Save Money By Asking Friends and Family For Referrals

You’ve probably heard the old cliché: ” It’s not what you know, it’s who you know.” This is most often used in association with business and finding jobs but it holds true with many everyday situations as well. Knowing the right people, either directly or through a third party such as friends and family can be your gateway to savings.

When This Applies

When you have a plumbing problem or need that odd job taken care of around the house how do you go about getting it taken care of? You really have two options: do it yourself or hire someone to do it for you. But when you need something done that you aren’t comfortable doing yourself how do you go about finding who to call? The obvious answer is to scan the yellow pages or hop online to find someone in your area, but that can be a crapshoot. An even better idea is to check with someone you know to see if they have worked with anyone and who they might recommend.

How Can Going With a Recommendation Save Money?

So, how on Earth can just asking for a recommendation from a friend save money when you may have just called them from the phone book anyway? Most small businesses or self-employed people rely on word-of-mouth as their primary advertising source. They thrive on positive recommendations and in many cases if they know who referred you to them you could find yourself getting a bit of a deal. What happens then is if you are happy with the service and paid a reasonable price what are you likely to do? Of course, you’ll be touting their name if someone asks you for a referral.

Some Real Examples

Strangely enough this has worked for us twice in the past week. We have been in our house for about 18 months now and we have well water. The well is fairly new and the water is pretty good since we moved in but for some reason we were still getting rust stains in the showers. We do have a water softener and it feels like it is working but we didn’t know where the rust was coming from. My thoughts were that it was coming from the old hot water heater that probably had a lot of iron sediment built up.

Before making any expensive purchases we wanted to have someone come out and test the water so we knew what the real problem was. We could have simply opened the phone book and called any one of the dozens of options but instead I told my wife to ask around at work to see if anyone else in the immediate area has had any similar problems and who they had come out and test the water. Well, she found out that 3 different people in the office all recommended the same person so that was a good sign and the call was placed.

First, once we called him he was thankful and knew the person who referred him. Given our sometimes hectic schedule he was very accommodating and agreed to come to our house well after business hours late in the evening. This was great because neither of us then had to miss any work. So, he ran all of the tests and found that our water softener, although quite old was actually functioning properly. That was good news. He did explain though that our rust stains were coming from bacterial iron, which means iron attached to small organisms that could not be picked up by the softening system, which is somewhat bad news.

Either way, he spent the better part of two hours running dozens of tests and examining our equipment at absolutely no cost which may or may not have happened with another vendor. But on top of that he did show us some additional water softening options if we felt an upgrade was necessary, but said frankly that even a new system would only slightly improve the situation and our real benefit would be from doing a shock chlorination of our well. So, if we decided to get a new water softener he made a deal saying they would find someone to take care of that for us, and on top of that they would buy us a new hot water heater, install it and dispose of the old one as well all at no additional cost. Not a bad deal, but we decided to just start with chlorinating the well first and see what happens.

Part 2

So, that brings us to finding someone to chlorinate our well. Again, there are countless well-drilling companies in the area but my wife asked around at work to see if anyone had this done before and who did it. Sure enough she found a recommendation and they said their water improved a good deal after it was done. So, we call them to set something up and to find out what it would cost. Again, they were excited that someone referred us to them and would come by this evening to take care of it. On top of that he said he would only charge us $75 and the normal price is $150. Look at that, a 50% savings.

Was this really a deal? Yes, as I made a few other calls to see what the going rate was for a well chlorination and every place charged between about $125-$200. So that is good, he wasn’t just giving an inflated price only to pretend we were getting a discount. Of course we could have saved even more money by doing this ourselves, and he even offered to let me call him and he would walk me through it over the phone. But to be honest, I’m not all that comfortable in opening up our well and dumping a bunch of bleach down it so it is worth every penny to have a professional do it properly.

Conclusion

Keep in mind that this won’t always work and generally the larger the company the less likely you’ll find yourself getting a discount, but it can be worth your while to take the time to ask around before making that call from the phone book. Also, they have to know that someone referred them. It won’t do any good if you just call and don’t mention how you found them. So the next time you need something done around the house remember, it can pay to ask friends or family for a referral, you may save a few bucks.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

2 comments
Jeremy
Jeremy

Thanks for Sharing that story, Art. This is exactly the type of thing I was referring to. There are some people such as plumbers that are worth their weight in gold.

Art Dinkin
Art Dinkin

My story: A stain appeared on our kitchen ceiling. Right above the stain is the Master Bath.. uh oh. I looked for gaps in the tile grout and re caulked the whole bathroom. No help.

So I called a plumbing company. They caulked over my fresh caulk and charged me $60! The stain continued to grow. A neighbor referred us to a plumber they know. He came over and spent 30 minutes looking at stuff. He finally said "Here it is!" Apparently, the guts of our shower valve had a pin hole leak. He ran out to Lowes and purchased a new part (I think it was $20). Took him 5 minutes to install it and charged us $35 (he paid for the part). I insisted that he take $50.

A couple years later I needed a new faucet. Rather than spending a part of my weekend getting frustrated, I just called him. I have referred him several times myself. Guess who I have never called again...