We all want
an office in which the phone rings continually with offers of referral
business. Does having this type of office sound like a dream? It need
not be such a far fetched reality, though it requires diligent work with
clients. There are a few key steps to creating a great referral business.The
first step is to provide a high level of service in the first place.
If the service is not exceptional, no referrals will be forth coming.
One of the crucial factors in customer satisfaction is communication.
When our client feels we have communicated with them clearly and regularly
their level of satisfaction goes up. Clients can overlook other errors
at times but lack of communication is rarely forgiven.
Another factor is
to select the right person initially. There are people we can
do business with who will never be satisfied. These people
genuinely distrust everyone and everything. They are looking
for problems that do not even exist. For example, I recently
sold a listing I had obtained after another agent’s listing
contract had expired. I went out, listed the home, and my buyers'
agent sold it within 30 days at full price. We had a long escrow
period and it closed on time. The seller received 19 days of
free rent back. It was a perfect deal for her! The day before
closing the seller then called me because she thought I had
not earned my commission. She said I had not done enough ads
or open houses. The key was she never was going to be happy.
I made a mistake when I selected her as a client. I was paid
well, but referrals are not forth coming from her. The truth
is I would not want them because I am sure most of her friends
are just like her. (People tend to enjoy spending time with
people similar to themselves.) I am not interested in having
clients similar to her because they will never be satisfied.
Another step toward
obtaining referrals is to ask for them. There is no substitute
for actually prospecting for referrals. To pick up the phone
and communicate with your past clients is crucial. If you send
out a pieces of mail, you will get a 3% to 5% return. If you
make phone calls to all the people who received the mailing,
you will get a 12% to 15% return. That is an extra 9% to 10%
return from the same piece of mail. Who would not like to do
another ten transactions from the same mailing? If your average
commission check is $3,000, you will earn an extra $30,000
from the same piece of mail by just making a few extra calls.
Most agents mail,
mail, and mail. They never pick up the phone to make the call.
If you want to do a better job, you can track the effectiveness
of your mailings by calling your clients. You can also get
feedback of what kind of information in your mailings would
be helpful to them. Your clients want to hear from you. If
you provide quality service, they also want to help you be
successful. If you did a good job for them they will want you
to do a good job for their friends.
Do not forget to ask
your current clients. The people you are currently working
with can be your best referral sources. They are telling everyone
they meet that they are either buying or selling. Their whole
conversations revolve around their current activity in real
estate. You want to hit them early on when their excitement
is high. Do not wait; get the referral now. Your sellers are
going to be on a high the first few weeks on the market. They
may never again be so high on you. Enlist them into your referral
army to find new clients. Convince them that finding new clients
will help you sell their home because it will. If you have
more signs, you will get more calls. More calls mean more leads,
more leads equal more buyers, and having more buyers will give
you a better chance to sell their home. Send them out to do
reconnaissance in the bushes to find you buyers and sellers.
They will be more apt to do this in the first few weeks of
your listing than at any other time.
Your buyers are excited
and talking to everyone about the home they want, especially
if they are a first time home buyer. Do not miss the chance
to tap into all their other friends who are first time home
buyers. If they tell you about a few friends and one of them
buys, you will get the others to follow quickly. They do not
want to be left out or the last of their group to buy.
Lastly, understand
you must to consistently contact your past clients in order
to achieve success in referrals. Creating a program that helps
keep you in constant contact with your past clients will yield
the best results. You will receive a good 80% of your referrals
from 20% of your past clients. You will have a small force
of specialists who will do the bulk of the reconnaissance work.
Reward them and praise them for their efforts. You will need
to create a program to contact these people more frequently.
The more you keep in front of these people; the more business
they will create for you. You will need to contact these people
at least monthly. To achieve the greatest results, you personally
must make the calls or the visit in person.
Make sure to track
effectively who is sending you the business. You need to know
on which people to spend the most time, energy, effort, and
dollars. You might be surprised who is your leading salesperson
in the field. By tracking you can accurately reward the "top
producer" of referrals. You could even have a contest
and create a recognition reward for the most valuable past
client, a MVPC award. People love recognition from others.
If done right you could create a feeding frenzy of past client
referrals.
Personal contact is
the key. You need to personally call your client base with
regularity. Do not miss the opportunity to increase the level
of your referrals by 10% with a few calls. Calling past clients
also might make your day, because they will often say how thankful
they are for your good service.
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