Prospecting is vital. You must prospect every day. But if cold-calling and cold-knocking are your only ways into finding new listings and new buyers, you’re going to burn yourself out – and fast.
Eventually, you want to get to the point where most of your calls are to people who already know your name, what you do and what you’re calling about. That’s the Promised Land for a real estate agent, and there are two paths to it: effective marketing and referrals.
Here are five steps you can use to get more referrals.
1. Identify Quality Referrals
First, let’s define our terms: What is a referral? It’s more than someone you know saying “You should call this guy.” To be worthy of the name, a quality referral should possess as many of these aspects as possible:
- The referral should have respect for and confidence in your contact’s judgment.
- The client is willing to introduce you to the referral on a favorable basis.
- The referrer understands what it is you do and your unique value proposition.
- The referral is financially qualified to begin shopping for a house, or has a house and a reason to be selling soon. Referrals to homeowners with no plans to move or invest in property don’t help you much.
2. Setting Up the Conversation
Want to maximize the referrals you get? Set up the referral conversation on a favorable basis. Don’t get me wrong – you shouldn’t be hesitant about asking for referrals. You may never have the perfect moment to ask, and if you let the conversation get away from you, you may never get the chance.
But when you have time, before you pop the referral question, you want to accomplish the following:
Ensure Your Client Is Satisfied
This is an essential prequalification before getting referrals. Of course, if your client is dissatisfied in some way, he may not actually tell you – unless you ask. If you skip this step and the client isn’t happy, you’ll never get a referral. If you prequalify by asking if he’s satisfied with the service and value you provide, and he’s not happy, you’ll get a chance to correct that before you ask for a referral.
Note: Understand that if you’re really good, people will want to help you, and they’ll want to refer you to their friends and family. If they’re happy, don’t be shy! Give them the chance!
Ensure the Referrer Knows How You Actually Benefitted Them
It’s important to speak in terms of benefits of your service, not features. For example, you can have an ace back office, but it does no good to brag on that if you don’t ensure the client understands that’s the reason the deal went so smoothly, all the paperwork was done on time, and you had a lot of interest in the house all at once, causing buyers to bid against each other – resulting in a higher selling price. That’s the conversation you want to have. Not how great your CRM is and how you have an awesome office manager. Always look at things from your customer’s perspective.
A few phrases to help you do that:
- Hey, be honest: How did I do?
- Did I meet or surpass your expectations?
- Was I able to earn my keep for you?
- What went better than you expected?
How to Turn Relationships Into Real Estate Referrals
Watch this webinar, hosted by “North America’s Most Referred Real Estate Professional,” to learn more strategies for turning your relationships into real estate referrals.
3. Popping the Question
Now, ask the client, flat out: “Hey, would you help me if you could?”
There are a lot of ways to broach the question. Find one that sounds natural for you. However, note that I’m asking a client whom I already know to be satisfied and whom I already know understands how they benefit from working with me to help. I have not mentioned referrals yet. I may not even use the word.
4. Opening the ‘Mental File Cabinet’
Sometimes when you ask for “referrals,” a reflexive wall of resistance comes up. The client can’t help it, it’s instinctive. So instead of asking for “referrals,” I may say something like this:
Who do you know, who’s like you, who really should own a home instead of renting?
The point: I don’t want the client to be overwhelmed by having to pick names out of thousands she may know. I want to narrow it down quickly. I’m helping the client open a mental file cabinet with just a few names in it.
This is a good question to ask couples in their early 30s, who are buying a starter or first upgrade home, because the answer may apply to many of their peers. For older folks, or for wealthier people, I vary the question. Some examples:
- Who do you know, who’s like you, and can make decisions?
- Who do you know, who’s like you, who is a promising real estate investor?
- Who’s the best investor you know, personally?
- Who do you know who has a baby on the way, or just had one?
- Who do you know who’s moving this year?
- Who do you know who may have inherited a house and who would rather have the cash?
- Who’s your neighbor over there?
- Who do you know who’s trying to sell a home by themselves and is having a hard time?
- Who do you know who needs retirement income?
- Who do you know who is looking to buy a house?
- Who do you know who is looking to sell a house?
- Who do you know who recently retired?
- Who do you know who could benefit from [insert whatever you did to benefit your contact]?
Again, adjust these questions based on your market, your niche and expertise, and of course, your contact’s peer group.
Just get names at this point. “Great! Who else? … Great! Who else?”
Smile big-time, nod, make good eye contact, and use body language to encourage a favorable response.
5. Narrowing It Down
Eventually, your contact will run out of names. At that point, you can open up another mental file cabinet with one of the above questions, or you can begin closing things out:
Of all these people, Mr. Client, who are the two or three people who would benefit the most out of doing what we just did?
He’ll tell you.
Great! Now, which one should definitely be the first one to call me?
Got that? I said, “Call me.” Many clients don’t want salespeople calling their friends, and they’ll hit the brakes at that point if you’re not careful. “I’ll call them first,” they’ll say. You don’t want that, because you can’t control it. Instead, here’s what you want:
You like this guy? I mean, you respect this person and his judgment? I try not to work with jerks!
“Oh, yes, he’s my buddy!” Mr. Client responds.
Great! Can I take the both of you for a cup of coffee? Would you be willing to tell him what we did today and how it helped you? I’m buying!
Let’s give him a call and set it up!
Let’s do it! (This is my personal favorite close.)
At that point, chances are good you have a name to call, and you will also have:
- A personal introduction from a satisfied client or contact
- A face-to-face meeting with a good half-hour to ‘talk turkey’
- A specific course to talk about how you helped the first contact and how you may be able to help the referral
This is many times better than walking away with five names and numbers to call who don’t know you from Adam. And don’t forget – when you use this method, you will still have those five names, anyway!
Get out there and mix it up. Good things will happen!