I was asked by my friend Seth Price of Placester to share some of my thoughts on the benefits of a Realtor setting up a referral program. They are gathering the thoughts and ideas from top agents, brokers and educators to compile some content for their Real Estate Marketing Academy. After putting some thoughts on paper, I felt it was something that my Carp’s Corner reader might enjoy as well.
Referrals are Critical to the Success of Your Business
Earning consistent referrals from your friends, family and past clients is a critical piece of any successful Realtor’s business. When you can earn people’s trust to not only use you but also refer you to people they know, you will have built a business worth owning. It all starts with providing a memorable experience to your current clients. When they are done with their real estate transaction, will they feel so good about their experience that they will want to tell others about it?
Who are the best people to ask for referrals? Many people would say your former clients and while that is a good place to start, the better target for solid referrals are your CURRENT clients. The buyers and sellers you are working with today are the best referral sources because they are thinking about real estate every day. Your clients who closed on a house or sold their home last year or longer ago aren’t waking up every day thinking about the real estate world but your current clients are. They go to work thinking about real estate and surfing the web portals for new houses to see. They are asked by their neighbors if they’ve had any showings on their home or if they’ve received any offers yet. They are the people most likely to hear “we are thinking about buying/selling a home. Any advice for us?”
One Step at a Time
A good referral program is built around 3 simple steps – Ask, Train and Reward.
1. Ask – You must be comfortable asking people to refer you potential buyers or sellers. Make it a simple request by asking if they could “do you a favor.” Share some business cards and ask them to pass them along to anyone they know who might have real estate questions. Remind them that referrals are critical to your business.
Never ask them if they know “anyone” who has a real estate need because when asked to think of anyone, most people think of no one. Instead, use the dialogue “of the people in your __________________, who do you think will be the NEXT person to move?” The ________________ could be specific groups like neighborhood, softball team, department at work, etc. By asking for the NEXT person in their group, they will be picturing the faces and stories of specific people such as that co-worker who just got engaged or the neighbor who just found out they are having twins.
2. Train – When you have built a loyal group of fans by delivering memorable experiences, you need to teach them what to listen for that might lead to a referral opportunity. Once they hear one of the trigger words or situations, how should they react? It’s probably best if they get permission from the potential buyer/seller to have their Realtor/friend/etc. call them. Ask them to add in why they enjoyed working with you and why they feel so comfortable recommending them.
3. Reward – As soon as someone sends you a referral the first thing you should do is thank them. If they give it to you in person, look them in the eye, smile and let them know how much you appreciate their trust and support. If it comes via email, text or phone, say the same thing but make sure they can “hear you smile” on the phone.
It’s also an excellent idea to follow-up your immediate display of appreciation with a hand-written note thanking them for the opportunity. If possible, drop in a small token of your appreciation such as a Starbucks card or a coupon for a free ice cream cone. This should be something of minimal value ($5-$10). When I would send ice cream coupons, my note usually said something like:
Dear Jack & Diane,
Thanks for the referral of John Mellencamp. That was really sweet of you to think of me so I thought I’d return the favor with something sweet for you. Enjoy a scoop on me this summer.
What you want to do is show your appreciation and start applying the principles learned in Psychology 101 – Activity that is rewarded is repeated. [Be sure to check your local state regulations as inducements are usually illegal. You cannot send out promotional materials that say “If you send me referrals, I will send you _______” as that is a straight our inducement however, a note of thanks with a small token of appreciation is usually okay as long as it is of “de minimus” value]
I used to love the feeling of people contacting me after receiving my thank you note and saying “That was so nice of you Sean but you didn’t have to do that.” I simply replied, “I know, but there are over 5,000 Realtors in Central Ohio that you could have referred Mr. & Mrs. ________ to and you thought of me. I just want you to know how much I appreciate your loyalty and trust.”
Start Earning Your Referrals Today
So which of the three steps do you need to focus on to start earning more referrals from your sphere of influence? Whichever one you choose, remember that it all starts with providing the memorable experience first to the clients you have so you can earn their referrals and repeat business in the future.