Working with referrals is the most enjoyable way to do real estate business. Referrals are:
- easy to convert because they already know they can trust you; and
- more profitable because you don’t have to spend money advertising to find them (in fact, studies suggest it costs seven times more to acquire a new client, than it does to do repeat business with a previous client or referral).
Want more referrals?
Here is a simple, 3-step system to encourage more people to refer you using the acronym: EAR.
E – Earn
A – Ask
R – Recognise/Reward
Step 1: Earn Referrals by “Wowing!” Your Clients
Do you know there is 1 real estate professional for every 118 private dwellings in New Zealand?* That’s tough competition.
*Calculated on 15,157 active real estate licenses (Source: REA 31/10/19) and 1.8M estimated private dwellings (source: 2018 Census, Statistics NZ).
To generate a continuous stream of referrals, outstanding, extra-ordinary, unexpected service before, during and after the transaction is required. This isn’t simply doing the job to the customer’s satisfaction; it’s providing service that makes you a topic of conversation at the housewarming party:
“The agent we bought from was amazing – Tom. On settlement day he popped around with the keys and a beautifully gift-wrapped bottle of champagne. Then on move-in day we unexpectedly got a delivery of pizzas, also courtesy of Tom. He phoned a day or two after that just to see how everything had gone and later in the week popped in with a “welcome to the neighbourhood pack”. It had a stack of discount vouchers from local businesses he’s teamed up with – a 2 for 1 lawn mowing service, a free child’s cut with an adult haircut, a one month gym membership and more. We’ve just received what looks like is an interesting monthly newsletter. He really made us feel like we were important.”
Tom made it easy for his clients to talk about him by “wowing” them with outstanding, exceptional and unexpected customer service.
Step 2: Ask for Referrals
You’d be surprised how many of your clients haven’t even thought to refer you. Some may even think you’re so busy you don’t need referrals. It’s your job to ask. And if you’ve “wowed” your clients, then you’ve certainly earned the right to do so.
Ask for Referrals In Person
At the end of a transaction simply ask:
“Just before I go today, I have a favour to ask, but only if you’re okay with it. Referrals are a really important part of my business. I’ve noticed over the years that when people are in the process of buying and selling they often run into other people thinking of buying or selling. Who do you know that might be interested in my real estate services? What are the names of 2 or 3 people you suggest I speak to?”
Send a Referral Request Card With Your Newsletter
Two or three times a year, say January and August when the season traditionally is about to get busy, include a small referral request card with your posted monthly newsletter, and insert a section on your email newsletter.
Step 3: Recognise/Reward
Recognise and reward all referrals, whether or not they result in new business. This encourages your clients to refer you again.
Thank the referrer with a phone call and a handwritten thank you card. Consider adding a small gift e.g. chocolates, movie tickets or a gift voucher. When the referral results in a sale, instead of the standard $500 cash referral fee, try being creative: a bottle of your client’s favourite wine, dinner vouchers, flowers, a gourmet cheesecake.
- What one thing could you add to your sales system to “wow” your clients?
- Make asking for referrals part of your sales process.
- Include a referral request card with your next newsletter.
- Make it a habit to thank every person who refers you.