If you take a look at the primary source of business for most of the top producers in your area you will discover that approximately 70% of their business is "referral" generated business and only 30% is "new" business.
Translated: These top producers spend very little time, if any, promoting their business. They don't have to - their business comes to them. It's not too often that you will find a 10, 12 or 15 year veteran of the business (if they are any good) actually spending a whole lot of time or energy "soliciting" new business. If they do it is usually in the way of farming.
Referrals are arguably the easiest, cheapest, most profitable way to build up your business, increase your volume, your commission checks, make your family happy, finance your vacations and the new Mercedes...
Most veteran top producers, by virtue of their time in the business, have generated a tremendous referral network if they are good at what they do.
So, that's one way of getting a good referral business going - stay in the industry forever.
That's fine, but not too fast. You need more immediate referral business. In fact, one of your primary goals as a professional real estate agent is to develop as many referral pipelines as you possible can - because they are so highly profitable and easy. (Because of the inherent profits on deposit in the "referral bank" we will have designed a number of strategies to garnering those referrals)
REFERRALS ARE MONEY IN THE BANK!!
Always, always, always be on the lookout for referrals. Referrals from friends, associates and family immediately puts you and your prospect on a common ground from the beginning which is a very, very powerful position to be operating from. Virtually every contact you meet can provide a referral or some other useful information if you ask the right questions. You'll learn a technique later which should help initiate questions and conversations - providing the "in" for your referral probes.
Who do you know...
Who do you know who was recently promoted?
Who do you know who just had a baby?
Who do you know who recently lost their job?
Who do you know who recently retired?
Who do you know who is getting married sometime soon?
Who do you know who is renting and is, perhaps, looking to invest in a place of their own?
This line of questioning helps your clients recall people who would be good prospects. Once you've secured a name, note it for later follow up.
A wonderful little technique to "pyramid" your referrals, even if the referral doesn't have a need today is ask, "Well, John, I really appreciate your time and have enjoyed speaking with you. Say, I'm going to be calling on other people in this area (who just got married; who might be looking for a place; who have been laid off, etc.). If you were me, who would you call on next?" ...... "Why did you pick him/her?"
Using this technique, when you are given a lead, the initial contact call is relatively simple:
"Peter, Rob Fore. I was visiting with John Prospect of XYZ earlier this afternoon, and when I asked him who else he thought might be considering a move into the real estate market, he suggested you. Let me ask you, Peter, why do you think he picked you?"
Beautiful! You will be warmly receipted in most cases because of the "referral" by a friend or associate AND when Peter answers the question he will, in effect, qualify himself.
And if you think about it, even if Peter doesn't have a need today - you can always repeat the entire sequence with him: "If you were me, Peter, who would you call next?"
And so it goes.
Behavioral scientists have known for years that a behavior rewarded is a behavior repeated.
Any parent knows the same truism. Good old "positive reinforcement" at its best. Thank you Pavlov; thank you Skinner.
With that in mind, one of the surest ways to generate referrals (and make no mistake - YOU must make them happen) is to offer "an incentive program."
It could be as simple as saying to everyone you know, "If someone contacts me to do business and mentions your name, I drop by with a free gift for you as my way of saying "thanks."
It could be that easy but usually not. ‘Out of sight, out of mind', and all that stuff.
So...we use a more formal and direct approach. We send them a notice of a new program we're instituting - our referral reward program.
Send this notice to everyone and send it often or remind them often. Your reward program should become somewhat of a trademark for you if you can pull it off. It can and will generate a tremendous volume of referral business for you because:
Any behavior rewarded is a behavior repeated.
Now, of course, YOU might like your customers and friends and associates to offer you referrals simply because you are soooo good and your service is sooo incredible and everyone likes you sooo much, why, of course they will tell everyone they know about you.
Still, in most cases, it simply doesn't work that way. Referral are, indeed, like money in the bank, however you must still initiate whatever steps are necessary to secure a withdrawal.
You need to ask for referrals and even resort to "bribes" if necessary.
REFERRALS ARE MONEY IN THE BANK!!
(Letter to old, dear friends/family)
Dear Bob and Bobbi,
It was great, just great, talking with you on the phone the other day. I can't get over how big little Bobbette sounds. Wasn't it just yesterday that we were all double dating down on the Boardwalk?
