Stop Hoping for Referrals — Build This $1M Referral System Instead

Every home service business owner I talk to tells me the exact same thing. Most of our business comes from referrals, word of mouth, and repeat business. And they're usually not wrong. Those are the highest quality jobs. The problem is, is that they don't have a system to get more of them. So without a system, these high quality jobs stay unpredictable, random, inconsistent. In my home service business, we turned referrals and repeat business into a multi-million dollar revenue channel for our business by not relying on it but systematizing it. In this video, I'm going to walk you through the 4 systems you need to implement to do the exact same thing. Phase 1 is Partner Pipeline Builder. I was brought into this home service business to focus specifically on this. And this is how we did it. First, if you've ever gone out to a job site and you give someone your business card and they say, "Yeah, I'll refer you for sure," and you never hear from them again, we don't want that, okay? This is why we have this actual system to do it. So the first thing that we do is we build complementary partner lists. So imagine you do roofing, you find gutter cleaning companies, or you do gutter cleaning, you find roofing companies, or pressure washing companies, or landscaping companies, whatever your complementary services are. Some ways that you can find a list like this, you can go to Fiverr, and those platforms can literally pull lists for you. There's list builders on there. You can just Google list builders, and I'm sure you can find people that will build you lists of complimentary services in your local area. Once you have those lists, you need to do a reach out to them. So when I was in this role at a home service business, I would literally drive around to these places and go into their office and say, hey, is the owner here? Hey, is the service manager here? And I would be trying to build a relationship with them to move on to the next step. But from a digital perspective, what we do as a company now is we'll actually send out cold emails on the behalf of businesses And in the subject line, we'll say partnership question mark, and then we'll say, hey, came across your website looking for a good gutter cleaning company to work with. Want to see if we might be able to work together. And ideally, we want them to say, yeah, sure, it sounds good. Why don't you come out and work with us? Or if when I would go into these places, they would say, yeah, sure, you know, how can we work together? And then we introduce our lunch and learn where we would bring lunch or donuts, you know, Tuesday morning for their technicians. And we would educate them on our program and we would activate them, okay? So a lot of people miss this part of the partner pipeline. We mentioned the business cards at the top, right? This is like the starting point. You need to have an actual partner system. What that partner system looks like is, hey, here's how you send us a customer. You can go to our website, dot-com/contractor, and you can fill out this form and it's going to come over to us and it's going to track that you sent us this lead. And if we close the lead, we will send you something in return. This is what I mean by having an actual system so that way there's a lunch and then they can learn. They can learn about your product or offering and they can learn about how to send you customers. Then you want to activate them as a customer. So you want them now to become an affiliate of you or referral partner of yours because you gave them the system. So what we would do is we would print out collateral for them. So we print out pamphlets about our service with their logo on it and our logo on it. and we had a specific website, thewebsite.com/contractor, where they could go and submit their leads to us and put their name in, and it would go into a spreadsheet. We could track it all for them and keep track of these things. You also want to define referral offer. So you want to tell them that if you send me a customer, I will give you $100, or if you send me a customer, I will give you $50, or whatever that looks like. The main reason that you want to make it so simple is because they're going to be excited about making more money on every single job that they do. But then also they need to know that there's some system behind it and not just like, yeah, you know, if we get to it, we might send you something. You need to make it seem like it's like clean. This is our partner system. This is the partner pipeline builder of a system. The next one is you need to track every partner. So I was at the home service business and when I came in, they, they had, you know, probably 100 partners at this point. And I asked the owner, I said, hey, how do you, you know, how do you know like who to reach out to or like who's doing good or who's doing bad? I really don't. So what we did was I built a spreadsheet that looked at month over month, so year over year, like last January, this HVAC contractor was sending us 50 deals and then this January they're sending us 70 deals. So they're up 20 deals. So this one's good. I don't need to really focus on that relationship. But there were some that were sending us like 100 deals and then now they're sending us only 30 deals. And I'm like, what's going on? And something as simple as like, hey, we ran out of flyers to give out or something, or like our number one sales guy left, you know, we need to have another lunch and learn. And that's the part that leads us into phase 2, which is you have to have a partner management engine. So it's enough, you have to build the partner relationship, right? What I just told you. But the next piece is really the hidden secret sauce that I came in and was able to add gas on the fire for this business. So the first thing is you have to assign a partner or owner internally. So like for me, I was brought in as director of business development, we're $2.7 million and I could own this channel and other stuff obviously as well. But for you as the owner of the business, you could also, like, let's say you like building relationships. The owner of our company, he loved building relationships. Like he would do this over and over again. That's what he did in phase 1. When I came into phase 2 was the part of like, how do we get the most juice out of the squeeze for all these partners that we're building out