Referrals are not a strategy. It's a reward for doing a good job. Hey, welcome back to the show. On this episode, we're going to be talking about why referrals are drying up and what you can do to fix that problem. So listen, I love referrals. Referrals are great. They're still the number one type of lead that we can receive, right? Almost, there's almost no selling required. There's no haggle on price. Like whenever we get a referral, it's almost a slam dunk. And so, yeah, we want referrals. 100% we want referrals. We should still be seeking referrals, okay? But here's the problem with referrals. Referrals are not a strategy. It's a reward for doing a good job. Now, think back when you were a kid and you got, you know, all A's on your report card and your parents are like, hey, we're going to take you out to get ice cream because you got all A's. That's a reward. This is the same thing with referrals. You could do an amazing job for a client, you know, beautiful, whatever it is you do, it's beautiful, great service. If the client is just not inclined to want to give you a referral, guess what? You're not going to get a referral from that client. You're 100% putting the lifeline of your business into a stranger's hand and hoping that they are going to give you a referral. I've had clients that were kind of difficult to deal with and the job wasn't that great. It was pretty straightforward. Like, you know, a monkey could do the work. Like it wasn't difficult. And that client went on and gave us lots of referrals. You're like, oh, you know, because, oh, Jane gave us, you know, gave us your name, said you did a great job. Like, wow, I didn't see that coming. I would have never expected Jane to give me a referral. And then I've had jobs where. I'm like this, you know, the clients are going to, their minds are going to be blown. They're going to love us. We're going to get tons of referrals out of this person. And then crickets, not a single referral comes from that person. And that's, that's the problem with relying on a referral strategy. Now, yes, there are ways that you can help. cultivate more referrals from people. It's not a strategy though. I can't go out and get 10 referrals today if I need 10 leads. I can't do that. I can call people and ask them. I can bug them and maybe I can get some referrals, but it's a push, right? I'm not pulling them into my world. I'm pushing against my clients, hoping that they're giving me a referral. In other words, I'm not attracting that type of lead into my life. I'm making it happen through force. And that's just not a great way to have to rely on to get referrals. And so what happens, a lot of guys, I see this mostly with contractors that have been in business for like 15,20,25 years. They're calling me and be like, hey, Brad, I don't understand. I've been in business 20 years. All of a sudden, we're not getting any leads. I've been getting leads through referrals for 20 years. I've never done marketing, but now I'm not getting leads. And it's obvious once you understand why this is happening. So let me just unpack this real quick and why this is happening to people. Here's the thing. The modern homeowner, which is going to be younger people. So now we're talking about, you know, potentially 20 year olds,30 year olds for sure,40 year olds,50 year olds. These are younger generations than some of the people that have been in business for 20 years. Like if you're in your 50s and you're selling jobs to. People in their 30s, there's two generations of trends and buying habits and all that stuff that's changed. When you were in your 20s or 30s and had your business and you were selling the 20 and 30 year olds, you were on the same language. Like you spoke the same language. It was easy to connect. But now that you're older and you're selling to younger crowds, you're not fully understanding where the disconnect is. So the modern homeowner. now shops online. That never happened before. When you were younger, people didn't shop online. I remember when I was like, I don't know about this Amazon stuff. I don't know if I trust it. And I wasn't like a long time holdout. I kind of jumped on the bandwagon, I would say earlier than most people did. But I certainly wasn't the first people that did it. I wasn't the early adopters by no means. But I've always been an early adopter in most things. And that's, that's served me well. But here's the thing. The modern homeowner shops online. They compare providers. They read reviews. They research personalities and they consume content. That's how they learn. Okay. So here's the thing. Like why here's five reasons why referrals have slowed down for most people. People don't talk like they used to. Think about this. If you're older, if you're in your 40s or older, when you were younger, you would go and you would do things in person. Social media wasn't around. You didn't spend hours a day or hours a week on social media or online. You were doing things in person, right? So we don't have the neighborhood grill outs anymore. That used to be a weekly thing when we were younger. People would have weekly grill outs and you would get around and talk and have conversations. That doesn't happen anymore. People don't chat at kids' baseball games. Like parents aren't really chatting with each other. They're on their phones in between pitches, right? They're not actually having conversation with the other people on the field. You know, I mean, and the other parents. And half of the communication that we do now is digital. It's email, it's text. We're not having good old-fashioned conversations. And in those conversations, lots of different topics come up. Right. If I run into you at the gas station and I've known you for a long time, we have a conversation. We might have a 10,15 minute conversation and we're talking about