3 Ways to Unlock the Power of Real Estate Referrals

The end of a real estate transaction doesn’t mark the end of your relationship with the client. In fact, this is a transitionary period that will really determine if your relationship develops into more money-making opportunities.

“We believe that the next transaction is embedded in the current transaction. A simple ‘ask’ is all that is needed,” says Michael Hickman, CEO and president of Seven Gables Real Estate.

There’s a big misconception among new agents. Just because the transaction is over doesn’t mean the real estate agent and buyer and seller relationship has to be, too. You actually want to continue building a close connection, because guess what? That’s how you’re going to get their return business—and, more importantly, that’s how you’re going to get quality referrals.

“People like to do business with those they know, like and trust. Referrals end up being about 85%-plus of our business,” says Carrie Lukins, broker/owner of Sellstate Alliance Realty & Property Management. “If you’re not actively asking for the referrals from your clients, past and present, then you are leaving so much business on the table for others. Create a systematic approach to ask for referrals and watch your business flourish.”

Here are some stand-out statistics from Social Media Today that highlight the importance of referral programs in a marketing strategy:

– 78% of B2B marketers said that referral programs generate good or excellent leads
– 60% of marketers said that referral programs generate a high volume of leads
– 54% said that referral programs have a lower cost-per-lead than other channels
– Marketers rate referrals as the second-highest source of quality leads

According to Creig Northrop, founder and chief executive officer of Northrop Realty, a Long & Foster Company, real estate referrals should be considered “gold in those hills.”

“Agents look so much at new business, they tend to forget old business. If you want to create a business that’s not impacted by market conditions, focus on referrals,” says Northrop.

So, before you prematurely end what could end up being the most lucrative part of your business, follow these tips to keep a good thing going.

Maintain an interest. This should be genuine. No one wants to hear from their agent a year later if it’s just going to be a sales pitch.

Keep in touch and up to date on what is going on in their lives. Take note of any momentous occasions, such as anniversaries and birthdays.

You should incorporate quarterly touch points into your CRM strategy, at a minimum. This way, the client comes to expect your call, and you become a fixture in their lives (even if it’s in a small way). The idea here is to always be the first name that comes to mind when they think about real estate.

“Consistency is one of the big seeds. Follow up, follow through and follow back,” says Northrop. “Fall in love with your clients and have the confidence to share market knowledge with them.”

Have conversations. Don’t just spew out facts you’ve learned along the way, whether related to real estate or to your client’s life. You want to really connect and leave an impression. What better way to do that than to allow your clients to relate with you?
Just be human. Show them that you’ve experienced similar things and provide guidance or support when appropriate.

Of course, you’ll want to keep a record of the conversations within your sphere of influence so you can more easily reference personal information during future communications.

“Being organized is the first key—have all the data in one place,” says Gusty Gulas, leader of the Gusty Gulas Group at eXp Realty. “I highly encourage rating each person in your database into three categories: A, B and C. Touch base with your As monthly, Bs every quarter and Cs every six months.”

Be around. You should be a constant presence in your clients’ lives. This doesn’t mean barraging them with calls and emails on a daily or weekly basis, but a few touch points throughout the year can really reinforce your relationship.

“It is so important for a successful agent to develop a referral strategy with their past clients,” says David Serle, broker/owner of RE/MAX Services. “Our strategy is modeled after Buffini & Co. principles and includes putting together our Top 100.”

“Once we have done that, we track and contact those every 21 days whether by phone/text, pop by or handwritten card,” he adds. “It’s always important to ask for the referral each time just so they remember that you are in the real estate business.”

Invite them to community events or client appreciation gatherings, and if you have anything like movie or concert tickets to give away, use that as a reason to reach out to a past client and give back.

“Agents that do 90%-plus in repeat business and referrals achieve that by executing a consistent relationship marketing strategy,” says Sherri Johnson, founder of Sherri Johnson Coaching & Consulting. “They keep the door open for referrals by communicating with their base at least twice per month, calling at least quarterly and hosting periodic VIP events, including at least one large client appreciation event per year.”

You can also use holidays to your advantage through contests and giveaways that will allow your sphere to engage and have fun. Build memories not sales pitches, and be sure to let your clients know that you appreciate them.

According to a survey by Ask Your Target Market, 91% of respondents said they are more likely to do business with companies that appreciate their customers. However, only 62% said that businesses they’ve dealt with have done a good job of showing customer appreciation.

“Studies show that repeat clients and referrals are way more fun to work with, need less validation, and cost less to retain as clients,” says Darryl Davis, real estate coach and CEO of Darryl Davis Seminars. “If what you want is to create long-term success in this business, take care of the VIPs (they all are VIPS) in your sphere and farm. In turn, they’ll take care of you.”

Getting through the transaction part is easy. The tricky part is continuing to develop the relationship when you’re not working together. Trust me—with some commitment, it all pays off in the end. Ask any top-producing agent!

Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to lizd@rismedia.com.