and build a system out of this? So what I would do is I had a monthly partner email touchpoint. So all of the partners that came in, I put them into a monthly newsletter. This is not like your typical residential one. This is more targeted towards partners. So we did duct cleaning. So with the HVAC contractors, we would say, hey, you're going out on your spring inspection, you can make an extra $100. Like in the subject line, we say extra $100 on every spring inspection. So basically every spring inspection that they went on, they could make $100 extra by referring a client to us. And we would send this to them and we're top of mind, right? We'd also do promos like March Madness, for example. They would do their spring inspections in March Madness. So we would say, hey, we're going to double it, you know, this thing from $50 to $100 if you send these over during March or something like that. So you want to have something where you're top of mind. This again kills the Hey, here's my business card. I'll refer you because, you know, you're probably never going to hear from them again. This is why you want to have a monthly partner email or something that's a touchpoint with them. Text is fine too, but something that just stays top of mind with them and educates them on your business and just keeps reminding them, send your referrals here. Here's what we got going on, by the way, blah, blah, blah. You got to stay top of mind for these people. The next thing is the annual reactivation. So once you pull the data like what I just showed you before and it says, hey, this person was at 100 referrals and now they're at 50, Well, maybe we need to go back out and do a lunch and learn with them. Maybe they have new salespeople, maybe they have new ownership, maybe they have new service manager and they don't understand the program. And they're like, why aren't we selling our stuff and not their stuff? All of those things are headaches. So you got to set up what are called lunch and learns, what I talked about before, where you go in and maybe quarterly or annually you come in with donuts, whatever, educate them and just like build a relationship. This is the management engine that you have to have for these partners. And then the next one is you've got to track the year-over-year referral volume. So not just like month to month, but every single year, because you could even go as far as like, hey, you're a gold member, a gold member referral partner of ours, and you get such and such things, you know, priority scheduling. So we had some partners that they were like gold standard ones. So we would actually put blocks in our schedule for them on Tuesdays and Thursdays. We call them fire jobs, which was like, we know that these people are going to have jobs that just pop up and we want to make sure we have a slot in our schedule for them because we care so much about their relationship. So this is the partner, and we would tell them this, like, hey, we care so much about the relationship that we're going to make sure we have slots next day for you, or we're going to have a slot every single day for you. Some of these people, which is pretty crazy, but, um, this is how you get this partner engine going and you get a vested interest on both sides of this. And then, like I mentioned, identify up and down partners. Who's up? Who's down? What do we do to fix it? And go in and attack that and double down where traction exists. So if someone is like, each month 20 referrals, 40 referrals, 80 referrals, go into that partner and say, like, how do we get more? Like, How can we support you more? Do you need more stuff from us? You know, can we help you in any regards? But basically like double, keep doubling down on where the traction is inside the business. All right, so that is more on the referral side. How do we get these warm referrals coming into my business? Okay, I want to say one more thing before I move on to this step. If you're willing to pray to the Google gods to send money to Mark Zuckerberg on Meta and give them money for customers, give them money for leads, Why would you not give them to your local community to get leads from them? Your local people that are boots on the ground. There's no algorithm involved. It's a warm lead that comes in that's probably going to close, and it's a local person in your community that you can actually help with real money opposed to these gigantic, you know, software platforms. That's my 2 cents on the referral system. That system right there, like, that's $1 million, $1.5 million easy that we were pushing in the duct cleaning company. I know that it works. It crushes. Okay, next I want to talk about the repeat business because a lot of times repeat business people miss this one. So phase 3 is called the 2-step revenue email. Okay, elephant in the room is that people send out emails and they think of them as branding. They send out generic emails that maybe ChatGPT wrote, or they just have like an office manager put together something that looks cute and they send it out just to stay top of mind branding. Wrong. Okay, this is not a system, this is just fluff. So the first thing that you want to do is you want to have a monthly theme every single month. So January, February, March, going down the line of what in your business you need to sell. So I gave the HVAC example. You know that spring tune-ups are coming up. You know that fall tune-ups are coming up. You know people have allergies, so they want indoor air quality. You know that they have cold and hot rooms in their house, so you're going to sell ductless systems. You know, whatever those themes are every single month, you need to lay them out. This way, all of your content that you're producing is all cohesive, but more importantly, the email that you're sending out is cohesive to what is relevant to be sold today. You got allergies? You need to get this thing. Okay, then second, you want to pair it with some type of an offer. Now, you don't have to do an offer every single time. Like, some people are like, I don't do offers, it's annoying. I don't want to be annoying to my people. I just want to educate them. That's cool. You can also layer in offers every now and then. And maybe that sounds like, you know, let's say the ductless example. You have a cold room in your house. You should get a ductless unit to keep it warm. You could have an offer that's like, get $500 off a new ductless system, and you could