all kinds of stuff. What are you up to now? How's the kids? How's the wife? You know, how's this and this and this and this? And, you know, in a conversation they go, yeah, we just got done remodeling our bathroom. Oh, that's it's crazy. It's funny. We were just looking for somebody to remodel our bathroom. Who did you hire? And you have this conversation. If I'm texting someone, that same person, and I have a question, Hey, John, I just had a quick question. You know, where did you buy that thing? This, this or whatever. And then he answers the question and that's it. There's no additional dialogue that happens. It's just a one, you know, like a one way I ask a question, he answers it. That's the end of it. There's no conversation that happens. So the opportunity for things like that, that could come up don't happen anymore. Right. So now, and I don't know if I don't follow him on social and he didn't post on social media that he's having a bathroom remodel. I have no idea to ask him. who they used for a bathroom remodel. Now, I could post it on social media. Hey, I'm looking for a contractor. You know, who do you guys recommend? If John doesn't see that post, he's not going to respond. If by happenstance, he does see the post, he might say, oh, I use this company. So now it's all happenstance. It's all like luck, if you will, that you're going to get the information you're looking for. So the conversations are gone. The old, good old fashioned conversations are mostly gone. Also, Number two, homeowners forget you. I know this is going to take a hit on your ego, but the reality of it is it doesn't matter how amazing of a job you did, six months, a year, two years later, they've completely forgot who you are. They don't remember the name of your business. They don't remember your name personally. That's just a reality because there's so much information now that we consume. Our brain runs out of storage, essentially. I joke that like, this is a joke, but I say, yeah, I've learned so much information. Now I have to like rewrite things. Every time I learn something new, I have to rewrite something old because I've run out of storage. Right. Because I know so much. Again, it's a joke. But there's some truth in that. Like we've consumed so much information. There's no possible way we can remember everything. And so I don't remember the name of the company, you know, who did this or who, you know, who services our lawn care or cuts the grass or whatever. I don't even remember half the time. I have to like go and think about it or go look at a bill or something. That's just reality. I know you think you're amazing and everybody loves you. People, the reality of it is they forget about you. And so if you're not doing a top of mind marketing after the fact, they're going to forget who you are. They can't even refer you. Okay. Number three in the construction, it's competitive, right? So customers have endless options. They can search Google, Nextdoor, Facebook, TikTok influencers, Yelp. They have endless options of where they can look for information. Again, before social media, you had to rely on either the phone book or somebody that you knew that did work, had work done. So referrals were super important. 20 years ago, referrals were very, very important. Today, referrals are not a viable. strategy for getting leads for your business. And if you rely 100% on that and you don't do any marketing, you're going to get left behind, guys. Guaranteed, you're going to get left behind. Number four, four reason. The fourth reason, homeowners are distrustful, right? They've heard all the contractor horror stories. They know that people are... shady. I mean, even yesterday, just yesterday on TikTok, I saw a guy that was, he was duetting a video about another contractor marking up materials. And then he responds like, this is exactly why people don't trust contractors because they're all trying to mark up money and blah, blah, blah, blah, blah. First of all, his opinion is wrong. Okay. Like the guy, the guy that was recording the video, he's a hundred percent wrong. But the truth of it is, is that people homeowners will watch that video. And then be like, yeah, that's right. Contractors are trying to screw everyone. You and I know that most contractors are the ones getting screwed. We know that. The homeowners are the ones thinking they're getting screwed. So there's a ton of distrust in the industry. And if you have nothing on the internet that gives a taste of who you are and why they should trust you, you have a huge hurdle to overcome. If contractor A has 500 pieces of content and lead magnets and blog posts and all of this education content about construction and all this, he is the expert. He is seen as the expert. And then there's you who does great work, but you have zero content online. So essentially you don't exist online. Who do you think gets the eyeballs? I tell you right now, it's not you. It's the guy doing the education content. Okay. It's just a requirement. I mean, even in my group, there's guys that are like constantly like, no, I don't want to record video. I don't want to be on video. I hate that stuff. It's stupid. I don't want to do it. I'm like, I hear you. I get it. You still have to do it. Either you want to win or you don't. And if you want to win, you're going to do what's required of you in order to do that. And that's just how it is. As the marketplace shifts, you have to shift with it or you will be left behind. Okay. And number five reason is because you don't stay top of mind. This is the same as they forget you, but you're not doing any marketing after the fact to stay top of mind. You're not sending out, you know, holiday cards or emails or newsletter or, you know, a gift card on their birthday or whatever it is. You're not doing anything. So you don't stay top