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Creating a Referral Machine for your Business

By
Education & Training with Berman & Pollinger, LLC.

Tired of marketing like a maniac but not getting any clients?  Beef up your referral systems, and soon you'll have all the clients you want.

Here are ten secrets of building a referral machine that builds your real estate business:

1. Network, network, network.  And when I say network, I don't mean join groups and never go, or go but skulk around the sidelines, I mean network actively.  Talk to people about their businesses, and your business.  Mingle with people you've only met once so that you get to know them better.  Introduce yourself to everyone you don't know, and learn how you can refer to them, then tell them how they can refer to you.

2. Build a Group 100.  A Group 100 is a network of 100 people with whom you have a reciprocal referral agreement.  You feel comfortable referring others to them because you have personally sat down with these folks, and learned enough about their businesses to understand who will really benefit from their products or services.  In the process of learning about them, they will learn about you, and so you have just expanded your network to the 300 people each of your Group 100 folks knows!

3. Refer to other people.  Referrals are almost like yawns in that they spawn more of the same.  I receive reciprocal referrals more often when I am referring to others, so I make it my business to refer as often as possible.  Make sure that they are quality leads you are giving.  You don't want to waste time with bad leads, and neither do your partners.

4. Ask for referrals.  Ask your clients, ask your prospects, and ask your colleagues.  But ask correctly.  Don't ask if they know anyone who needs your services, because they might not know off the top of their heads.  Sure, they know a lot of people, but may not think of the right person to refer to you unless you ask in the right way.  The right way is to ask a clarifying question such as, "You're active in your neighborhood association, aren't you?"  A positive response sets up your request for referrals: "Do you know anyone in your neighborhood who is also thinking about selling or buying a home?"  That focuses the attention on a specific group, rather than on all acquaintances, which is more likely to result in an actual referral.

5. Give it away.  Not your services, of course, but something valuable to people who are thinking about buying the services or products you have for sale.  For example, you might have a free report or checklist on choosing the right professional for the job that you do.  Once it becomes known (through your web site, press releases, and word of mouth) that you offer a great tool for figuring out how to buy what you're selling, you can become the go-to person for real estate related services in your community.

6. Become visible.  If you're not on the internet, you're invisible.  But just one little web site isn't going to cut it these days; you need higher visibility.  Get listed on your networking organizations' web sites, send out press releases, participate in community projects, and assume leadership positions in one or more of your social, business, or philanthropic groups.

7. Establish a stellar reputation. If you know that you're good, but not sure your clients are raving about you, ask them for written testimonials (but don't you dare write them yourself!).  They will write much nicer things about you than you would ever write yourself, and the process reminds them of how good you are, so they are more likely to refer to you.

8. Create a rewards program for referrals.  Set up a system that gathers information about how your clients heard about you, and reward those who refer to you.  It can be as complicated or as simple as you like, but remember: if you promote it, you must honor it. 

9. Develop strategic alliances with non-competing businesses.  Find out who works with your clients before they need your services, and set up a system that funnels their clients your way.

10. Reward referrals, not sales.  It is your responsibility to close the sale, so always measure the success of your referral program by the number of referrals you get, not sales.

 

Carpe diem,

Chris

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Comments (71)

Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Referral business is so important for all of us.  It is easier business to convert.  I agree with your points  - it looks like much of what I work towards. 

Jul 18, 2008 06:09 PM
Anonymous
Hilary Shantz

Starting a BNI group where we meet weekly to exchange referrals is paying off for me.  It takea a while to build trust and credibility but now it is generating regular referrals for me.  Blogging is also anothere way that is working for me and regular communication with  a database of people.  Just emails I find is the least expensive and expedient way.

 

Always good to read what others are doing!  

 

You made me think of a good thing to do, as you are finalizing with a client on their move, ask them directly if they know anyone who is planning to move this year? Would they mind if you gave that person a call?  Arecent happy client is the best source of referrals!

Hilary

Jul 19, 2008 02:38 AM
#53
Gary Sloan
Discovery Inspections, LLC - Atlanta, GA

What a great volume of useful tips in this blog.  Networking is important to any business.  Those who are thriving are Master Networkers.  Being shy and cautious will not cut it.  Good blog!

Jul 19, 2008 06:34 AM
Esko Kiuru
Bethesda, MD

Chris,

Very thorough lesson a solid referral system. One point that really caught my eye was the building a group of 100, or whatever number you like. Maybe 75 or 125. That can turn very lucrative if properly nurtured.