pair them together. That's how this works for the, for the 2-step revenue email. This is taking those emails and making them not random and making them actual revenue pieces to your business. So next, once you have the theme and some type of an offer, you need to have a direct subject line with clear intent. Okay, so let's say it's "Schedule your spring inspection." Clear, direct subject line, clear intent is if you click on this, it's because you're interested in scheduling your spring inspection, or "Get $500 off a new system." If you click on this, it's probably because you're interested in $500 off a new system, okay? You don't want it to be, "What is this? Why am I getting this?" You want it to be very direct and to the point, because if someone clicks on it, you want them to raise their hand that they have clear intent on something in there, okay? Now, I recommend, without getting too complicated on this, just send it out to your full database, your past prospects, your past customers, your referral partners, whoever. Send it out to every single person A lot of times people get into the weeds on this. Okay, well, this person already bought a ductless system, so why would I send them another thing about ductless systems? They just bought this. Or this person, you know, they already scheduled a spring inspection, so why would I do this? You could go down the rabbit hole of trying to segment out your database, and of course, by all means, go for it. But it gets much more complicated when you do that. And on the flip side of this is that it actually reinforces your person's buying. The only caveat I would say is like, Let's say that you just installed a new ductless system and then someone gets something that says $500 off a ductless system. That one you might want to be a little bit, you know, like then they're going to blow you up and be like, hey, can you give me this $500 off? And you got to go back and figure that out. But sending it out to your database is good and just get it out there and don't think twice about it. All right, now this is the part that's the two-step revenue email. This is the part that I think a lot of people miss is that they send out their emails. You could do exactly what I just told you, send out the emails and it's like, okay, cool, yeah. This is good. Then crickets, right? Hopefully they called us. Hopefully they fill out this form. Hopefully fill out a form on our website. You know, how do I know these people came from this newsletter? Like, it's just— that's why it's just branding. Okay, this is how we take this next level. We pull the people that opened the email because since we have clear intent, $500 off this, schedule your spring inspection, we know that they clicked on that and that is a warm list. They've raised their hand as this is something that they are potentially interested in looking at. Okay, pool opens, warm list. Now you want to follow up with them and you want to send a second email. Ideally, you could call them, but it might be a lot of people to call. Send a second email. In the subject line, in your area, and then in the body, hey Phil, we're going to be in your area next week doing an estimate for a new ductless system. I want to see if you want us to stop by and take a look. We currently have a promo going on for $500 off. Yes, no? Something simple like that and send it to all these people in the opens. Now, I will say this, if you're down to call people, calling is probably the best thing to do because you don't want to be weird, right? You don't be like, hey, I saw that you opened our email, you know, you want to get this thing, like, feeling like, whoa, bro, like, you're crazy. You want to call them and you could just say, hey, we actually have a promo going on right now, get $500 off a Douglas system. I saw your home was built in the 1990s. We were out there a while ago. Have you ever thought about this? What a great thing to call someone about. Like, it's just very nice to do. You could also just say like, hey, I saw, you know, we're actually going to be around the corner from you next week. I was just checking on some people that live in that neighborhood to see if we want— if they want us to stop by. We're going to be doing an estimate on X, Y, and Z. Very simple, easygoing, not weird or creepy at all. But follow up, we're in your area. Now what you're doing is turning your interests into estimates. Okay, so we ran this play for an electrical contractor. We did $500 off generators. He only had a list of like 400 people. So we sent this out, we pulled the opens, we sent a second one out, and he had 3 people say, yes, I want an estimate. Now a generator is like $10,000, $20,000. So that's 3 estimates generated just from sending out this one email. And he didn't even call them. We sent one email and I think he didn't even get a good open rate because it was his first one. But like, that's, you know, $30,000 to $60,000 sitting right there. That's real revenue that he would have not had unless he ran this exact system. And if you have more, more people in your database than that, then you can get a lot more juice out of the squeeze for this. So I hope you're getting value out of this. We actually put together these 7 playbooks on how to grow a home service business $250,000 to $1 million in the next 12 months, specifically for $1 million to $10 million home service business. These playbooks crush. One of them is the 2-step revenue email sequence that's in there. The other 6 are very unique to this and direct specific examples of how to grow your home service business. I'll put a link down below if some of that's of value to you. All right, and then the last one, phase 4, is the repeat revenue system. This one is very important, okay? Because what I just mentioned in phase 3 was how do you get the people that already know, like, and trust you to come back into your funnel? And that's great and all, you know, cross-sell them services, but like the repeat revenue system is how do I make sure that these people keep coming back to me without me trying to reach out to them all the time? So the first thing that we did at my home service business was we created a membership. And the membership that we offered, like, like duct cleaning, it was actually a free membership. We enrolled every single person into our Clean Air membership. So if you got duct cleaning with us, you instantly got enrolled into our Clean Air membership. So this