Year after year, the Annual NAR Profile of Home Buyers and Sellers reveals that the #1 way buyers and sellers find an agent is by referral – or by using an agent they’ve worked with in the past. This last year proved to be no different, with 53% of buyers, and 66% of sellers reporting they found their agent this way.
These are pretty overwhelming stats, but the pain of it all is, even with the majority of clients coming in through these avenues, most agents still aren’t tapping into the lion’s share of repeat and referral business that are available to them.
What’s the Reality?
The findings about referrals show that if you do your job at all, you’ll more than likely earn a referral from each client you work with:
A Deeper Look at What’s Going On
What I really found interesting about these stats is that they show us that some agents have figured out how to generate multiple referrals from a single client – 19% of buyers and 26% of sellers have recommended their agent at least 4 times… or more!
The point is, people willingly refer business to agents they’ve worked with in the past. If you want to multiply the number of referrals you’re getting from each client, you need to condition them to send you those leads by building referral programming into your everyday business… and this strategy works so well because it plays off something called the Reticular Activator.
Have you ever been thinking of buying a specific model or color of a new car and suddenly you notice all the cars on the road that are similar to the one you’re thinking of purchasing? That’s your Reticular Activator working, and it’ll put extra commissions in your pocket when you’re able tap this within your clients.
Where to Start
People don’t know that your practice is fueled by referrals, unless you tell them. And the most effective time to start talking about how your business works, is during the transaction. Why? 3 reasons actually:
First, you have a client’s undivided attention, so it’s your best chance to get anything important across. Second, the transaction process usually bonds people with you, so it’s a great time to talk about doing more business together down the line. Third, clients are immersed in the world of real estate during the transaction process, so they’re likely having conversations with their close personal contacts about buying and selling, which is the perfect opportunity to fish out prospects that need your services.
Here are several strategies to have at your disposal for subtly programming your clients to send you referrals during the transaction process:
Your Business Cards
The back of your business card represents advertising space that’s probably not being utilized… and I know agents who put all kinds of information on the back of their cards: Offers for special reports, offers for a “specific list of homes”, offers for your “Maximum Home Value Audit” or other things buyers and sellers would like to have, but these offers don’t generate new leads.
One of the neatest little tricks I’ve ever seen is using specific REFERRAL language on the BACK of your business card, letting people know you readily accept referrals. You can tweak the language, but here’s something to get you started:
The Loyal Client Reference Sheet
This next item should become a mainstay of your listing presentation, buyer qualifying package, or any other materials you give to clients. It plays off the power of testimonials in your practice, only it’s designed to program clients for referrals. I call it the “Loyal Client Reference Sheet™,” and it does a couple of things:
First it reveals how you’ve helped other clients and acts as a testimonial sheet, showing positive feedback and experiences from clients. More importantly though, it subtly shows people that you earn clients through referral. Here’s an example of a “Loyal Client Reference Sheet™” to give you a feel for how to create it…
Deliver Back Issues of Service For Life!®
This is a great trick that works like a closing gift, but when you first meet a client… deliver back issues of Service For Life!®, a newsletter completely designed around referral programming. Giving each client a few issues up front, immediately creates the dynamic of reciprocation, and bonds them closer to you. Plus, while they’re reading all the great articles and referral triggers built in on your behalf, they’ll also be learning about the valuable resources, reports, guides and services you provide, get answers to important real estate questions, and get to know the standard by which you practice, all positioning you as a trusted professional.
Try giving this real estate newsletter to your clients next month – you’ll be amazed.
Work It into Conversations
If you spend any time with your clients, there’s plenty of opportunity to subtly program them to think of you when they run into a referral opportunity. Here are 5 ways to add it into your discussions:
- Tell a Story about Clients who Came to You by Referral – people are always intrigued with stories and they help you make a point very subtly
- Give A Living Example – sharing the experience of someone who faced the same situation as your clients and how you helped them, gives your clients confidence in your abilities and also makes people think of others they might know that need the same help.
- Be Straight With Them – Ask your clients if they are satisfied with your services and if they would refer their friends and family to you in the future. This not only helps reinforce that you’re doing a good job, but also triggers them to think of people they might be able to refer right then and there.
- Talk About Life Events that Relate to Real Estate – Chat with clients about getting married, having kids, sending their kids off to college, downsizing – not all at once, but these conversations provide opportunities to get people thinking about their close personal contacts and might help them think of someone who needs your services.
- Get Referral Programming Into Your Testimonials – When requesting testimonials from clients, ask them to reveal how they learned about you. In many cases, they’ll reveal they came to you via a referral from a friend. Showing this to your prospects and clients helps them understand that you receive much of your business by referral.
Do yourself a favor and employ at least 2 of these referral strategies into your business immediately, today. These ideas won’t make you rich, but they will definitely bring you a deal or two that you wouldn’t have seen otherwise. As time goes on, employing these subtle differences into your marketing can multiply your referral business for years to come.