S2Ep117: Building a Thriving Business: The Benefits of Customer Referrals

In today’s episode, Allan welcomes Bill Utnage. Bill is a seasoned entrepreneur, coach, speaker, and author. He has over three decades of experience owning and running service-based businesses in healthcare and real estate. Allan and Bill discuss the power of referrals and why they are the best kind of leads for your business. Clients prefer to do business with people they like, know and trust. Clients are more likely to return to someone they trust and have a good relationship with, making it a more sustainable and profitable business relationship.

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Allan has started and grown several multimillion dollar businesses. His mission is to help you do the same. Welcome to The Business Growth Pod, building the future, one entrepreneur at a time.

Hey, everyone, Welcome to the Business Growth pod. I’m your host, Allan Draper. Thanks so much for spending some time with me today. I know you’re all busy building your businesses, and scaling your companies and doing amazing things. So I want to thank you, I know how busy I am. And I appreciate you tuning in, make sure to check out my website, Allan draper.com, schedule a 15 minute consultation with me. They’re always looking for passive investment roles. So I like when people pitch me their ideas. Sometimes I’m able to help with a little bit of advice or encouragement and views situations, I’m able to invest and help you scale your companies directly. So make sure to go to my website, www.Allandraper.com

And check that out. I am very excited for our guest. Today we’re going to get into a little bit new subject area, which I’m excited about. Today, I’m welcoming Bill Utnage to the show. Bill is a seasoned entrepreneur, coach, speaker and author. And he actually has over three decades of experience in owning and running service based businesses in health care, and real estate. Welcome to the show, Bill. Glad to have you.

Yeah, absolutely. Um, thank you for having me excited to be here today and giving the opportunity to kind of hoping to just share something that your listeners and viewers can use and  implement in their businesses.

Awesome. Well, tell me a little bit about where you got your start and why you’re an entrepreneur slash business owner,

I early on got involved in just selling some different things. I went into the Air Force in 1985, spent six years between 85 and 91 in the Air Force, and came out of that and had an opportunity to join a good friend of mine in his in his chiropractic business in California. And that’s where I started, I kind of ran the business side of that. And we were kind of building out a chiropractic businesses. And really, we ran those pretty much based upon referral and kind of fast forward. This is way before Obamacare and all of those things. But we started seeing the insurance world changing and ended up selling off the clinics. And we had a consulting business but tied into that as well and went into real estate in 2005, started building a team there and just stepped out of that full time production in about the last 18 months. And so we’re again going on now 32 years of just really running, owning, and now and then coaching others service based providers on how to build that referral based business. So that’s kind of the short story to where I got to today.

So what sector of real estate were you in? I was in residential.

So again, residential, built out a team that still runs without me up in Illinois. I’m in Florida now got out of the cold winters. And so we ran a residential real estate business, you were in

the management side of it, or were you guys investing or what was the for most

of that time I was in production running the listing side of our real estate business. And then we had a team of buyer’s agents, support staff, all of that. And then I was also I’m also a real estate investor as well, my wife and I own investment property. So on that side of it,

awesome. How did the healthcare experience translate into real estate? Talk to me a little bit about what you learned in the healthcare industry or just with business generally, that you were able to use in the real estate world? Yeah,

really, you know, it was interesting because that transformation because what we saw in the chiropractic world is we started seeing our reimbursements being cut, it was you know, have managed care and so we started seeing a constriction there on revenue. And so we felt hey, we’ve seen the kind of the writing on the wall, but you know, for me, having the consulting business, we’d help new doctors, go purchase practice, do some commercial work there as well. And so we sold all that off and decided to step out of that and transition into the real estate. My wife had been in the mortgage world for quite a while so obviously you know, when we bought property so familiar with obviously the real estate side, but really kind of on it, Alan is is that people are people regardless of you know, I find Whether that’s in chiropractic, the patients that we were dealing with, or even you as we go into real estate, or in what you know, in your listeners, whatever that is, is that ultimately, we’re dealing with human behavior of how people react. And so what I really learned out of that chiropractic is, you know, building those relationships, understanding that people want to do business with people they know, like, and trust. And if we build those relationships, that’s where the referrals will come. And it’s one of the most lower cost of acquiring customers that I have been able to find because we do a great job, they’re going to tell their friends and family members, and then that leads to those referrals to be able to build out, you know, that business,

let’s talk about that. I’ve noticed, so I own some home service based companies pest control company, for example. And one thing that I noticed my first few years in the industry, was that, when a customer was referred by another customer, they stayed on board with us, longer than the customer that referred them. So the customer that was referred are stickier than the customer that does the they’re both great customers. And we’ve noticed that it is the best type of lead. And we have all sorts of leads, we have everything from brand leads, like billboards to we have direct sells door to door, we have lots of digital marketing and SEO. But the very best kind of lead as a referral. We’re always wanting more. So let’s talk about that. You mentioned that people want to do business with people they know trust in like, how do you get into that position? How do you become somebody that another person knows trusts and likes?

