Successful real estate agents often quote referrals as their main source of business. However, a lot of agents spend most of their money on online lead generation and other things that have nothing to do with attracting referrals from the people they know.
Here are the facts. According to the National Association of Realtors, 88 percent of buyers and 85 percent of sellers would refer their agent to another person. If that’s true of your clients, imagine the willingness of your family and friends to refer you to others.
What if I told you that you could build a strong, referral-based business for less money and “wow” your sphere of influence all at the same time? Here are five steps on how to do it.
1. Start a ‘thank you’ account
Create an account to save money that you can use to thank the people who refer you business.
Put a percentage of your commission from every deal into this account; say up to 10 percent. Some of you pay up to 40 percent for broker-to-broker referrals; 10 percent is nothing.
2. Get to know your people better
It’s a lot easier to thank people when you know what their likes and interests are. You do not want to be the person that sends a Starbucks gift card to someone who hates coffee.
3. Thank early, and thank often
Don’t choose who to thank based on the quality of the referral. The first referral you receive from someone will likely not be their best.
You are going to be tested because their relationships matter too, and they want to be 100 percent sure that they can trust you.
Send a small gift or thank you to anyone and everyone who refers you a piece of business or creates a connection for you. Small gestures go a long way, even if it’s a simple handwritten note.
4. Create big memories
When you really want to thank someone, make it special! The bigger the memory, the more likely that person will want to refer you again. Here are a few ideas:
- Arrange a dinner reservation at a popular restaurant for the person you want to thank. Give the restaurant your credit card in advance to cover the bill, and tell your people to have a good time.
- Arrange a lesson with the local golf pro for the child of the person you would like to thank.
- Provide an evening getaway at a fancy hotel in the city.
The possibilities are endless!
5. Go beyond the referral thank you
Don’t just thank the people who send you business. Use your “thank you” account to thank your clients, business partners and friends — and create experiences for the people you care about. Here are just a few examples:
- Throw a client appreciation party.
- Rent out a local movie theater for a new feature film, and invite your sphere.
- Host a party at your home for the big game.
- Host a quarterly dinner party with rotating guests.
You would be surprised how little things like this cost and the amazing value they bring to the people you invite.
The best part about this strategy is that will you start to receive more business. Plus it’s fun, and you will see more smiles and have productive engagements with your sphere.
Matt Bonelli is a manager and broker associate at Turpin Real Estate, Inc. in Chatham, New Jersey. Check out his blog or follow him on Facebook.