How to Take Control of Your Incoming Leads and Revenue |
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Over the last several months, we’ve covered The 4 Steps in Preparing Your Company to Sell. In response to these newsletters, many business owners have reached out seeking practical advice on diversifying revenue to continue sustainable growth and optimally position their company for future acquisition. More Floods, part of our HighGround family of brands, are the industry’s experts at helping restoration businesses grow and dominate their markets. This month, we asked their team to address this crucial topic. |
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Commentary from More Floods |
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Building a business with multiple reliable revenue streams is challenging. In the restoration industry, it’s even more difficult given the number of potential referral channels and the varied strategies required to work effectively with each one.
Each referral channel comes with unique implications regarding the amount of control your business has over pricing, terms, and ultimately, profit margins. All too often, we see companies get stuck relying too heavily on one referral source.
The good news is you can regain control, diversify your revenue, and strategically limit dependency on any one referral channel with a few simple (though not necessarily easy) actions.
Taking the time to document and standardize your systems can yield significant benefits. It will enhance your company’s operational efficiency and help you present a polished, professional image to potential acquisition partners.
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Why is it important to have different referral channels?
| Diversification is Key
Think of it like your investment portfolio. You want to avoid putting all your eggs in one basket, or you open yourself up to greater risk. Heavy reliance on one source of referrals is no different than exclusively investing in one area. Companies receiving referrals from plumbers, agents, or property managers should diversify the number of referral partners they work with. As an example, for a company that markets to plumbers, It’s generally better to have dozens of plumbing referral partners, none of which account for more than 25% of lead volume (and no more than 50% from your top 3 partners), than to only have 3-5 referral partners that are all large accounts.
| Resilience to Market Changes
Like many other industries, the restoration space is constantly advancing and evolving, creating new opportunities (and challenges) regularly. Being able to effectively market to multiple referral channels ensures your company can adapt to any shifts in the market and quickly capitalize on opportunities that arise.
| Building a Robust Reputation
Diverse referral sources contribute to building your reputation within your geographic market. Positive word of mouth from satisfied customers, endorsements from referral partners, and a strong digital presence collectively enhance the company’s credibility and attract more leads. One way to think about this is “increasing your luck surface area.” The more your company is out in the market doing great work, making connections, and helping people, the more likely you are to get “lucky” and win important jobs through connections with the right partners.
It’s also worth mentioning the power of digital marketing. Not only is it a way to grow your reputation, but it can also be a meaningful source of high-quality leads. Many owners have found that their digital leads end up converting to higher ticket jobs. Since optimizing your digital presence can feel intimidating and hard to prioritize, we’ve developed ways to develop digital into a significant new revenue source for businesses, allowing them to focus on building the other direct referral sources that they know best. |
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Steps to Increase Revenue Streams
1. Hire a Designated Marketing Rep
94% of restoration contractors say referrals are their #1 source of leads (Cleanfax Benchmarking Survey Report, 2023). Since referrals are such an integral part of the restoration industry, start fostering referral relationships by hiring someone who is a master at the art of relationship building. Note: many people get this wrong by hiring a closer. This person’s job is not to sell, it is to network and build trust with referring parties.
One of the best ways we’ve found to find the right fit for the position is to use behavioral assessments. These assessments can prevent the excruciating pain of hiring and training someone who ends up not being a good fit for the position or company culture.
2. Target Key Referral Sources
Plumbers and agents can be valuable partners, but they’re just the beginning. We put together a more inclusive list of potential referring parties that can play an important role in diversifying your revenue. Check out this video series on the top lead sources for water damage work.
3. Set Up a Referral Program
Once you’ve established connections, create a program that encourages referring parties to partner with you and send you jobs.
4. Train Your Marketing Rep
Enhance your rep’s skills for building and maintaining referral relationships. Continually investing in and training marketing reps is key to maximizing their efficiency and long-term success. To supplement our recommended weekly marketing and sales training internal to each company, More Floods offers a 4-month program specifically designed to help marketing reps generate more referrals.
5. Sustainable Referral Base
Your company becomes its own source of leads, cutting out administrative costs and giving you more flexibility.
6. You Regain Control
Ultimately, by reducing reliance on any one referral source, you'll increase control over your job average and profit margins, leading to a more sustainable and profitable business model. The proof of this approach is in success stories like this one.
Adding new sources of revenue to your business requires a strategic shift, but the rewards are well worth the effort. Start implementing these steps today to take charge of your business's future.
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Hopefully, this guest edition newsletter from the More Floods team was helpful. If you have any questions or suggestions for future topics, please respond to this email and let us know.
In the coming months, we’ll cover the different ways deals can be structured, what happens after a deal closes, a typical sale timeline, and other topics that aren’t commonly discussed. All with the goal of educating restoration business owners to make the right decision for their company, their employees, and their families. |
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Together, we turn Chaos into Calm. |
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Griffin Brand, VP of Corporate Development |
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P.S. We recently recorded an interview with Greg Petropoulos, founder of Power Dry in Kansas City and co-founder of More Floods. Click here to listen to this incredible story and valuable advice from one of the original thought leaders in restoration marketing and operations. |
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| What we look for...
+ Residential water mitigation focus
+ Independently owned
+ Strong leadership team
+ Growing, scalable business with a great local reputation
+ EBITDA $1.25M+
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About More Floods
More Floods is a collaborative membership program for organizations dedicated to excellence in restoration. We specialize in helping our members grow their water damage business to new heights through specialized training, one-on-one coaching, marketing, and operational systems. Our program is built on best practices from top-performing restoration companies across the industry as well as lessons learned from building our own multi-million dollar restoration company. More Floods acts as your company’s strategic advisor to help you boost profits and dominate your market without franchising, TPA programs, or expensive leads to buy.
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All previous editions of the newsletter can be accessed here. |
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HighGround 3701 W Royal Ln. Irving, TX, Texas 75063 |
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