Yeah, you know, and the thing about it, I will just say, you know, kind of the first and I’m with you and I’ve done it different ways, I used to be young running a bunch of TV ads, I mean, we do radio, I would do a lot of things and spend a lot of money on this is dating me, but this was pre Facebook, we were running Facebook ads, or being able to do that when that didn’t exist. And so it was TV and radio was our indirect mail. And you’re absolutely right, the most cost productive, the best ones are going to be the ones that are going to be referred to you. The key piece of it is this is where I found is that we have to slow down. And I know for most entrepreneurs, it’s count when you hear that is sometimes you have to slow down to speed up. Okay. And what I mean by that is is that whether it’s pest control, whether it’s chiropractic, whether it doesn’t matter, whatever it is, is that we have to truly bring value to those people and let them know, hey, that we actually care that we listen to you, what are their concerns? What are their challenges? How do we deliver such an experience to them, that one that they’re not going to think about going anywhere else to is that they become an advocate for us? This is something I mean, I wrote a book about it called the profitability roadmap, and we talking about how do we raise our refer ability and our likeability rating with our, with our customers and clients? And we do that, sometimes spending time, but also how are we delivering at such a high value, right proposition. And it’s also about communication, consistency in our communication, reaching out, reaching out them creating, for example, like a customer appreciation program, a VIP program, that was one of the things that we’ve implemented in our real estate business that was a game changer, and offer different things that you know, for people to feel plugged in to give them status, you know, if you would,

did you do that with both on the chiropractic and on the real estate side, where you had kind of these VIP programs,

you’ll we didn’t really that iteration of the VIP really came later. And with the real estate side of that, but in our chiropractic businesses is that, you know, one of the things that we did talk about value add in all of our practices is that we were in this is again, this goes dates back to the early 90s Is that we were putting gyms exercise equipment in all of our clinics. And the reason we were doing that is is that we really believed in preventative care. So if I could get people working out, giving them exercise, their adjustments, everything would hold longer to be able to do that. And we didn’t charge them for that we run put them through a routine. So it was huge. It was a huge value add but what also it allowed us to do is people would come in and work out almost like a gym, and they would be in they’re going to go Oh, hey, I need to get adjusted today. Or, Hey, I got a friend or a family member that can really benefit from this. And so one of those and we started you know, having appreciations around you know, people’s birthday. So little things like that sending them notes and letters and just saying, Hey, we appreciate you so much. And hey, if you refer someone to us say we’re going to take great care of them but also Hey, we’ll give you a discount on the next time that you’re in, you know, on an adjustment. We didn’t call it a VIP program. I don’t think I was that clever back then do that. Give it a real name. We learned that after you know going into the real estate

world. So when you did it with real estate Did you do it in house? Or did you reach out to a third party and bring them in and say, Hey, we’re trying to develop a VIP program? Can you give us some pointers? Can you help us develop this?

I had coaches that kind of shared, like, Hey, this is somewhere that you need to be looking at how do you create, you know, raving fans. And so that was in the iteration, we did it in house. And we put on four client events a year where we would invite our clients for giving an example, in March of every year, we would rent out a bowling alley for two hours, it was free. So we would invite all of our past and current clients to come bring their families, they bowl, we would serve pizza, have drinks, we would have a photographer there taking pictures of them and their family. And it would give us a chance to have a conversation. That one event, Alan, so I look at my ROI on that is that that event cost us probably a couple $1,000. But the ROI on that we were making probably 30 to $40,000 of referrals out of that event that would come within 30 days after that event. And it was most of that would be and we tracked a lot of things was because of having that and myself and my team would be there, we would just be mingling, and just talking with people and not even talking about real estate, it would just be like, Hey, how’s the family? What’s happening in your life and doing that, and it was so amazing, you know, people would reach out to us and go, Hey, Bill, this is the first time that our family has ever bowled together and we have a photographer, they’re taking a picture, and then we send that to them after the event. I mean, it’s, it’s how you kind of bulletproof your business is when you create so much value that people are like, Alright, I’m going nowhere else. And I’m gonna refer my friends and family to these people, because this is how they’re going to be taken care of. That’s a game changer.

