Get more referrals!

It takes a plan and hard work to yield results.

by Doug McPherson  Here’s a misconception that can shrink your annual income: Just do a good job, and the referrals will come.

Not so, say the pros. It takes work. It takes sweat. And it takes peers–not your fellow REALTORS®, but your clients. You already work at earning the trust of your clients; also get to know them as friends.

"No one is ever going to refer you if they don’t know you," says Brian Kennedy, chairman of the board of directors for Sales and Marketing Executives in Dallas. "It’s just that simple. Think about it–would you refer a plumber you didn’t know to a friend?"

You want your clients to use words like familiarity, friendship, and confidence when talking to people about your services. All those words form the rock-solid foundation of a strong referral base that can withstand the stormy ups and downs of real estate.

Developing those relationships takes work. Just doing the job the way it’s supposed to be done won’t cut it in these days of fierce competition. Doing the job right is a given and not a guarantee that you’ll get referrals.

Pick the right people

Marketing experts say you can save a lot of time by focusing your efforts on the right people. Emanuel Rosen, author of The Anatomy of Buzz, a book about how to build word-of-mouth marketing, says, quite simply, people talk–they are programmed to talk. They talk for many reasons: to connect, to share news, to make sense of the world, to reduce risk.

Of course, you want them to talk about you. One of the best ways to inject your real estate services into conversations is to identify certain people among your clients whom Rosen calls "network hubs." These are the trendsetters who are among the first to buy or try something and then take pride in being a source of information about it for others later.

Social scientists call them opinion leaders; marketing professors call them early adopters. No matter what you call them, paying attention to these people can create a tidal wave of information about you and your services.

These hubs may not wear signs on their heads saying they’re opinion leaders, but many of them share common characteristics that make them easier to identify. According to Rosen, they tend to be travelers, information-starved, vocal, and media junkies. And because they’re early adopters, you’ll probably find them dressed in the latest clothing styles surrounded by the newest gadgets.

Once you find these people, put in extra time with them to develop a solid relationship.

"Hang out where they hang out," says Kennedy. "Join the same clubs, go to the same places, get near them and explain how you can help them and their associates."

Ask the question

Mary Harker, a REALTOR® with Keller Williams Realty in Dallas, agrees with targeting the right people and getting in a relationship with them. She recommends focusing on your top customers, the people who have "raved about your professionalism and service" in the past.

"Invite them to a sports event, parties, movies, dinners, picnics," says Harker. "Spend time with them. Send them a Starbucks or McDonald’s coupon."

Talk to them and find out what it was exactly that made them enjoy you and your service. And keep them as friends.

Harker tells a story about a time when she got a call to list a home. The caller, a builder and former client, asked if she wanted to know why he called her instead of all the other agents he knew. Harker told him she thought that perhaps it was because she had done a good job for him in the past. (Two years before, she sold one of his $200,000 homes.)

The builder confirmed that she had done a fine job, but that wasn’t the main reason he called her. After Harker had closed on that home, she mailed the builder a card letting him know that she had made a donation in his name to the Children’s Miracle Network. The gift was both timely and thoughtful: The builder’s seven-year-old daughter had just undergone open-heart surgery. He was overwhelmed.

And he chose Harker for his latest build job worth $1,750,000.

"We continue to give a portion of each commission to our favorite charity in our customer’s honor," says Harker.

Talk up your services

Denny and Ann Bishop are brokers in Wichita Falls who’ve built a large referral base. Denny says agents who aren’t getting referrals sometimes simply fail to talk about their services.

"Occasionally, REALTORS® fall down in making their customers aware of all they can do-–all their services," he says. "Let people know you can help their friends who live in other areas or states."

That’s a point Kennedy can illustrate personally. Despite buying and selling 13 homes as a consumer, "I never had a REALTOR® ask me for referrals–not once."

Kennedy recommends developing a personal feedback form you can give to each client. The form should include some basic questions about what they liked and didn’t like and then have a question that says point-blank: Would you refer me to others? If so, please list their names and phone numbers or e-mail addresses.

"Don’t mess around. Ask for the business," Kennedy says.

