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Submyth IV: Referrals will be patient — how long it took to start the friend’s job will not be a factor.

Submyth V: You can build and sustain a good chain of business on the books from just referrals. (I include word-of-mouth as referrals.)

It is Submyth V, that prompts my position about referral leads — of course referrals are good leads but they are not the best because they aren’t dependable in either numbers or consistency. To have a quality source of leads from which to prospect, a dynamic remodeling company must actively be looking for new leads (we saw your ad and liked it leads, heard about the CAPS program leads, our son plays for the Little League team you sponsor leads, your trucks are clean and the drivers are polite leads) all first-timers with the company. It is this type of lead that enables a company to dependably grow and even diversify.

Why doesn’t it work just as well with referrals? Consider the pebble-ripple effect: Drop a pebble into a quiet pond and the ripples from the splash will radiate out from the source (the original job). There is a lot of exposure close to where the pebble went in, but as time passes, the ripples, although having covered a lot of territory, are not as big or as noticeable. The same things happens with referrals — so I want to make sure I am dropping new pebbles all the time; that way the referral is gravy.

You will have to spend more time than money keeping your potential referral pool active, gifts, newsletters and personal calls. You will spend more money than time generating new leads from which future referrals may be generated.