was built-in retention. A lot of times in home service, we try to figure out like, okay, well, how am I going to build this membership and charge them, you know, $30 a month or $300 a year? And it's like confusing. And then the customer doesn't necessarily want to buy a membership for this thing. So what we did was we just gave them a free one. We enrolled them automatically. This helped build in automatic retention for us. So what we did was we did pre-scheduled annual touchpoints, okay? So we know that our shoulder season is January, February, and March. So what we would do in January is we would call all of our Clean Air members and we would say, hey, as part of our Clean Air membership program that you're a part of, we are pre-scheduling your service so that way you don't have to try to remember to do this. This is something that you should do every single year for dry vent cleanings, for example. And we're going to be in your area next week. Do you want us to stop by and take care of this, or does another day work better? And we would schedule them in our shoulder season so that way we would get them on the schedule ahead of time. And it was a perk of our membership that they were automatically enrolled in. Okay, so this is a pre-scheduled annual touchpoint. The other big piece for repeat revenue systems is text campaigns. The reason that I kept this separate from emails is because emails is more like farming. Texting is more like hunting. Because texting gets a 95% open rate. You send a text message to someone, they're going to see it. There's no way that they're not going to see it. They might click stop, they might respond stop, but they're definitely going to see it. So what we recommend doing is 1 to 2 times a year sending a text message that's direct, on target shot at your, your database. And this is the repeat revenue system because this brings people back in pretty good. So we do a similar message with we're in your area, the one that I did in email. But what you want to do is you want to say, hey Phil, we're going to be in Dallas next week or in Frederick, whatever city that is. So you want to pull your database based off of city. You say we're going to be in that specific city next week. Do you have any projects that you want us to stop by and take care of? Or do you have any— list out some of the popular services that you have. And if you want to get a little cool with this, you can give them a little promo like, hey, since we're going to be in your area, we don't have to pay for gas. We'll give you $20 off or something. So that we're in your area messaging, you can send that out to your customers. Low-friction offers. Hey, we got $25 off this service. You know, another cool way to do this is like a voucher. Hey Phil, we're going to be in your area next week doing electrical work or electrical project. We have a voucher right now for $25 off, good through the end of March. Do you want us to stick a voucher aside for you? Or do you have any projects that you want to use this on or something like that? So we actually did this with a, a company that is an electrical contractor, and in February they were really slow. They had nothing on the books. So the owner said, hey, what should we do? We said, let's send out a text message to our past customers and prospects in our database. So we put together this exact thing that I told you, the $25 off, sent it out, and they were booked out for 4 weeks during their shoulder season. He literally said, wow, you, you saved us over this shoulder season by doing this exact system. So I know that it works. So stack, repeat, and referral. The biggest part here is you need to make sure that you're stacking repeat business and referral business on top of each other. So that exact text campaign that I just told you, you can do that for your referral partners as well. So instead of just this generic email newsletter, you can do a referral straight shot to them as well, which is like, hey, right now, like shoulder season, hey, right now this week, if you were to do X, Y, and Z, we're doubling up the points that you get, or something along those lines. Direct Shots Repeat Revenue System crushes it. All right, so the goal of this is that it takes it from random— hopefully people come in, hopefully people come back to work with us— and turns it into a predictable system that you can run for your business. So referrals is a partner system. I'm sure you get referrals all the time from random people. This will help turn it into an actual partner system inside of your business. Repeat business— you got to have emails and memberships and things going out. And then reactivation people that might have gotten your emails, might know about you, but they just need to be reactivated, little kick in the butt and say, hey, we're going to be in your area. Do you want us to come out and do this? Like straight shot. That's your text message. Now, all these systems reinforce each other. As I mentioned before, like referrals, you can set up an email for your referrals. You can do a text blast directly to your referrals. They all kind of go hand in hand. So you got to make sure that you have these systems built out and they're all working together. No single channel dependency. I can't stress this enough. If you rely just on Google Ads and you just rely randomly on referrals and word of mouth that come in, we all know that those are the warmest leads. So why not focus on building this system in your business? And then the Google Ads is gravy on top. It sounds crazy. I know when I say it, but it's like, it just makes sense, right? The whole goal is this predictable pipeline creation, taking things that happen at random and turning them into a predictable process inside of your business. If this sounds like a lot of things to set up for your business, It is. I mean, you're busy running around owning a business, trying to grow it. This is exactly why I built my business. That home service business was $2.7 million. We took it to $5 million and sold it to private equity. And now I help home service businesses implement playbooks just like this to help them grow their business. Last year, our average client grew 27%, $250,000 to $1 million in revenue by implementing these playbooks, working with a team that actually cares about revenue growth, not just vanity metrics. If you want a marketing company like that, I'll put a link down below. We'd love to discuss your business.