Creating a New Cooperative: Preferred Partnerships

Every remodeling contractor has a group of preferred subcontractors they work with. These are the trade contractors that you call on when you need specific trade skills: HVAC; roofing; drywall; electrical; and plumbing.

These trade contractors are clear about your expectations, and know what’s expected when they arrive at your jobsite. You have actually created a working partnership with these subcontractors as they have become your preferred service providers. This is a team of skilled professionals and, just as a general physician can recommend specialists for different medical issues, you have a team of trade specialists who respond to the various demands of home remodeling.

You can expand the reach of these partnerships. In most cases, it has taken you a good deal of time to find these preferred trade contractors and to make sure they not only complete your work in a timely fashion, but they return promptly if there are warranty issues. These service providers are an extension of your business, so finding true professionals is part of any successful remodeling company.

Let’s go one step further. The homeowners you work with have these same concerns. After your remodeling project is over and you have moved on to the next job, the clients you worked for in the past will continue to have things they need help with regarding their home. I don’t know any homeowner who looks forward to hiring the people they need for the basic repair, maintenance, and upkeep that are part of homeownership. They don’t know who is good and who will provide the quality service they want. In many cases, homeowners don’t do some of this basic service work because they don’t know who to call.

You have the answer for this. You already have a proven group of trade contractors and suppliers, and you have vetted this group from past experience. You have a unique opportunity to create strategic partnerships with these trade contractors and suppliers by offering them access to your past clients.

How you do this is the key point. Homeowners use Angie’s List to find recommended contractors for work they want done and they pay for this privilege.

Can you do the same thing? Do you have excellent trade contractors or suppliers you have no hesitation referring to clients?

In many cases, your past customers may already be familiar with some of these people as they worked on a project you did with them earlier. I want you to think about creating a professional referral group. This is a “win-win” proposal. The service provider gets access to potential new customers, and the homeowner gets referred to service providers who are good at what they do. And you get the credit.

There are limitations. Some contractors will argue they don’t want to share these service providers. My sense is you may be referring this work out now and not being paid for it.

Let’s see if we can monetize these referrals, but I don’t mean charging a fee. What I mean is this—just as you have a list of good past clients that you can offer this service, your best trade contractors and suppliers also have a list of good past clients. If you decide to work together in this professional referral group, make sure each partner understands it is a reciprocal relationship. Just as you can refer them to your good clients, they agree to refer your company and services to their past clients. Monetize these relationships.

As you develop this referral group, create a marketing letter each partner can send to their respective client list. Promote your professional referral group. Let homeowners know you have assembled a group of excellent service providers who can respond to most of their home service needs. Let them know they don’t have to worry about finding and hiring the right company. You have already done the vetting process for them.

There is a HVAC filter company in Boise, Idaho, that is doing just this. They are an established company with a large database of past customers.

They provide filters of all types to their homeowner clients and proactively send the required filters to homes on a replacement schedule. In addition, knowing their clients have numerous home service and repair needs, they have assembled a professional referral group to assist customers with these various needs. You may not run a filter company, but you can create similar results:

• A formal process to engage past clients
• A relationship-driven referral model

You have an opportunity to formalize key relationships with your trade contractors and suppliers. Reach out to past clients and ask them if they would like access to your professional referral group. Reach out to past clients and ask them where they need assistance. We are part of a relationship-driven business model, so optimize these relationships. There is business waiting for you. PR
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David Lupberger has been in the remodeling industry for more than 20 years and is author of “Managing the Emotional Homeowner,” “The Remodelers Turnkey Program,” and “The Home Asset Management Plan.” He can be reached at [email protected] or 303.442.3702.