Four secrets to better referral building

For many Realtors®, a solid referral system is a critical part of doing business. According to the 2013 National Association of Realtors® Member Profile, referral business accounts for a median 21 percent of activity for NAR members – a number that can actually reach much higher for agents who develop structured referral building programs.

“Referral and repeat clients are your least expensive buyer and seller leaders,” says real estate coach and consultant Walter Sanford. “Generating a lead from scratch takes more effort, time, and money than the ‘greased slide’ from a happy past client, family member, co-worker, or friend. The acquisition of good leads is the number one differentiator between great agents with great nets and the rest.”

Sanford, who has been coaching for more than 30 years in the industry, has authored 12 systems and book on checklists, pro-active lead generation, and affiliate lead generation.

He offers these strategies to Realtors® to improve their referral systems:

1. Measure the success of your current referral system – Agents can measure the success by tracing the source of their commission dollars, says Sanford. “Prompted by their closing checklist, each of my coaching clients writes down their net commission in a spreadsheet under a column titled ‘Sphere Database System.’ Whether it was a past client, sphere, or referral, the database would get the credit.”
2. Take the first step – “Determine who should go into your database – past clients, family, friends, family of friends, friends of family, non-agent co-workers, out-of-area agents, people with whom you spend money, internet leads with whom you’ve spoken, etc,” recommends Sanford. “Next, gather their pertinent details: correct spelling of name; mailing and address; all phone numbers; all email addresses; preferred contact method; their haves and wants; contact history; and personal dates like birthdays, wedding anniversaries, and anniversary of purchase or sale.”
3. Strategies that actually produce results – Sanford said, “A multi-media system needs to be set up for contact, solicitation, and delivery of value. For example, email every new listing before it hits the MLS as a secret listing that should be forwarded to an interested party in databased client’s lead.”
4. Improve prior strategies – “Only people that know who you are should be in your database; otherwise, you are wasting resources.  Besides adding ‘bulk’ leads instead of quality leads to the database, agents just don’t do the above activities or do them sporadically,” said Sanford. “Agents need to stop sending material that says they are ‘the best,’” he added. “Send value-like information on self-directed IRAs, invitations to sign up for listing comp services on your IDX, and other unique value propositions.”

Sanford concluded, “The real estate industry always has been relationship-driven. Whether you are a mortgage originator, real estate agent, attorney or appraiser, building relationships is what makes your business thrive. If you concentrate on these simple steps, you should build lasting and fruitful relationships with your referral partners.”