Fees for referrals

One way to get referrals is to give incentives for them. It sounds simple enough, but the idea of paying for or giving gifts for referrals can be anything but simple. Texas law says REALTORS® can’t give gifts worth more than $50 to consumers who share referrals. But should you give anything for referrals you receive?

Rosen strongly advises that you test ahead of time any new fee-for-referrals program. "There are many attitudes among customers on incentives," he says.

Research says some customers gladly spread the word about good service simply because of the quality of service and not because of an incentive. Others recommend asking customers individually how they feel about getting some sort of gift or fee. And still others say to offer a list of possible incentives: cookies, cash, movie tickets, gift certificates, etc.

Regardless of your decision, Rosen says, "The incentive should not be the main motivation for the referral."

Service with a style

In a sea of mediocre service, your extra effort can stand out like a massive ocean liner. When you’re about to wrap up a closing, ask yourself what else you can do for your clients that will make their experience even better. Adding that little extra favor can mean the difference between future referrals and just standing faceless in the crowd.

"Give them more than they expect. They’ll remember that," Harker says. "And that’s a large key to creating word of mouth."

That’s something Ann Bishop has relied on for 20 years. And now businesses call her and her husband, Denny, with referrals regularly.

"It sure beats knocking on doors," Bishop says. But that’s exactly what she did when she first started in the business in the early 1980s. "It takes a lot of work at first. Referrals don’t come without work."

The Bishops left a national real estate firm in the mid-nineties to start their own real estate company. Both were worried they’d lose referrals because of the move.

"We actually have gotten more referrals since going out on our own," says Denny Bishop. "The lesson I learned is that national companies don’t necessarily have the advantage when it comes to referrals. It’s about people, and it’s about the service the REALTOR® provides."

Moving into the relo market

The Bishops have focused much of their marketing efforts on professionals in the relocation industry, such as human-resource managers and corporate recruiters.

"We spend a lot of time and effort with these people, and sometimes it doesn’t work out. They may go with someone else, and we’re OK with that, because it’s the opportunity you want," says Denny Bishop. "Don’t burn a bridge if something doesn’t go your way."

He says it’s important to give relocation contacts priority and to be available when they need you. "Give them prompt attention and take care of them quickly."

And the Bishops don’t do the "wining and dining" thing. "We’re active in the community and they see our contacts out at various events–an art exhibit opening, a hockey game–but we rarely take people out to eat.

"You have to create credibility, integrity, and professionalism, and that will help the customer think of you when they think of real estate."

Building buzz

Rosen says getting word-of-mouth started can be painfully slow, so you have to kick start it. What can you do to create a fire that sparks more buzz about your services?

• Diversify your networks. Talking with people from different social circles will expand your reach.
• Have your customers interact. Bring customers and prospects together at fun events and forums. By doing so, you’ll create an environment where they can exchange information.
• Work with network hubs. Some people in a community are more influential than others. Identify these individuals and work with them on spreading the word about your services.
• Make it easy. Whether it’s a brochure that people are encouraged to pass on to friends or a Tell a friend button on your Web site, make it easy to spread the word about you.

In addition, Rosen says your ads can help generate buzz. Ask yourself these questions to determine if your ads are ripe for generating referrals:

• Do your ads help people better understand what is unique about you? If people can’t explain what’s new or special, that means they won’t be able to tell their friends.
• If you’re using testimonials in your ads, are they credible? Check with your customers to ensure their opinions are the same as yours.
• Do your ads help your customers? For example, do they give customers information that reinforces their reasons for using you?
• Can your ads themselves be clever enough to create buzz? Think of milk mustaches or the catch phrase, "Where’s the beef?"

It’s a lot of work to get referrals and keep them coming. Creating familiarity, friendship, and confidence isn’t easy, and neither is developing and nurturing those relationships. But as balance of your business shifts from chasing customers to having them come to you, you will find that all the effort was worth it.

Doug McPherson is former editor of the Colorado REALTOR® News. He currently owns his own freelance writing and editing business in Centennial, Colorado. You can reach him at wordpub@aol.com.

Photo © Corbis.

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