When you work with a client, one of two things must have happened: Either you called them, or they called you. If you're like most agents, and you prefer the latter, your constant goal should be setting up and maintaining a network to generate referral and repeat business.

Here's why:

It Costs Less - Studies show that it is much more expensive and many times harder to go out and find a new client versus getting business from a referral or repeat customer. The more referrals you get, the lower your marketing costs, and the higher your profits.

It's Easier - When you meet with a potential client that was referred to you, you enjoy a built-in endorsement and "common ground" with them. This increased credibility leads to a higher closing ratio.

It Builds Consistency - Your referral network, when set up and worked properly, will give you a consistent, reliable source of income for years to come.

It Grows Like A Snowball Rolling Downhill - With a little diligence and persistence, the business you get referred to you by your network will increase every year like clockwork.

It's More Fun: You will be dealing with people who like and respect you, and as long as you uphold your end of the relationship by always providing outstanding service and value- they'll be loyal to you.

You'll Have a Life: Getting quality clients referred to you by your network means not having to work 70 hours per week or be "on call" around the clock. It allows you to run your operation like a professional, organized, systematized business.

All agents realize that getting referrals and repeat customers beats the heck out of cold prospecting and constantly chasing after the next deal. So why is it that most agents: even those with large networks or "spheres of influence" get very few referrals and repeats on a consistent basis?

There are three parts to the answer:

1. Many agents don't recognize the key foundational element that is crucial to getting referrals, which is INCREDIBLE, OUTSTANDING SERVICE! Not the same service everyone gives, and not service that merely gets the job done, but unforgettable service!

Think about it- if you handle a sale, everything goes smoothly and the deal closes, are the clients going to rush out to tell everyone they know about you and business to you? Probably not.

Why not? Because people today expect good service! Good service is just the starting point. You need to go the extra mile, and make sure that the client's perception is that you did an incredible job!

Perception is critical, because you can give the best service in the world, doing things for your clients that most agents wouldn't even think of - but if the client doesn't realize or isn't aware of all the things you are doing, the client's perception may actually be that you did a lousy job! Remember that reality does not matter. What client's perceive and feel in their own mind is all that is important. Remember, the "product" you sell is NOT houses, but rather the service you provide. It is all about the feeling people get when they do business with you.

It takes extra effort to give truly exceptional service, but the long term pay-off can be huge.

2. Most agents don't communicate enough with their network. They often neglect to contact their network, and then as time goes by they feel more and more uncomfortable about their lack of contact. Finally, out of guilt and embarrassment, they simply abandon contacting them at all. For optimal results, create an organized system that facilitates consistent contact with your network. It is generally accepted that 10-20 contacts per year will get the best results.

3. Very few agents provide any VALUE to their network on a continuous basis. The fact is that people only really care about things that benefit them in some way. The key to providing value to your network is giving them things that are important and interesting to them, and that BENEFIT them! Do not send things that are only important to you, like a big picture of yourself with a worn-out slogan, or a bunch of sales hype about how great you are!

So what do you give them? One of the best things is information! Constantly supply your network with interesting, useful information on topics related to real estate such as property values, interest rates, community events, property taxes, zoning and land use issues, etc. Of course, steer clear of controversial subjects like religion and politics! When you provide value and benefits to your network, they will feel naturally obligated to do something for you in return.

When you give exceptional service, and follow it up by consistently communicating and providing ongoing value, your referrals and repeat business will increase dramatically. True success requires you to abandon the "single transaction" mentality and focus on the lifetime value of each customer. The closing should not be the end, but instead the beginning of the relationship- a relationship that when properly nurtured can provide you with a dependable, consistent income stream for years to come!

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Published: October 26, 1999

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