To be successful in real estate, there are many things that you must be good at. Negotiating contracts, building great relationships, understanding the market, working with people, and the list goes on and on.
To run a successful and profitable business, you must master the art of referrals and work to retain every client. According to the National Association of Realtors, “42 percent of sellers who used a real estate agent found their agents through a referral by friends or family, and 24 percent used the agent they previously worked with to buy or sell a home.”
1. Thank every referral source
The No. 1 mistake people make in running a referral-based business is not following up with the referral source. Have a system in place to keep that generous person informed on the status of the lead.
A good practice would be to set up a system to send a handwritten note to every client. Also, take the time to thank them with a phone call.
After you’ve made contact with the prospect, reach out to referral sources again to keep them in the loop.
Don’t stop there. Fill them in again after the deal closes. If for some reason it doesn’t work out, still keep them informed.
What typically will happen is that a referral doesn’t work out; the salesperson doesn’t follow up with the referral source, and it ends there.
It’s more than likely that the first referral someone gives you will not close. However, if you express gratitude for the referral and keep people in the know, your sources are much more likely to send you a referral in the future that will result in a deal.
2. Inspire referrals with touches
Many people make the mistake of sending a small gift or gift card when someone sends them a lead. This is probably better than doing nothing, but sometimes it might actually downgrade the relationship. Think about it.
If someone sends a referral that could result in a few thousand dollars in income for the salesperson and then is thanked with a $25 gift card, it might be perceived in the wrong way. Don’t give gift cards — about 80 percent never get used anyway.
Also, do your best not to make it a this-for-that relationship. The best practice is to touch your top 20 referral sources by sending them a gift or having a coffee date two to four times a year. This inspires more referrals and doesn’t make it a transactional referral relationship.
3. Follow up 10 to 14 days after closing
Many people don’t do anything to follow up after the deal closes. One of the best practices to keep the business flowing is to drop a gift to your client’s home or office two weeks after the closing. This gives you an excellent opportunity to meet people in their network and also get more referrals.
4. Establish professional pipelines
What professionals are currently sending you at least two deals every month? Take time to establish solid referral partners, and build your network. Understand that these relationships need to be worked, but once you get traction, it can be a game changer for your business.
Align yourself with attorneys (divorce and estate), financial advisers, CPAs and other trusted professionals that can easily refer you business.
Also, remember that 12.5 percent of people move every single year so position yourself as the trusted agent for churches, schools, organizations and large corporations.
These simple — yet effective — tips are a sure way to increase your business. Your network and connections are all you need to build a successful business. You just need to spend time with your people and let them know how much you value their business and referrals.