Some smart restorer had to think of it first:
“Instead of me waiting and begging/groveling for the adjuster to call me on a loss why not beat the insurance company to the punch? I know! I’ll bypass the agent and adjuster by getting the plumber to refer me directly to the home owner!” (After all, who sees a flooded home sooner than the plumber???)
This proactive approach was absolute genius … UNTIL the Law of Supply and Demand caught up! (And the “copy cat” marketing approach so common in the restoration industry kicked in!)
You see, now every plumber is approached almost daily by restorers with offers of cash for every water loss referral. The problem with this scenario is you have no “strategic advantage” or what I call Leverage! (Check out my previous post on “Plumber Leverage”).
The problem is obvious. After all, if you are paying out $250 per referral then what will stop your plumber from switching to your competitor who is offering $300? So my company doesn’t pay cash rewards for referrals. Why not?
Thanks for asking! Here’s why we don’t pay cash for referrals at Aero-Dry. A) It’s just not healthy for your bottom line to be paying out large amounts of cash for a referral. And B) if anything the plumber should be paying YOU cash since you are in thousands of homes and offices every year so you are in a position to refer THEM. Plus C) you can “leverage” your business knowledge to help your plumber friend become more successful in business. (Which is worth a lot more to the plumber than a cheesy cash kickback!)
Remember that a plumber is an entrepreneur much like you and in a service business much like yours! So you must analyze what are the needs, dreams, and obligations of a plumber AND how you can help him find the same success you have! (I think this is what Steve Toburen calls “developing Strategic Partners”!)
So here are a few plumber “needs, dreams, and obligations” candidates: (in no particular order)
- Needs to grow his or her business
- Wants to provide a secure, friendly working environment for their employees
- Needs to have systems in place to improve efficiency
- Needs a succession plan for the day they retire
- Wants to be liked and respected
- Needs (desperately) to earn more income
- Wants to improve their customer service
- Need (urgently) better marketing ideas that will help him or her to stand out
NOTE: We always approach our plumber marketing efforts with the concept of “How Can We Serve As An Extension Of Your Customer Service Team?” plus “How can we help you become more successful?” (Kind of sounds like Jon-Don’s philosophy with their clients and the SFS program!) So ask yourself …
What have I implemented in my business that can be shared with my referring plumber?
NOTE: Remember that plumbers are about as interested in the equipment and big truck mounts you employ as you are interested in the type of joint solder they use! BORING! So stay focused on how you can serve as an extension of their customer service team or as Chuck Violand says answering your plumber’s question, “WIIFM?” (“What’s In It For Me”?)
Here’s some “mutual advantage” Leverage Ideas for your prospective plumber “Strategic Partner”:
1. Have you perfected a scheduling system that has given your cleaning company a competitive advantage? Can you share it with your plumber prospect?
2. Can you give your plumber a Customer Referral System that works well for you? What about any other valuable marketing tips/concepts?
3. Do you use shoe covers when you enter a customer property to protect their floor coverings? (And to create Positive Moments of Truth!) If so, give him some shoe covers to test and see if his jobs run smoother. (They will!)
NOTE: SFS graduates literally have 100’s of positive Moments of Truth ideas listed in their SFS Class workbooks. Most of these tips with a little modifying will also help your new plumber “Strategic Partner” and you can start Leveraging your relationship.
Putting your plan together
Once you have determined the geographical area that you intend to serve, compile a Plumbers Prospect List. Focus your Leverage efforts on the plumbers that meet at least two of the criteria below:
- Plumbers who offer 24 hour service
- Plumbers who only offer 8-5 service
- Plumbers who offer HVAC service along with plumbing services
- Plumbers who answer telephones live
Now that you have this prospect list it is time to LEVERAGE! In a future post I’ll get down in the trenches with exactly how we do this at Aero-Dry and share two great forms to get your Leverage Program off the ground!
Ivan
Ivan Turner is the CEO of ShowMe Marketing Solutions. ShowMe Marketing helps cleaning & restoration companies grow in a very competitive industry. Ivan has authored two books- Marketing to Agents & Adjusters, Plumbers and Building a Successful Cleaning & Restoration Business and has been published in “Millionaire Blueprints” and “ICS” magazine. ShowMe Marketing also offers a comprehensive Employee Policy Manual package that can be customized to fit your business. Contact Ivan at (573) 291-0234 or check out showmemarketingsolutions.com
That was such an amazing tips getting the water damage referrals free. I keep going through your articles and daily i got something new.
I’ve been looking around for resources that provide tips and information on running a water restoration business. It is so refreshing to finally find a place where I can get the facts I need to get started. Great article! Especially since I am a new company with limited capital and resources.
P.S. It would be great to see an article on ” How to setup direct insurance billing”, so you can get paid by insurance companies. Thanks again.
Wipeout Water Restoration Inc.
Thanks Steve. This was a helpful article. We’re still working on putting together a plumber marketing campaign and this definitely helps!
Good stuff.
We are a new start-up water loss company to add with 40 years of commercial asbestos remediation. The plumbers in my service area are getting $700.00-$1300.00 cash per on-the-job lead. Everyone is paying on average and some are offering more.
I did some hands-on Marketing Research in areas that we don’t service and because we were not going to be the companion, I got some straight answers.
I was told that the cash referrals are never under $500. Some are based on a percentage of the job, but most Plummer’s prefer cash in hand.
One water restoration owner that I spoke with told me that for marketing, the plumbers are key. He said either have a full-time plumber on your payroll or keep them happy.
Last year they paid out $95,000 to plumbers for their referrals
and that generated over 2.5 million in sales. He said that they have a
sliding scale of $500-$1,250 per lead and
that his system was preparatory and I would have to figure out my own
scale but to use those numbers. That is easy to figure out based on the size of the job.
They also spend $140,000 a year on Professional sporting events tickets and they do deep-sea fishing trips and other fun events for marketing.
I agree with your approach if everyone that was playing played by the same rules.
It does sound like a kickback and a lot of money. but, if you can add more value to the customer, you will get it all back and it would be the money you are paying your marketer for their 3-7% commission anyway, you’re just paying it upfront.
We are a one-stop-shop. Asbestos, Lead, Mold, Water, Pack out/Pack back, and the Repairs. Anything that we don’t do, we sub out 10/10.
On a medium-size loss on up, we will do most or all of those services, and giving the Plummer $1,200 is only $200 per lead per service.
You can also reverse the referral fees on the Plummer’s when you are on a job and the customers need plumbing services. There is no difference and this could lead to a referral-based only agreement between you at some point.
I think until you can establish that kind of friendship/partnership that Cash Is Still King.
JP GRILLO