Of the 109 readers running $1M+ tree companies who filled out our operator survey, 46 run on referrals alone. No Google Ads, no LSA, no Meta. Of those 46, 29 said hiring is what holds them back. Six said gaps in the calendar.

So for most of the no-ads crowd, the limit is people, and that changes the math. If you can't add a crew, every day on the calendar is already spoken for. A crew-day spent on a job you didn't want is a crew-day you can't give to one you did. The phone keeps ringing anyway. Referrals keep the board full, and they carry further than this industry gives them credit for.

There's research behind that. A study of about 10,000 customers at a German bank (Journal of Marketing, 2011) found referred customers were worth at least 16% more over six years than similar customers who came in some other way, and they were more loyal. A bank is not a tree company, and those customers came through a paid referral program, so take it as direction, not a forecast. Still, the engine is real.

Steering is where it slips. The same researchers explain why referrals work so well: people "are likely to refer others who are similar to themselves." That cuts both ways. A referral brings you whoever your last customer happens to know. Fine engine, poor rudder.

That works as long as the jobs you want and the jobs arriving are the same jobs. If your book is residential removals and you like it that way, referrals will keep sending removals. If you want more commercial accounts, plant health care contracts, or the next town over, your current customers' neighbors won't bring those to you on their own.

It matters more if you ever plan to sell. Mark E. Battersby put it plainly in TCI Magazine in August: "PE investors usually avoid businesses where the owner is the sole salesperson and top climber." And CT Acquisitions, an M&A firm that works for buyers, calls recurring plant health care revenue "the single biggest premium driver." A referral book that runs through your cell phone is the version a buyer marks down.

Before you chase more leads, check whether the ones you already get still point at the work you want.

Pull your last twenty booked jobs. Before you judge any of them, set two kinds aside: off-season work you priced low on purpose to keep crews busy, and small first jobs that turned into bigger work later. Those were decisions you made.

Then ask two things of each job that's left. Is this the kind of job I want? Was the price right?

Keep the answers in separate columns. A No on price is a pricing problem, and a price increase fixes it. A No on the kind of job is the steering problem. Count those. That number, more than your lead count, tells you whether word of mouth still points at the work you want.

Write that number down, because it's your baseline. Run the same check on your next twenty jobs in 90 days. If the steering count drops, the referrals you went asking for are working, and you'll have the proof on paper instead of a feeling.

Action Steps:

CT Acquisitions, the firm quoted above, keeps a free tree care business valuation calculator, along with their take on what moves the multiple (recurring plant health care work tops their list). They're a buy-side M&A firm, meaning buyers pay them, so read it as one side's view. It's still a useful gut check on what your referral book is worth to someone else: tree care business valuation calculator. (We have no affiliation with this resource.)

Running with no ads is an okay choice when the jobs coming in are the ones you'd pick and the ones that help you grow the company. The engine doesn't need work. The rudder does, and you steer it by choosing whose referrals you ask for, and by knowing where every job came from.

If you want a second set of eyes on where your jobs are coming from, reply to this email, and I'll help you figure out where to start.

See you all next Saturday!

- Jacob Hastings

The Backcut