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Thursday, February 05, 2009

Recognition and referrals: The renovator's $749,000 success story

Toronto-area renovator Peter Danis at the summer dinner/cocktail party where he turned a $4,800 marketing expense into $749,000 in sales.

Toronto-area renovator Peter Danis has found a magic formula to build repeat and referral business. His business Kara Construction/The SPC Group Inc. turned a dinner and cocktail evening last summer that cost less than $5,000 into almost three quarters of a million dollars in revenue. The story is inspiring because you can replicate it quite easily IF you have a track record of excellent service to your clients.

"You need to under promise and overproduce," Danis says. ""I want to please my customer so when I finish (their project), they have reason to acknowledge an invitation or phone call just to say hello or touch base."

Danis developed a simple Referral Rewards Program. He visits each client after the job is completed with a bottle of wine and a flower bouquet to explain the program.

Clients can receive either a three per cent credit (of the value of the referral) for their next project, or take two percent of the value of the new project in gift certificates to use at any store they want.

"In the end, it truly pays off," he says. "I've had to do it three, four or five times for clients."

Danis took things a step further with some inspiration last summer, when he sent out invitations to 145 of his former clients to invite them to a dinner at the Keg Restaurant. He also invited them to bring friends to a cocktail reception after the dinner.

"I received 85 RSVPs out of 145 invitations confirming they were coming," Danis said. These former clients signed up for $285,000 worth of work. The meals cost him $3,600 (he prearranged the cost with the restaurant).

But things got even more interesting because of the cocktail reception after the dinner. He paid an additional $700 for the drinks, bringing the evening's total cost to $4,800 including tips.

"To my surprise, out of the 32 friends that came in for cocktails, 26 of them signed a total of $464,000 worth of work."

Danis says after reviewing the results, he will schedule another similar event, but is moving the time to October. Summer is inconvenient for many clients -- kids are out of school, families are on vacation, and the like, and he figures that they will appreciate the evening out even more in the fall.

Danis told his story to marketing guru Jon Goldman after we both attended Goldman's presentation at Construct Canada in December. He won a $2,500 marketing package from Goldman.

Can you do the same kind of thing?

Sure. If you have a great reputation, if you are achieving referral and repeat business without prodding, you can systematize the process -- and still retain the human touch. By spending just a little money and time (the planning and co-ordination for the summer event required only a few hours), you can attract and enhance profitable business.

1 comment:

Bobby Darnell said...

Mark,

Excellent! What a wonderful idea and an inspiring story of success.

Thanks for sharing...

Bobby