I really liked that idea how much of a difference? I mean, you were talking about ROI does it make because obviously, with real estate and commissions, there’s one additional clients a really big deal. And so the potential reward is a lot higher, I think that makes the risk even lower, versus businesses like a pest control company, average contract value, maybe in the five $600 a year that go into, hey, what type of events? Or what type of things can we do to build these relationships and encourage the referrals?

Yeah, and it’s a great point to Alan. And there’s where we have to look at it. So real estate higher ticket, right? So your higher ticket, then, you know, so on an average commission, depending on where you live, right, whether that’s Arizona or Florida, but let’s just say that the average commission is 10 grand, right? So I’ve got some margin in there that I can work with. Here’s what I would say it for the viewers that are watching and listening is if that’s your example of pest control in my lifetime, your client is worth 500 to $1,000, then we just have to understand is like Okay, what if we understand what’s our acquisition cost? I’m already paying to get that client right now. Right? So whatever that is, and I’m sure in your business 100

bucks, how much is that? Depending on the source? It’s probably around 200 bucks make it a round number.

Yep, exactly. So in what I would suggest, in something like that, being able to stay in constant contact, for example, one of the things that we do on a monthly basis is that we send a direct mail piece to our whole database, and basically is, is that it’s sharing something of value to them. And for example, I’m gonna use pest control is, it may be, hey, it’s the rainy season, here are the top 10 things that you need to know about your house and what to do or what not to do, right. I’m just again, you know, in Arizona, it may be you know, how do you keep the scorpions, you know, what are some hacks, I’m just using that for an example. But the part of that is, is that you’re bringing value and and having contact. The other thing of that is, is that, and it seems really simple. But one of the things that we saw is the power of the handwritten note. And I know that sounds like old school for most people listening to this, but think about the last time that you got a handwritten note from someone, and it’s probably been forever. And if it was, it was somebody with might have been a birthday card or something like that. And the thing about it is, is that and this is what I tell like a lot of new entrepreneurs or even people that have been in the business, one of the things that you can do soon as someone does business with you is you appreciate them immediately. Right. And so one of the things is I we do it I do this in all of our businesses is that as soon as someone signs up with us, regardless what it is, whether it’s coaching, whether it’s real estate, we’re sending them a note saying, hey, Alan, thank you, we know that you had a lot of choices to make, and we appreciate that you picked us to be able to work with, we’re going to do the best job we’re going to our our goal is to give you a five star experience throughout this whole thing, right? And so just that little piece of it, that’s one that’s a touch, right? Then it could be, you know, an email of something of value around your business, and then you may not going to be doing big client events. But the consistency throughout the year along the way is hugely important. And I always tell people is it’s a minimum of 36 touches a year.

Yeah, that’s a lot. That’s, you know, and it’s interesting, because when I started my first business, I don’t know why I thought this but I thought everybody cared about my business as much as I did. It’s not the case. Ace, we have to offer them something that makes them want to care. And a long time ago, Gary Vaynerchuk wrote a book called Jab, Jab, Jab, Right Hook. And basically the concept was, hey, you give, give, give, give, give, then you ask for their business. Have you found that to be the case with when you’re requesting referrals? You’re looking for referrals? Like, when is the call to action with the bowling example? Were you on the way out? Were you asking for referrals were you doing?

Tell me a little bit about when you actually asked for the referral. And there’s a nuance I’m Gary in that ask. It’s the same thing as you know, that Zig Ziglar says, If I help enough people get what they want, ultimately, I’ll get what I want. And so with us is that we never asked them at the event. Here’s what happened. Alan is we’re talking to people, there’s no reciprocation, we’ve done this event, we put it on, and then we’re talking what I found, we’ll just bring it up. And they’re like, Hey, Bill, hey, I got my neighbor. They’re thinking about selling their house this spring. And I’m like, Oh, hey, great. Hey, what would be Allan, what would be the best way for us to you know, to connect, if you would mind connecting with me? I’d be happy, right? Like, okay, hey, I’ll send a group text and be able to do that. You see, there’s where the power of that comes from, versus what I never wanted it to feel like, is going around and going, Hey, Allan, hey, thanks for coming today. Hey, by the way, who do you know that thinking about buying, selling or investing in real estate that I can help them with, right? Because then it makes the event feel more like it’s a pitch, right? We got you here. Now we’re gonna pitch you on, you know, sending us business, it would feel

like it’s not a free event anymore, because they’re feeling like, Hey, I’m paying for this through my referrals versus, you know, this idea of reciprocity, which there’s this ASU professor Robert key already, he wrote a book. And in his book, he talks about reciprocity, and how we do even the smallest things, a handwritten thank, you know, or you know, our service company, every once in awhile, we’ll give them $5 off a service. And a lot of times a magnitude doesn’t matter. But you don’t ask for anything at that point. You don’t say anything about that. It’s just a gift. Right? And I think it changes that perspective.

