When I hear, “All my business comes from referrals,” it sends up a red flag.

There is no argument to the fact that a referral from an existing client is about the best advertising you can get. The problem is that, when I hear the above statement from someone in the residential cleaning business, it tells me two things:

1. They have a very small customer base; and, 
2. They’re not growing very quickly

Think about it. How often does the topic of house cleaners come up at cocktail parties or around the water cooler at work? How many people scream from the rooftops about how terrific their cleaning service is? How many of your clients actively bird-dog for you in their neighborhoods? Well . . . .?

Oh, yes, I am a great believer in generating business from referrals. I built a very large business on doing just that, without any additional marketing activity. This program was the vehicle that helped produce thousands of sales per month for my organization. But it didn’t happen passively. It was because of a very aggressive referral program which rewarded current customers for actively referring friends, relatives, coworkers and neighbors.

However, when I hear owners – almost always owners who are out there cleaning homes themselves – say, “All my business comes from referrals,” I know those referrals generally come far and few between. Perhaps a neighbor saw the car pull up like clockwork every second Tuesday and noticed one or more people taking cleaning equipment and supplies into the client’s home; then decided to ask the client who was doing the cleaning and how satisfied they are. Or, a coworker was asking around the office if anyone could recommend a good house cleaner. These are what I call “accidental referrals.”

I suppose if a person lives long enough and remained fit enough over the years to continue cleaning homes themselves, they could eventually grow a decent size client base through accidental referrals. As a practical matter, “it ain’t gonna happen.” This may be fine for people content to act as self-employed house cleaners, but certainly not for anyone who wants to build a serious business and achieve critical mass as soon as possible.

Don’t be Passive about Seeking Referrals

If we’re willing to invest in adverting media to attract clients – and $150 to attract a new client is not out of line, does it not stand to reason we can afford to reward our clients for sending new business our way? In fact, it’s pretty safe to say that a referral from an existing client is pretty much presold before you even visit to come up with a price for the referred prospect. But don’t wait for this to happen passively.

Create a formal “Referral Reward Program” and aggressively promote it to existing clients. Put it in writing. Explain that their team still has openings and explain what areas or neighborhoods you can accept new clients in. If they refer someone not in an area that their team serves during any week, tell the client you have other teams equally as good who would be happy to accommodate people your client refers. Then, consider giving your client some “$50 OFF FIRST TIME CLEANING” coupons to hand out on your behalf. Have a “Offer good until…” date on the coupon. Now, you can reward your client for each successful referral in one of two ways:

(a) Offer a $100 cash reward for each new client referred; or,

(b) Offer one or two free cleanings for each new client referred.

Remember, if the average client represents $3,000/year in revenues, this equates to an average of 5% of revenues – a more than reasonable client acquisition fee. To be successful, a paid referral program needs to be lucrative enough to encourage clients to go out of their way to dig up some new business for you. And unlike other forms of conventional media (other than, say, Croupon.com or LivingSocial.com), you don’t pay money up front to generate the new business.

• Note: My suggestion of giving a $50 off discount coupon sounds contradictory to my stated position on using discounts to attract new clients. However, this scenario is a little different. Your client may be more open to solicit new customers on your behalf by offering their friends a special deal they would not otherwise receive.   Just make sure it is significant enough to be considered of value to both your client and to the person to whom they give the certificate.

In the meantime, don’t wait for passive referrals from your clients. For that matter, even an aggressive paid referral program should take place in tandem with neighborhood door hanger campaigns or whatever other form of advertising works for you. That is … if you do want to grow a substantial, successful and profitable residential cleaning business.