Man, time goes so fast, doesn't it?
Well, guys and gals, I want to run an idea past you and get your opinion. No big deal, just a new program I'd like to start implementing as part of my real estate business (which is going just great by the way, thanks for asking!). Anyway, one of my biggest challenges is marketing for new customers - you know, someone looking to buy or sell a house. Misty and I figured that it costs us around $100 or so to "find" a new customer - be it through newspaper ad or whatever. Yeah, no kidding - a $100! Can you believe it? Not that I'm complaining or anything. Oh no, no whining here.
Anyway, what we're looking to do is offer YOU and YOURS a portion of this money if you can help us to reduce our costs. We call it our Reward for Referrals program. It works like this:
For every referral you send our way that becomes a buying or listing customer of mine, you will receive your choice of the following rewards:
An all expense-paid trip to the Bahamas for 4 days and 5 nights (Ha! Just kidding!!)
A $50 cash-in-your-pants "thank you."
A $50 rebate to the person you referred.
A $50 dollar donation to your favorite charity.
A $50 gift certificate from any mall.
So, keep us in mind, will you. Not so much for the reward, but because we're friends and you know that I will do the best possible job for anyone you send my way.
Here's lookin' at ya -
Please make it easy on me, will you? If you use this form when sending referrals my way, I can more readily keep track of your referrals and provide them the professional service you're counting on. Besides, I else will I know who to send the "Reward" to? Thank again, and feel free to call me if you have any questions or concerns...or maybe just to chit-chat!
Home Phone:_________________Work Phone:_______________________
__________ Yes, we are 100% comfortable in using our name when you contact our referral. We've told them all about you and your wonderful service. They are anxiously awaiting your call!
__________ Yes, we are 100% comfortable with you using our name when you call, however, we haven't had the chance to really tell with them about you.
__________ No, please don't use our name when you call. Thanks.
Home Phone:____________________Work Phone:______________________
Home Phone:____________________Work Phone:_________________________
A Buyer's Market...or A Seller's Market?
It doesn't really matter, because...
Rob will PAY to help you make your move easier!! Simply use the attached certificate, worth $500 toward your commission costs, closing costs, moving expenses, repairs, etc.If you're not ready to make a move, but know somebody who is, let Rob service their real estate needs and he'll pay you $500 for your referral.
Call Rob For Complete Details!!
Another thing you might test is a referral reward program designed specifically for people with particular hobbies and interests. For instance, keep a record of all your golf loving customers, clients, friends and family. Design a letter specifically geared to them and their love of golf. Bribe them with a new putter or a dozen Ultra-Flites or something. If they love hockey or football or baseball - reward them with tickets to a live game.
You get the drift. The more "tailored" the reward to the individual, the more likely they will be inspired to act on it.
More notes on referrals:
Most top performing real estate agents operate from about 70% referral business. The mega-producers, usually, have been in the business 8-15 years or more. You need not wait that long to build up the self-sustaining business. All you need to do to generate this generous cash-machine of referrals is to, right from the beginning, concentrate your efforts on building a referral momentum. Prime the pump. If you market hard enough and long enough and with the right incentives - your business will boom.
Realize that referrals don't just happen. You have to jump-start the referral process. You have to constantly ASK for referrals and remind people that you are in the business. Out of sight is out of mind. That is especially true in business. Make it a point to concentrate a lot, A LOT, of your efforts towards priming the referral pump. It was pay off BIG in the long run.
Contact everyone you know and let them know what you're doing and what your about. Send them all a special referral reward letter, that is, take the time to personalize it as much as possible and "ask for their help."
You will be amazed at how much business you will immediately generate.
Testimonials are the next best thing to gaining referrals. And although you might hesitate to request endorsements or testimonials from your best clients, family and friends... please don't be bashful or ashamed about doing it! An endorsement can be a powerful business generator, especially when the person doing the endorsing is known & respected by the people who read or hear what he or she has to say.
Your endorsements can be presented through direct mail, your pre-sell, pre-listing packs, telemarketing, personal letters, audio tapes or video tapes. In fact, you should strive to use testimonials and endorsements every time you approach new, potential clients!
Testimonials will lend instant credibility to your services. Use them!
Be blessed and GREAT marketing!!
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