The Potential Revenue Generated By Lost Referrals And Repeat Business

The revenue you earn from referrals and repeat business can be significant, especially since these clients represent some of the highest-value opportunities. You definitely want to capitalize on this highly fluid connection.

Let’s break it down:

Average Value of a Job

• Skilled Trades Industries:

• Construction projects can range from $5,000 (small renovations) to $100,000+ (major builds).

• Trades like plumbing, electrical, and HVAC typically average $150-$500 for smaller jobs and $5,000+ for larger projects.

Let’s conservatively estimate $2,000 per project across these industries.

Referral Conversion Rate

• Why Referrals Matter:
  Referrals convert at a much higher rate than cold leads because they come from trusted sources. People who know you or who trust people who do. The Average Referral Conversion Rate is extremely high – 20-50%. Compared to new prospects who are unfamiliar with your service or “cold leads” that convert at a mear 2-5%.

This means:  If your business  loses just 10 referrals per year, that could equal 2-5 missed jobs (assuming 20-50% conversion rate).

Repeat Business

• Why Repeat Business Matters:
  It’s 5-10 times cheaper to retain an existing client than acquire a new one. Happy clients often hire you for additional work (e.g., upgrades, maintenance, or new projects).  A business could realistically expect 1-3 repeat jobs per year per happy client.
  
  

• This Means: If 10 past clients don’t return due to lack of communication, that’s 10-30 lost jobs annually.

Revenue Lost

Combining referrals and repeat business:

• Lost Revenue from Referrals:

• 5 missed jobs x $2,000/job = $10,000 annually

• Lost Revenue from Repeat Business:

• 20 missed jobs x $2,000/job = $40,000 annually

Total Potential Revenue Lost 

$50,000 annually per business from lost referrals and repeat business.

Consistent Communication Prevents Losses: Newsletters and strategic content keep past clients engaged and encourage them to refer others or return for repeat work.

Newsletters are also an affordable solution that carry a big payoff. What I mean is, the small investment into content marketing – ie, getting strategic, seo Blogs written, or having a copywriter handle your newsletters  for a fee –  can recover a large portion of this lost revenue.

If your Newsletter writer cost you $500 per newsletter ( a realistic outlook for a effective writer) and you have 1 newsletter that goes out each month –

You attract over 40,000 in annual revenue with your 6,000 investment.

Consider Pay-per-click Ads, like google and Facebook cost–  You pay for every click, whether or not it leads to a sale… this can lead to huge variation in costs and can impact budgeting. Then, consider ads stop working as soon as you stop paying. 

And they only reach new prospects based on demographics and likelihoods. These target audiences may not even be in the market for your service.

Content like newsletters and blogs have a single upfront cost for creation but no ongoing "per click" charges ( meaning once written they always work for you) the Average Cost is $500 per newsletter or blog, with the potential recyclability. 

Content uses SEO and targets people who are actively searching for your service – who want to pay for your service –but don’t know you exist. It connects these willing prospects with your content ( blog, website, newsletter,etc) and leads them to close with you. 

Content marketing is 3x more effective at getting you work and costs less than half (62%!) of what traditional ads do. 

Is your business missing out on $50,000 or more in lost referrals and repeat clients?

Let’s build a strategy to keep you top-of-mind and maximize your revenue. Schedule a free Discovery call today!"