Reference Lists: How Happy Customers Can Help Your Business
Customer references are a business basic, as important for building service contractors who have been in business for decades as they are for a company just starting out. Along with a solid balance sheet and a good credit rating, references vouch for the quality and expertise of a BSC’s operation. Perhaps that’s why some BSCs say they’re only as good as their last reference.
“Your biggest asset is your references, because word of mouth is the biggest thing in our industry,” says Matt Sullivan, president of Miami-based Coastal Building Maintenance. “You can market until you’re blue in the face, but references are an important part of solidifying any deal.”
Like many BSCs, Sullivan has found that a good reference from a happy customer will do more than help to convince a new client to sign on the dotted line. References are also useful in promoting the business — Sullivan’s company Web site features testimonial statements pulled from its list of references, for instance. In addition, simply asking for a reference can yield helpful feedback from existing clients, and reference lists can be targeted to assure a variety of clients that a given BSC’s company is the one they want to choose.
The larger the customer, the more likely BSCs will be required to submit references, says Mark Browning, president of Varsity Contractors in Pocatello, Idaho. As a result, Browning’s managers have developed their own policies and practices for making sure they maintain the references their company needs to grow. He says they start and finish by communicating with their existing customers.
“We visit with clients about their willingness to serve as a reference,” he explains. “And if they do provide a reference, if someone calls them, we follow up with a call to thank them.”
Even before approaching a potential reference, though, industry consultants caution that the first step is so obvious that BSCs sometimes overlook it.
“You need to make sure that the customer is really, really satisfied before you ask to use them as a reference,” says Dave Frank, president of the American Institute for Cleaning Sciences based in Highlands Ranch, Colo.
Because building owners and facility managers are busy people, BSCs should understand that not everyone can or wants to field phone calls from people inquiring about a cleaning service.
“You’re asking somebody for a lot,” Frank says. “It had better be somebody you’ve got a real good relationship with.”
BSCs ignore this basic step at their peril, adds Jim Peterson, who is in charge of sales at Germyn’s WallMaster in Eugene, Ore.
“Make sure those core references are happy,” he says, “because it’s a lot worse if you get a bad reference than if you don’t have one at all.”
In addition to being satisfied with your services, a good reference is one that comes from a company that is, itself, seen as successful. In effect, their strength becomes a BSC’s strength.
“In any community, there are certain big players out there that are known by the community and have more influence,” Peterson says. “Those are good references to have because they have a lot of pull and weight in your community.”
A good reference reflects a BSC’s relationship with the company over time. For this reason, most BSCs and industry observers recommend using businesses with which BSCs have worked for at least six months and preferably for a year or more. They advise, too, to look for references that can demonstrate the full range of services BSCs provide, because those references will speak both to prospective clients who are looking for a full-service company and clients who need specialized services that may be among those provided.
How many references are enough? The answer varies in terms of actual numbers, but the consensus in the industry is that a company should have as many references as it needs. Business author R. Dodge Woodson suggests that if asked to provide three references, owners should provide more.
“I would prefer to have a minimum of five references,” he says. “If you have three, that’s what everybody else has. I call it ‘mothers, brothers and cousins,’ because everybody has one of each. Five is a little different.”
BSCs will want their list to demonstrate some variety, because each potential client should be approached as a unique situation. A reference from a condominium complex, for instance, won’t seem as relevant or interesting to the manager of a retail store. Experts say that attention to this principle of reference-list management can make sales calls more effective and job bids more successful.
“We keep our lists by category,” says Browning. “If we’re cleaning a supermarket, we list them as a supermarket.” And when his company is bidding on a supermarket contract, those are the references he lists. Browning generally provides three or four references for each category of business his company pursues.
Another aspect of list management is related to updating and maintaining the quality of the customer reference list.
“There is a lot of turnover of building managers,” says Sullivan. “You don’t want to keep the same list of references for years and then find out the company you’ve been using doesn’t even have the same building manager.” Regular communication with customers, especially customers you’re using as references, help BSCs avoid this situation, he says.
Communication, in fact, is the key to compiling and refining a high-quality list of customer references. BSCs should ask references about the strengths of their company. This will spark new ideas for positioning their company in its market and result in a customer reference list that helps the business be more competitive.
Mary Erpenbach is a freelancer based in Rockford, Ill. She is a frequent contributor to Contracting Profits.
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