People like to benefit from the experiences of others – it makes us more confident and reduces stress over a decision. So implementing a structured referral reward system makes sense for the custom AV industry.

Word of mouth is the best testament that you are doing a good job.

This being the case, people would assume that most dealers are super aggressive; they are great at referral generating, processing and following-up on past customers by directly asking them to recommend their company.

But they are not. I don’t mean this as an accusation – it’s a fact that almost every dealer I’ve meet readily admits to this. They are too busy to formalise their referral process.

Sure, you’re happy to talk to a potential client who was referred by a happy customer, but that is only a small part of a true referral program. It’s like depending on the sign on your building to be the extent of your advertising and marketing effort.

If you really want to improve your profit from referrals you need to be as serious and organised in this effort as you are about sales, design and installations.

We want referrals to be more than just a happy coincidence. Waiting for your client to be hanging out at the country club on the precise day his best friend is contemplating a new home theatre is leaving far too much to chance.

The first and possibly most powerful referral opportunity presents itself as you are about to hand over the keys to the system after a powerful demonstration of the system’s capabilities.

However, referrals don’t need to come solely from current customers. A referral can come from anyone who knows you or your business.

My best piece of advice is to create a ‘canned’ pitch that explains what you do in language anyone can understand.

Focus on benefits rather than technology. Most people don’t care how it works; they only care about what it does for them.

Make it a short paragraph. The goal is to tease people, not give them all the information they need for making a decision. Once you have written it, edit it, tighten it up and have every employee memorise it.

You may say: “Why do I need my people to be able to present my company and services?” The answer is simple, they know other people.

That’s all you want. People who know people can multiply your sales efforts without costing you anything.

It doesn’t matter if it’s a junior tech, because even that guy goes to the bank, the supermarket and the movie theatre.

From age 15 to 22 I used to turn around in line at every grocery store opportunity and show an AV magazine to a woman and talk about in-wall speakers. I sold hundreds of thousands of dollars of gear by getting excited and asking if they had ever seen in-wall speakers.

Music, home theatre and distributed audio are hot topics and so easy to talk about. All it takes is for you to strike up a conversation with someone in line at any location and mention who you work for. It’s that simple.

Now establish a reward system for anyone who gives you a name that turns into a sale. It doesn’t have to be a huge percentage, just enough to get their attention. Make it simple and easy for them to understand.

Pay them in cash, gear or a company cheque. You will be blown away at the excitement a few hundred dollars will create among the installers, the warehouse team or the office staff.

A past client will almost freak out when your phone and say: “I have a thousand-dollar cheque for you from the referral you gave us.”

Once the system is in place it’s time to share it with people outside your company. Remember, you just want people who know people.

There is a dealer in Florida who, although being in a very depressed economy, doubled his business in 2007 and is on track to do so again this year.

He attributes this success to having a referral system, and his number one referral generator is his mailman. It’s like I said – people who know people.

Anyone you deal with on a regular basis who interfaces with people can generate business for you. Establish a defined, documented and executable referral process and create a flyer or brochure that outlines the pitch and the incentive.

Give it to anyone who shows the slightest interest. It makes no difference how many people take up your offer – it costs you nothing until the referrals turn into clients.

Soon you will have more business than you can handle. It’s the sort of problem every business looks forward to.

So get your pitch down, follow up on referrals immediately and watch your business grow beyond what you imagined.