Jul 19, 2008 03:11 PM
Team Honeycutt
Allen Tate - Concord, NC

All very good points that are good to hear again to refresh our referral outlook.

Jul 20, 2008 02:56 AM
Maya Thomas, Broker
Tampa, FL
Please see my client recommendations.

Nice reminder to get out there and be seen!

Jul 21, 2008 04:01 AM
Florida Private Golf Communities
Golf Life Properties, LLC - Palm Beach Gardens, FL
Finding Home Never Felt Better!

Referrals are what keep you going in a slower market, but more importantly the type of quality leads that we all want to work with all the time.

Jul 21, 2008 05:19 AM
Freddie Smith
Aasent Mortgage - Snellville, GA

You hit the nail on the head Nishika. Its all about referrals, especially at this time. And if the lead quality is great just makes our jobs alot more easier. I know as far as myself, I try and reach out to Realtors in the southeast market to try and pair them up with qualified agents. Also vice-versa I get leads from a couple agents that send me quality leads to get borrowers financing. Its a win..win for everyone when it all works out.

Jul 22, 2008 03:30 AM
Norma J. Elkins
Elite Realty Group - Morristown, TN
Realtor - Elkins Home Selling Team

Referrals are the key - thanks for sharing - great post!

Jul 22, 2008 10:06 PM
DeAndrea "Dee Dee" Jones
Samson Properties - Manassas, VA
DMVRealEstateChick

The last two years my  referrals have increased greatly.  The more your not begging and hounding people for them and just stay genuinely visible the more they come around willingly.

Jul 23, 2008 12:24 AM
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Chris,

Excellent post, thanks! You're preaching to the choir with me on this one. I was in the By Referral Only Program for years, it's my philosophy of business. I have a top 120 list, that's where the majority of my biz comes from. I  can't ever do enough for these folks.

Jul 23, 2008 05:07 PM
Karl Burger
ERA Beach Ball Realty - Pensacola, FL
Pensacola Real Estate News

Sweet post. I'm glad Jennifer linked to this post in a follow-up or I never would have found it. Thanks for the great motivation.

Jul 24, 2008 07:49 AM
Antoinette Murphy
RE/MAX Atlantic - Absecon, NJ
GRI

Chris, great ideas for getting referrals.  Thanks for sharing.

Jul 27, 2008 03:31 PM
Tracy Santrock
Santrock Realty Group Inc. , - Cary, NC
Raleigh - Cary Broker

Chris - excellent tips for any agent trying to grow their business. I'll need to bookmark this one.

Aug 03, 2008 03:29 PM
Dominic Zendejas
KASE Real Estate - Mission Viejo, CA

Referrals are the easiest way to achieve success. Thanks Chris for the reminder and the well put together thoughts. This entire post is a keeper

Aug 08, 2008 06:01 AM
Joe Smith
Property and Casualty for Professionals, INC - Beaverton, OR
Insuring what matters to you!

I would like to suggest changing the vocabulary.  Instead of asking for referrals ask for recommendations.  I have found that people will recommend you before they will refer to you.  It sounds odd but it has worked for me.

Aug 08, 2008 11:41 AM
Team Honeycutt
Allen Tate - Concord, NC

Great reminders....thanks.

Aug 08, 2008 02:03 PM
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ
Broker/Owner

Hello!  I am very new to blogging on Active Rain and I am enjoying reading as many articles as I can find.  This one, I enjoyed alot and especially agree with #10 - I do that often!  My version of "network, network, network" is "5 A Day" - my goal is to talk to 5 people a day about themselves and introduce myself!  Thank you! -- Gabrielle

Sep 24, 2008 02:33 PM
Sonja Adams
Keller Williams Realty - Purcellville, VA

Great blog...I would not have thought of the Build 100 list....that is something I'm going to have to work on.

Sep 25, 2008 03:04 AM
AMBER NOBLE GARLAND - Top Real Estate Expert, Property Tax Appeal Specialist & Author
Strategic Marketing Expert & Relocation Specialist Serving New Jersey and nationwide! - Marlboro, NJ
- The Agent You Can Trust To Deliver REAL Results!

Great "reminder" post Chris...Thank you!!

Oct 08, 2008 06:24 PM