And this is what I love. And I think you talk about his book, I think it’s called Influence, right? I think, right? Yes. Yeah. Great book. And so, and that’s the thing, and you know, so, you know, early on, we’re just like it, it’s okay, you know, like when I was doing my call, so, you know, when I would reach out to our database. And so I’m on the phone reaching out, and the conversation is just like, for me calling and just like, hey, you know, hey, Alan, I was in your neighborhood the other day thought about you, hey, just calling to check in, see, hey, how are things going? Is there anything that you need help with? Because, you know, I’m connected, I have access to service people to all these kinds of things, any projects or anything that you guys are doing around the house? Right? So there’s a different thing, because you may go, oh, man, you know, my wife’s been wanting to hang these new ceiling fans, I don’t want to do it. I’m like, Hey, I got a great handyman. Is it okay? If I connect you with him? Right? So here’s what happens out of that I’m bringing value, I’m gonna connect them, I’m bringing value to you, your wife, and my handyman. And then here’s what’s going to happen with this Allen. And this happens 99.9% of the time, you’re gonna go say, Hey, what’s going on? Hey, what’s going on in the market? What’s going on with real estate, right? It’s just a natural flow of the conversation. I’m like, Hey, thanks for asking. I said, Hey, one of the things I really could, you know, use help on, I’m meeting some sellers in whatever maybe in your neighborhood, like, Hey, we got buyers looking. And we don’t have any inventory. Hey, anybody you know, Alan, that’s thinking about talking about maybe selling their property, because we may have a buyer for it, right? It’s like, ah, you know, what, whatever, right, wherever that goes. And then it’s making that conversation because that’s a much easier conversation. And Alan, you know, people have been in sales very long. It’s the call reluctance people are scared to pick up the phone, is because they don’t know what to say. But if we say it to the people that already know, like, and trust us, it’s an easy conversation. It’s like you and I talking today, though, we don’t know each other. But it’s like, it’s not where I’m salesy, where I’m like, Hey, I’m trying to bring you value. And I’m not big on you know, that other part of it, it can work I used to back in the old days, I could cold call with the best of them. Now, is it fun? Nope. Can you get results from it? Yep. You know, if you’re willing to take enough rejection. This is where the big thing of it is, is that is having a database, you have to have a database of your past and current clients, and also your sphere of influence and anyone that you meet, because by having them in the database or CRM, right, whatever that is, it’s a way for us to build a system to consistently communicate with them, not spam them, we’re gonna get permission. It’s permission based. It’s like, Hey, would it be okay, Alan, from time to time that I share some information with you that I think may be helpful. You know, you’re taking care of your pest control, and it’s your house, and people are going to go, Sure, yeah. Great, wonderful. So then I’ve given them permission. So then I’m touching base with them. I’m sending them things of value, because they’ve given me permission to do that. I’m reaching out to them, especially when they become a client. And then you could have a small VIP thing where it’s like, hey, for every person that you sin to our company that signs up for an annual service, we’re going to discount your service by 10%. Each time you do that, right? Because if it’s $200, to acquire, and you’d say that the average is 500, that you’re making an annual service that becomes $50 versus 200. Right. And that’s what I want our viewers to hear and see is like that acquisition cost. So now I’ve made 150 bucks on getting a new client, plus I got a new client, and it saved me 150

Yep, that’s awesome. You mentioned having the database or CRM, how important are systems to maintaining this contact with people, and I want you to talk to me a little bit about your systems, what are the processes that you have that just kind of are working in the background, so that, you know, it’s not an individual human just doing it all day long

