If you made a list of all of your buyer and seller ends for the last year and identified exactly where the lead originated, you would most likely find that more than half of your sales were from referrals from people you know.
If you did not know where your leads came from then you probably have not developed strategies to sustain the leads and generate more from leads from people you know.
What is the secret to getting more referrals and leads from people you know? You need to stay top of mind when they think of buying or selling or when they have referrals they could give you. And you are going to have to work hard to keep them thinking about you.
Most real estate agents seem to be more comfortable working cold leads that come in through newspaper ads, listings, open houses or from their website. They know that people are referring to them and fall into a false sense of security that people will continue to refer clients to them without having to nurture the relationship.
I also know that many real estate agents feel like contacting people they know and asking for referrals is like begging, but it is not. Every business needs customers to grow. Every past client, friend and family member feel great when they can help out you and their friend by referring them you. A good referral is a positive reflection on the people you know. And it is a two way street. You can help build their business by referring people to them that need their product or service or trades that you trust.
Staying Top of Mind
There are a number of ways to stay top of mind:
- Handwritten notes
- Email newsletters
- Mailed newsletters
- Personal letters
- Client appreciation events
- Coffee and lunch meetings
- Phone calls
How to Get Started
The first place to start is analyzing your database:
- How many people are in my sphere of influence?
- What percentage of my business currently comes from it?
- Have I added every single person who knows me and what I do?
- Do I have complete contact information for all of them?
- Do I have a systematic plan to market to them?
- How often do I call them?
- Are my scripts effective?
- Am I asking directly for referrals?
- Do I have an AAA list and what do I do for them that is special?
- What is my mindset towards this group?
- If I really worked it how much additional business could I extract?
- Are my vendors, trades and affiliates on the list?
Build a Culture of Referrals
- Start asking for referrals from everyone in your sphere and you meet
- Deliver outstanding service so that they will be delighted to send referrals
- On closing a sale try to add your client’ssphere into your system
- Every day, think “Who do I know today that I can help?”
- Ask your vendors, trades and affiliates if they know anyone buying or selling
- Refer as many people as you can to your sphere of influence
Call Your Contacts with Something of Value
You should prepare yourself with a script and be well prepared with something of value to give. Make your topic both timely and interesting. Think about themes that your contacts would like to know about. A good suggestion is to provide a quarterly market update.
- What do you know of value that they don’t?
- Market updates
- Changes in interest rates
- Investment opportunities
- Move-up opportunities
- Industry news that might affect them
When You Call
Be very sensitive to their time. When you call people you know, but are not friends with, you are intruding on their time and you want to be brief. Don’t spend a lot of time on idle chit-chat. Get to point of why you are reaching out to them for quickly.
Example of a Conversation Flow
“Hi John. This is Mike at Limelight Real Estate. I know it’s been a long time since we were able to speak- how are you?”
“Great! How are the kids?”
(Try and find a connection related to them like their new job, ask about renovations on their house or if they have any future plans needing a referral to a trade or resource you know.)
“I know you’re very busy, so the reason I wanted to connect with you is to provide you with a quick market update. But before I do, I wanted to ask if you have any questions for me- anything at all you’d like to know about the real estate market…”
“I did an analysis of homes in your area and the average price is up 12% over last year and homes are selling on average in 24 days at 99.3% of asking price so your neighbourhood is definitely a seller’s market. If you were to list your house for sale today I think it would sell for about $1.4 million.”
“One more question if I could, is there anyone that you can think of that I could assist – someone that may have questions, need advice, or may be thinking about buying or selling that I should reach out to? Also have you ever thought of investing in a condo to rent out?”
“John, thank you for thinking about this for me, now if you’re ok with it, would it be alright if I added you to my email list to receive a quarterly market update?”
“Great. I’d just like to confirm your email address and if I have important information to send out, I’ll send it to this address.”
After the phone call, send a handwritten note thanking them and enclose a couple of business cards. If you have a market update you can enclose that, or another item of value that would add to the connection.
Now you are ready to get more referrals from people you know.