of mind for them to want to refer you, you know, to somebody else. But the main thing here is like when I saw this, it just like clicked in my head. Referrals are a reward. If you do a good job, you get a referral. But the thing about that is it's 100% subjective. You could do a good job, but if the client doesn't think you did a good job, or you didn't do a good job in the way that they wanted you to do a good job, they're not going to refer you. And it absolutely blows my mind that people want to put all of their lifeline, not just their business, their family, they're trusting the livelihood of their kids. You're trusting the livelihood of your kids to a complete stranger to recommend you. And you think that's a viable strategy to grow and scale your business. Now, I always get pushback on this. I always get the contractor. Oh, I've been in business for 100 years, and I've never advertised one time. I don't make any videos. I don't do anything. People just call me because they know I do good work. That's going to end eventually. It will end, but good for you because you were established over a period of time. If that same person started a business today, they would go out of business. Because they're basically in legacy mode where they've got enough referral, you know, enough clients over the years that they can get enough referrals. And that's usually only the case for type of contractors that are doing small quantity of jobs. Now talking about size of jobs, I mean small quantity. If you only do four jobs a year, you know, you do like four big remodels a year, you obviously don't need that many leads. If you're trying to scale your business, you know, to whatever,10,15,20 million, and you need to do 50 jobs a year, referrals are not going to get you there. It's not, it's no way. It's not a strategy. It's not going to work. I promise you. You have to be able to turn leads on and off. And that's where the disconnect is between those guys are like, I've never, you know, advertised a day in my life. That's because you're not living in that world of trying to scale your business. And there's always going to be exceptions. You have some weird. trade and you're the only person, you know, in three state area that does that and it's in high demand, of course, you know, you're going to have tons of business, but that's not the same as the guy who's starting a remodeling business or a deck builder or landscaper. And there's 20 other people that do the same thing. It's just, it's not the same. You can't compare those. That's the people that always want to argue with me that they don't have to advertise. I have lots of clients that have been in business for 20,25,30 years and they, their leads are drying up. That's why they reached out. And that's the reason why. So here's the ugly truth about referrals. Referrals dry up whenever you don't educate your clients, when you don't follow up with your clients, when you don't create content, when you don't ask for reviews, and when you don't automate communication, right? You basically are invisible. Some of you don't even have vehicle raps or any kind of lettering on your vehicles. You're invisible. You're completely invisible. You have to go out there and like a loud stereo, blare into the world who you are. And I understand for some people, it seems kind of egotistical and it's just not you because you're more of an introvert and you don't like being seen and you kind of want to be under the radar and just do good work. And unfortunately in business, it doesn't work like that, guys. It just doesn't. You have to get out of your comfort zone. You have to market your business. It's not an option. It's a mandate. It truly is a mandate. Okay, let's keep going. When we rely on referrals as a strategy, here's what we're actually doing. We're actually gambling. I mean, that's really what we're doing. We're gambling our entire lives that someone's going to refer us. Okay, you might get three this month. You might get two, you know, the next month, and then you might get zero referrals for two months. Like there's no way to scale that. There's no way. You can't. That's the roller coaster ride. I see us all the time in the Facebook groups. Hey guys, has your guys' leads slowed down? It's been really slow here the last three weeks. We haven't got a single call in three weeks. That person is doing zero marketing. Guarantee it. They're relying on referrals. And again, it's not a strategy. It's like a leftover thought. Too many of you think if I build it, they will come. If I'm a great craftsman, they will come. No, they're not. They're not. It's not going to happen for you. You see this every day with restaurants. A restaurant, a brand new restaurant opens and six months later, it's out of business. Why? Because they did zero marketing. They thought as long as they had the location open, then the word of mouth would tell everyone, hey, you got to go try out this new barbecue place. It's amazing. It doesn't happen like that. And then they go out of business because they had zero marketing strategy. In restaurants, kind of the, if you want to call it the pinnacle of marketing or business plan rather, when you open a restaurant is that you should have a two-year marketing strategy and budget. You should have the first two years of your marketing planned out and have the money allocated for that. And the reality is a lot of mom and pops open up and they don't have any marketing budget. They put all of their money into the infrastructure in the building and they put zero into marketing and they think that's going to work. It doesn't. They go out of business. It's the same in your business. You have to have a marketing strategy. Referrals are not it. What happens when you only rely on referrals? Here's what happens when you only rely on referrals. Hey, just a