Chances are pretty good that at least some of your clients do send you referrals. But, why don’t more clients send you referrals?
If you’ve been working as a real estate agent for very long at all, you know that one of the biggest challenges is getting new business. It can be difficult to know where to focus your efforts. Should you be spending your time and money on creating content and building your online presence? Is there still a place for traditional marketing? Do social media ads bring in quality leads?
All of these avenues can play a role in building your client base, but don’t forget one of your most valuable sources of new clients: your existing clients. Referrals, recommendations and word-of-mouth make up a large portion of most real estate agents’ business. But even though a lot of your business might come from referrals, only a small portion, about twenty percent of your clients are sending you those referrals. Why is that?
Why are referrals important?
Here’s a quick reminder of just a few of the many reasons why referrals are so important:
- New business that comes from customer referrals has a higher success rate, and results in larger sales than business from other sources.
- Referrals are a relatively cheap way to get new business.
- People trust recommendations from friends or family more any other way they learn about a business or product.
- About 80% of people would recommend a product or service they like, but only about 30% do. That’s a huge untapped source of business.
Basically, if you’re not focusing on referrals as a main source of business, you’re missing out on a huge opportunity.
Why Don’t Clients Send You Referrals?
Let’s assume you’re on board with focusing on referrals. And maybe you’ve been aware of the importance of referrals for awhile. But, if you’re like the average realtor, only about 20% of your clients are sending you referrals. What about the rest of them? Why don’t more clients send you referrals?
You didn’t provide high quality service. Providing high quality service isn’t enough to guarantee a recommendation, but think of it as a prerequisite. If you’re not providing high quality service, you can spend endless time and money on boosting recommendations and referrals without seeing any results. Get this squared away before you move on to other issues.
They don’t remember you. If you provided exceptional service, your customers will remember you… for a little while. But two, three, or five years down the road, they may not immediately think of you when a friend is looking for a realtor. Ideally, you want your clients to associate you so strongly with real estate that when they hear about someone selling or buying a house, they jump in with, “I know a great agent!” Make sure they do by staying in touch on a regular basis, sending small gifts or notes for major occasions, and providing ongoing useful content via newsletters.
You didn’t ask. This is a big one. If you’ve provided great service, most of your clients would be happy to recommend you. But they might not even realize that’s a big part of your business. Plenty of clients have no idea how the business of real estate operates, so it might not even occur to them to refer business to you. They might even think you’re too busy for more business. One way to make it crystal clear is simply to ask. Don’t be aggressive or pushy, but make sure they know that you’d love to help out any friends or family members who need real estate assistance.
You didn’t acknowledge a past referral. People want to feel appreciated. If one of your clients gives you a glowing recommendation, and they never hear anything from you, they are unlikely to do it again. Make sure you convey your sincere gratitude not only for the referral and the business, but for their faith in you. A small gift along with a thank you note is a great way to let them know how grateful you are that they would recommend your services.
Providing great service is necessary for getting referrals, but it isn’t enough on its own. Your satisfied clients are most likely happy to give you referrals, but you have to give them a reason to.
If you’re interested in simple, smart, customized gifts as part of your referral strategy, check out Eva.