Customer Referrals and Returns Are the Main Sources of Growth for This Industry


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Most people think that the success of a business lies in how many new customers it gathers over time. However, experienced sales and marketing gurus would tell you that repeat business, and past customers account for more than half of a flourishing business. As we all know, the key to getting repeat business is to provide the ultimate level of customer satisfaction, thus compelling your existing customers to visit you again.

Return customers make up a huge portion of the business revenue for the remodeling industry. Moreover, these customers help you get new business through referrals to their family, friends, acquaintances, co-workers, etc. The stats show that over 74% of remodeling business comes from existing customers and referrals from clients. Apart from contributing a big share of leads, it also holds the highest conversion rate compared to any other method.

Therefore, customer referrals and returns can be considered the bread and butter for construction businesses. This article discusses various reasons why referrals and returns are highly important for growth.

Why Customer Referrals and Returns are Important for the Remodeling Industry

Generally, people tend to look towards several new strategies and methods to generate business, but customer referrals are still the best thing to happen for remodeling businesses. Here are a couple of reasons why this holds.

People Trust Referrals

Suppose you need your kitchen remodeled, and you don’t know how to choose a remodeling service company. Naturally, you would search the internet for remodeling businesses and ask if anyone has recently gotten their home or office remodeled. You will surely get at least two or three referrals upon asking around. You are more likely to trust those referrals than the internet search or any other method.

Similarly, if you run a remodeling business and make your customers happy, they will recommend you to others whenever asked. According to different studies, a person is four times more likely to try something if referred by a friend. Since they trust referrals from their loved ones, they might extend the same trust to you. Most customers tend to rely on referrals because they are afraid of being scammed or losing their money to an incompetent remodeling business.
You Get Increased Marketing Reach

Another reason why customer referrals and returns are the main sources of growth for the remodeling industry is because of the increased marketing reach they provide. For instance, your marketing efforts might be directed to a 5-10 miles radius within your business. Still, a happy and satisfied customer can take your business beyond that, thus making it more likely to generate business and increase your profitability.

Another great thing about customer referrals is that they don’t cost you anything. As long as you provide top-notch services to your customers, they will keep saying and writing good things about you. Moreover, there is no limit to how much business a single customer referral can bring, making it a good catalyst for business growth in the remodeling industry.

Returning Customers Are Willing to Wait and Spend More

Covid led to a boom in the home remodeling business and many companies are booked for weeks. Most people have a habit of not delegating the entire remodeling project to a company or business the first time around. Rather, they would hire the remodeler for one portion or a single room in the house, so they can gauge the professional’s work before moving on. If you also come across such customers who are satisfied with your work, they won’t think twice before choosing you to complete the job.

Moreover, happy customers are also known to add to the remodeling project since it provides the chance to update according to their tastes and offers one of the best returns on investment. For instance, a customer approached you for a kitchen remodel. After seeing your fantastic work, they also decided to let you remodel the basement, even though it wasn’t their plan originally. So, they might be willing to spend more. Plus, you can expect them to refer you to more people after you finish their projects.

Bringing in New Clients Can Be Costlier

As time passes and new technologies are introduced to get new customers, the cost of customer acquisition also becomes higher. Many studies suggest that getting a new customer onboard can be 4 to 5 times costlier than the cost to retain one. Therefore, referrals and returning customers allow you to increase your business without spending too much on it, and you will be spending less while increasing your revenue, which is ideal for any business.

While your business is growing through referrals and returns, you also have the time and resources to devise new marketing methods and reach a wider audience. However, you need to take it upon yourself to continue improving and using new technologies and methods in your business to provide your existing customers with the same level of quality they are used to.

This point concludes our article on how customer referrals and returns are the main sources of growth for the remodeling industry. Remember to gather reviews and referrals from your customers, and you can even set up a referral program to incentivize them. This strategy will help you maximize your profitability and grow your business exponentially.

Margarita Hakobyan
CEO and founder of, an online marketplace of local moving companies and storage facilities. Business women, wife and mother of two with bachelor's degree from the University of Utah with a concentration in International Studies and a Masters Degree also from the University of Utah with a degree in International business.


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