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Developing Your Referral Strategy

A referral mindset exists when every prospecting, marketing, and customer service action is accompanied by the realization that the contact could lead not only to new business, but also to positive word-of-mouth and the recommendation of your service to others.

A referral mindset exists when you create, believe in, and implement strategies that purposefully generate referrals as a regular part of your business development activities. * When you have a referral mindset, you know that prospecting is a key route to referral success. In the same way (and often at the same time) that you prospect for client leads you need to prospect for referrals. Generating referrals is among the easiest, most cost-effective ways to gain new business leads, but success doesn’t happen overnight. Even your platinum-level referral sources need to be constantly contacted and reminded to send business your direction. Defining the type of referrals you seek Before you launch a referral-generating effort, know what you’re looking for. In a sentence, you need to be able to focus your referral sources on an idea of what your ideal real estate prospect looks like. Include the following information:

Moments that people become great prospects. Help your referral sources notice the signs that indicate friends are in the “thinking about moving” stage. This is the point at which you most want to enter the game, before the transaction is already underway. Universal signs to watch for include: Pregnancy, recent adoption, promotion, transfer, trouble with aging parents, a recent empty nest, or trouble in a marriage or relationship.

Left to their own good intentions, people will call to tip you off about people they’ve just learned are in the buying or selling process. By the time that a mutual friend hears that people are actively looking to buy or in the mindst of selling, it’s too late. By then, the prospects probably already have an agent relationship.

Your interest in helping people to sell their homes. The standard consumer view of real estate agents is that they put people into their cars, drive them around, and sell them houses. If you don’t expand this initial impression, most of your referrals will be for people seeking to buy rather than sell homes. Buyers are great clients and important sources of revenue, but the best agents build their businesses through listings. By cultivating referrals for those thinking about selling their homes you’ll put your business on a faster growth track.

Your real estate niche. If you’re particularly effective serving a specific niche of real estate clients like investors, seniors, younger-generation buyers, or first-time buyers, let people know. Likewise, if you want to gain more of a certain kind of buyer, you need to inform your referral sources about your expertise in the desired segment and what prospects in that area look like.

When communicating your market niche interests, start by sharing your overall competitive market advantage and inviting all referrals. Then explain how you’ve developed a particular niche market expertise that you want them to know about so that they’ll think of you when they learn that their contacts have interest in your specialty area.

Your point isn’t to get referral sources to screen leads for you. You still want them to recommend the name of anyone with interest to buy or sell property; the more the better.

Setting your goal In a really effective referral-development program, you might aim to achieve two referrals a year, on average, from each of your platinum-level sources, one a year from those in your gold group, and one every other year from those in the silver category. Referrals from sources at the bronze-level are too hard to project, but for all other categories, you need to give yourself an annual goal to aim at. In the beginning, you might just pluck your goal from thin air, but once you establish your first year expectations (or hopes), you’ll have a good benchmark against which to measure progress and set your aim in future years.

As you set goals and track progress, consider these tips:

The number of referrals you aim to generate from platinum level sources should be double what you expect from gold-level sources, and your expectations from gold-level sources should be double what you expect from silver-level sources.

Whenever you receive a referral, note whether the source is listed in your platinum, gold, silver, or bronze categories. This will help you track whether those in each category are performing at the projected levels. If not, you’ll know to enhance communications and referral-general efforts accordingly.

As you qualify and work with referrals, note which of your database groups – platinum, gold, silver, and bronze – are delivering referrals that lead to business. If you notice that some categories are generating referrals that are dramatically more or less qualified than other categories, study your own communications to see how your messages to those in various groups may be contributing to good or weak leads.

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