Building a Referral Business

By
Real Estate Agent with Keller Williams Realty

I want to share few Ideas that I am working with  to get a good referral business, please share anything else that you might be doing that is working for you. I am sure that a lot of you use these methods to generate business......just a little FYI......To share ideas and brainstorm is great , I always learn new things from these post.

A great thing about referrals is that you can make more money in less time and with significantly less aggravation. Referrals already trust you much more than a stranger would, so you don't have to spend a lot of time initiating relationships with them. You should focus on building your referral base in order to get to the point where it can generate enough business to enable you to avoid having to make cold calls.

And keep in mind that when the time comes to retire or get out of real estate, you can sell your client base to another agent. But first, you need to get a good system in place.

In building strong relationships with your past clients, it's important that you see how the Client Value Chain works. Try to bond with your clients either through awareness, identity, relationship, community or through advocacy. Here are tips to help you move forward:

  • Adopt orphans. These are people who have bought or sold real estate through your office, and the agent who was involved in that transaction no longer works for your company. Get all the closed files of that agent. You'll find a lot of new prospects in there.
  • Get in touch with expired real estate agents, i.e., those who have retired from or quit the business, but who still have an active license. Ask them to sell their referrals to you in return for a "passive income".
  • Get endorsement letters. Approach a target group of professionals, e.g., attorneys, accountants or insurance agents, about sending out a letter to their client base endorsing your services in return for you doing the same. Each party will benefit from the "third-party validation" and from reaching people you couldn't have reached otherwise.
  • When you send a list to your sellers or buyers telling them what to bring to closing, include on the list a testimonial letter about your services. It would be just one of the documents for them to execute. You then can use these for future mailings.
  • Change of address cards. Get a list of friends and family from your current buyers or sellers before the transaction is complete. Tell them you will provide a free service by mailing out a change of address card. The whole point, of course, is to build your database. To be sure, individuals receiving a change of address card are not referrals but cold leads.

Meantime, stay in touch with your referral base. Contact them four to six times a year. Here are ways to do it:

  • Send personal cards.
  • Give personalized stationery, perhaps as a closing gift. It could be notepaper imprinted with the client's name and new address, or a "to do" pad with their name on top and your name and phone number on the bottom for reordering.
  • Send postcards while you're on vacation. Write out the postcards in advance, and mail them while you're away. People will be amazed that you thought of them when on vacation.
  • Mail out an updated comparative market analysis (CMA) request letter. This technique is geared toward people who have bought a house through you before. People may not realize how much their house is worth, and discovering extra equity might motivate them to buy a new home.
  • Whenever you list, and whenever you sell, announce it to everybody. Mail to your referral base, or everybody you might possibly serve. You want to show people that you're doing business, while keeping your name in front of them.

The most efficient way to grow your business is for satisfied clients to recommend you to everyone they know. It's far easier and cost effective. The key is to serve your customers and to consistently communicate with those in your database

Comments (1)

Kay Perry
Kay Perry, Broker - College Station, TX
All excellent points.  Yes if you keep your past customers happy, you will get many referrals.  I like your other ideas as well.
Oct 31, 2007 10:00 PM