putting yourself out there to connect. Reach out on your own with a quick phone call or stop by an office to introduce yourself and see if that company would be interested in working with you. This works great with Real Estate Brokers.

Some Key things to remember with networking

1. It takes time to build relationships. This tactic will not yield great results from the beginning, but you are playing the long game here. Over time you will build many different connections, and have the opportunity to build a strong lead flow from your network.
2. Networking is a partnership, if they are providing you with leads, ensure you are doing what you can to return the favor. If someone in your network continues to give you business, and they do not receive anything in return, they are going to find someone else to work with. Doing small things like giving a gift card or a referral bonus is a great way to compensate them if you do not have leads to hand to them in return.
3. Make connections, not contacts. Don’t just meet people and gather contact information. Take the time to build relationships with these people. Take them out to lunch or join a happy hour with them. Quality is more important than quantity when it comes to effective networking.
4. Before you go into any networking event or meeting with a potential connection, make sure you have a plan around what you want the interaction to look like. Make sure you have a way to create buy-in for the other person you are meeting with.
5. Lastly, and most importantly, make sure you follow up with your network on a consistent basis. Whether you are trying to connect with someone or it is someone you have not talked to in a while, make sure you always keep in touch with your network to maximize the opportunities of the relationship

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