Securing referral business is a lot easier than you think. It’s not quite as easy as putting a bunch of these out in your marketplace:
But it can be fairly easy if you put a proven process in place.
The great news is that the numbers are in your favor: well over 80% of your current and past clients would be willing to give you a referral.
That said, there’s more to it than simply asking someone for a referral.
Referrals Really Are the Best
“The Agent-to-Agent Referral Economy: A study of the power of referrals in real estate,” was conducted and executed in 2017 by 1000watt, a brand and marketing agency out of Portland, OR. 1000watt explored every part of the referral process for real estate agents and discovered that a typical referral closed at rate of around 50 percent for the majority of participants.
Among the 1,435 agents who responded, nearly half of them believed they close 10-25 transactions per year. Roughly another 41 percent close 26-75 per year. In addition to that, more than 40 percent of those who participated in the study said that they got one to five referrals per year.
About 20 percent of them said that they received six to 10.
Overall, respondents said that most of their inbound referrals resulted in a closed transaction.
If you’re looking to create demand from a reliable source for your business, past clients, sphere and other real estate agents are all groups of people you should consistently stay in contact with in every market environment.
Here are 3 easy steps you can follow to put this strategy in place in your business.
Step #1: Ask early and often
Clients are most excited at two times during the transaction: when they first start the process and when it’s time for the closing.
Once you get a listing or buyer agreement signed, it’s a great time to ask if your new client knows anyone who is looking to buy or sell a home that could use your services.
You have to remember that people would almost always rather work with someone they know, like and trust.
And that should be your mindset every time you bring on a new client.
If you’ve ever bought or sold insurance, then you know that it’s a common practice for insurance salespeople to ask for the names of up to 10 people who you know that might be open to discussing their life insurance needs.
I’m not advocating that you ask for 10 names, but certainly, 1 or 2 will certainly fill the bill.
As you create that habit, be sure to check in throughout the transaction, especially at closing, to see if you can get some additional referrals from happy clients.
Step #2: Add massie value to build mindshare
Membership, as American Express would have us believe, has its privileges.
We’ve had a lot of success in generating repeat and referral business in the past by making our prospects, current and past clients and the members of our sphere members of our Raving Fan Club.
The Raving Fan Club is a program where you can offer a suite of programs and services from your company as well as from your vendor’s companies as well.
It delivers a tremendous amount of value and helps you stay top of mind with the people who are in the program.
Originally, it started with this offer:
- Use of company copier, scanner and fax machine
- Use of company conference room for meetings
- Use of office phone for private business conversations
- Preferred vendor relationships: mortgage, insurance, inspector, title, home warranty
- Notary services when available
People loved having access to just that and it worked like mad for us.
However, as business got more competitive and agents started to copy what we were doing, we had to step up our game.
To do that, we started offering things like:
- Yard Tools
- Power Washers
- Moving Trucks
- House Tools
- Discounted access to businesses in the area
- Local Hardware Stores
- Handyman Services
- Cleaning Services
We also created a simple plastic card and key fob that Raving Fan Club members could present to our vendors to get the discounts we negotiated for them.
The Raving Fan Club gave our members something tactile that they could use to feel like they were part of something that was elite and not available to just anyone.
In addition to that, we were able to reduce the cost of running the program by having vendors pay a fee to be a provider in the Raving Fan Club.
It was a huge win for everyone involved and it helped us take our repeat and referral business to amazing levels of success.
Step #3 Stay in contact consistently
“I want to be your real estate agent for life.”
Agents splash that everywhere: business cards, listing presentations, websites, signatures of emails, etc., but how many of them engage deliberately in activities that show their clients that they’re committed to making that a reality.
If you want to be part of someone’s life, then you need to actually do things that demonstrate your desire to do that.
I recommend putting together an ongoing contact strategy that helps you remain connected with your clients long after they’ve bought or sold a home with you.
Here’s a sample contact schedule that you can use to keep people updated on the offerings in your Raving Fan Club as well as stay in touch with them on a month-over-month basis:
- Monthly email of market trends update for your area - I like www.realmarketreports.com
- Quarterly call from your team - doesn’t always have to be you
- Quarterly handwritten notes to clients - whether you speak with them or not
- Birthday card delivery with a small gift card - $5 to $10 goes a long way
- Thanksgiving pie pick up day
- Two annual events: spring/summer and at the end of the year (be sure to get your vendors involved(
It doesn’t have to be elaborate; it just needs to be authentic and consistent.
By implementing this strategy, you will stay in touch with the people in our database and foster strong, long-term relationships with them to the point where they’ll want to send you referrals because you take such good care of them.
When it comes to making your business more profitable, your first thought should not be: “Where can I go spend some money to get more business?”. Instead, you should focus on how you can get more out of what you are already doing.
There is a veritable gold mine in your database and in the people that you know or have already done business with in the past.
A little planning and a lot of implementation of what we’ve shared here today will go a long way in helping you grow your business exponentially well into the future.