Taking Care of Trade Partners - ResidentialSystems.com
How do you treat the people who treat your business well?

The lifeblood of our business is referrals from architects, designers, and, in some cases, contractors. We also do quite well with client referrals, but I would say 80 percent of our business comes from partners and 20 percent from happy clients. Something I struggled with when I first started The Source was how to compensate trade partners. Cutting them a check seemed seedy and a little sleezy. And they felt the same way, too – almost every single architect or designer declined the offer with a kind of sideways glance. I quickly stopped making those offers.

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Shortly after that I came up with the solution that I am still using to this day. Whenever a referral partner needs any work done for their personal homes or their office, we do it at cost. And I mean AT COST. They pay what I pay for parts, labor, etc. In fact, I’m sure I’ve lost money of most of this work, but the good will it generates is amazing. Not only that, but then our partners experience the great work we do and the benefits of a robust network, home automation, and universal remotes. They then talk about their experience with their clients, increasing the average ticket for projects.

I bring this up, because a good friend of mine just had new shades put into his home. He does not sell or install shades, he just integrates them. When a client needs window treatments, he refers them to a shading professional he knows. He has only been integrating shades for a few months, and they have now done two jobs together, with a third on the way.

The shading pro is only person he has recommended so far. No money exchanges hands unless it is for work performed, like running the low-voltage wiring for the shades. He was fortunate to get free motors from one of the shading companies he recommends frequently, and he asked his shading partner to add shade tubes and fabric to the motors, and then come install the shades. He was never provided a quote or a price of any kind. He figured for the four windows it would be something under $1000 for shade tubes, fabric and labor. He was more than a little surprised to get a bill for $2800 with a $300 discount (so a final cost of $2500). And I agree with him.

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For the amount of work they have already done together and the future potential, I can not believe the small discount and the amount he was charged. He called his partner and was told that he was charged at cost. There were two installers there for two hours and the bill was for $700 in labor, assuming the entire discount was applied to labor, meaning each installer makes $175 an hour. If that’s the case, I want to be a shade installer!

Maybe I am being naïve and should not be so generous with our partners, but I believe it is the right thing to do. It comes back in spades. I would love to hear from all of you what you do to show your gratitude to referral partners. Do you cut a check? Provide free or discounted work? Send flowers or wine? Just say ‘thank you’?

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