100%, you have to have, if you do anything more than once you have to have a system or process for it, I’m just telling you, because in especially the things that you only maybe do, you know, two times, or three times a year, because then when it comes around again, you’re like, Well, what do we do about that? So I’m huge about creating those. And so with our CRM, so for example, in our real estate business, we create a marketing calendar at the beginning of the year. And so we lay out, we know what our themes are going to be per month of what we’re going to talk about, and our of our messaging from our Facebook posts to what we’re going to be mailing out to our events to all of those things. And so we know what that looks like. So it isn’t like, you know, we’re setting here in March and go, you know, what are we going to do next month, we already know that because by the time you figure it out, you’re already behind it. And here’s what I want to really encourage your viewers and your listeners, Alan on this, when I talk about 36. And I’ll be honest with you, our team on real estate, we connect with our people 42 to 46 times a year, I know people we’re going to hear that they’re going to go, That is insane. But I’m going to tell you think about how often we are bombarded with so much from email, to direct mail, to Facebook, to social media to all of these other things. And we strategically do this in a way that it’s having the database, and then I have person that’s on our team that’s really in charge of kind of the customer experience, right? So we have our marketing calendar. So we don’t have to think about we purchase what we call our items of value, we do a direct mail piece to about 1200 people every month. And then we follow that up with an email, we only send typically ever one email, we do video text,

one email a year, I know, a month, a month, one a month, okay,

so So if you think about the 36, and I’ll just run through it quickly of how that could look. And so, once a month, it’s a direct mail piece. Now that can be as simple as a postcard or whatever the case may be. So there’s 12 a year, we’re going to send an email around something of value. So there’s 24. So right, right now I’ve got 24 touches, just because I’ve got a direct mail piece, and I’ve got an email, we also segment out our database by the value that the customer is to our business, meaning I’m going to use you for example, let’s say Allan, you’re a customer of ours, you’re referring us a couple three deals a year, right, you become what we call an a client, meaning because your value now everyone is valuable, don’t hear me what I’m not saying is that but your value to my business is different than someone that’s going to be one off, it’s only ever going to do one deal with me and be done. Right. So my contact with you is going to be more so there that’s going to be like my eight clients, um, face to face with those clients or voice to voice once a month. Okay, so there’s another 12 so easily, you’re already at 36 from your direct mail piece, your email, and then a phone call. Then I add in, I get your birthday, and I’m going to send you a birthday card, right? Because who sends you birthday cards, people that are close to you. So I’m like, Hey, man, happy birthday. And it’s just something that you know that it’s simple. When we have an event, we’ll do an email to that, to invite you to that there’s a follow up. If you miss the event, you could make it Hey, man, sorry, you couldn’t make the event. Hey, well, people, you know, we’ll see you next time. And so if you notice in all of this, this isn’t spamming of all of like, Hey, do business with us do business with us, this is just staying in constant contact. So we are top of mind with them. Because they may do the direct mail piece and look at it go. And they don’t read it. I’m a realist. It’s not like they’re gonna put it on the refrigerator go, this is the greatest thing ever. They’re gonna just open it and go, Hey, Bill still in the real estate business. That’s, you know what I’m saying? It’s a reaffirmation of what we’re doing.

I honestly think that the difference between spam and not spam is the perceived value of the recipient, right? If the recipients like oh, okay, that was, you know, that was pretty cool. They let me know that it’s gonna be a rainy season or they let me know that, you know, the average, you know, the housing market increased or whatever, right, adding some value, then it’s different for sure.

Yeah. And the other thing is that it can be a call to action. So what I would do like once a year is in different ways at the beginning of the year and just go, Hey, if you’re interested in what your house may be worth now, you know, you hear a lot of things Hey, I’m happy to give it because then again, it’s a call to action to get people moving because they’re like going, Wow, I didn’t think my house was worth that much. Maybe we will move up or whatever the case may be. Right?

Well, as we’re wrapping up here, Bill, tell me a little bit about what you’re doing now. And if people are interested in learning more about how you can help them, where can they reach you?

Yeah, one of the things is, you know, I’ve released my first book in September of last year, it’s called refer ability roadmap. It’s basically literally a guide to how to build a referral based business for people in the service world, right? My primary market is chiropractic real estate, mortgage insurance agents can be pest control, because it’s  a service, you can go to www.referabilityroadmap.com

You can get the book there. I’ve got some  free downloads. I’ve also, I just launched in the last month, a really a private Facebook group that I’m doing, where I’m just just helping people sharing some content to help them basically be able to grow a service based business as well.

Well, thanks for joining us, Bill. And we look forward to speaking with you in the future.

Yeah, absolutely. Alan, thank you so much. All the best to you and all the best to your viewers and your listeners appreciate the opportunity. Absolutely.

If you’ve enjoyed today’s podcast, please leave us a rating and for daily inspiration and business tips. Follow Allan on Instagram. Until next time, remember, we build the future one entrepreneur at a time.

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