Everyone knows that referrals are great - it is always better to have business come to you instead of having to chase after it. It's easier, less expensive, and you enjoy a built in level of rapport with the clients that are referred to you.

Unfortunately, most agents don't get anywhere near the amount of quality referrals that they could be enjoying.

Why not?

Some lack the critical foundational element for referral success, which is incredible, high quality customer service. Without it, an agent will never have success getting referrals.

Most agents, however, simply don't have a specific plan for getting more referrals.

Here are seven steps that are proven to create a steady stream of referrals.

Create Your Database

This first step, while time consuming, will pay you handsome dividends down the road. Equip yourself with a decent computer, and contact management software (most all real estate specific software programs have capable contact managers built-in.)

Set aside some time when you wont be distracted, and put together as many names as possible. Think of all the people you know through the various groups and activities you're involved in, as well as all of the people you do business with. Ask your family and other people close to you for help - they may remember people that you omit. It often seems difficult, but once you get going your mind will get on a roll.

List all of their normal contact information, as well as other info such as occupation, birthday, anniversary, kids names, hobbies, etc. if possible.

Constantly Increase the Size and Quality of Your Network

Make a constant daily effort to add quality members to your network. Every person you meet is a potential source of referrals. A member's quality is determined in large part by their ability and willingness to send business to you. Some people are in a position to refer you more clients because of their occupation or other relationships. Divorce/probate attorneys, financial planners, CPA's, and new home site agents are a few examples.

Communicate Frequently and Provide Value

Once you have your network set up, you need to communicate with them on a consistent basis. A combination of mail/e-mail and phone calls 10 - 20 times per year has proven to provide the best results.

Most importantly, you must provide value to your network. The bottom line is that people really only care about things that will benefit them in some way. Send your network things that are important and interesting to them, not just a bunch of sales hype about how great you are!

When you provide value, you will unleash the principle of reciprocity. This powerful law of human nature simply states that when you do or give something of value to someone else (like helpful information, etc.), they will naturally feel obligated to do something for you in return (like sending referrals).

Obviously, sending a referral to a member of your network (for example a financial planner or accountant) will make them feel obligated to send one back to you.

Constantly Ask for Referrals

One big reason that agents fail to generate referrals is simply that they don't ask! Remember: When you give extraordinary service, you have earned the right to ask for and expect referrals. Studies show that people are more likely to refer business when they are involved in a transaction themselves. The best time to ask for referrals is when positive emotions are high, such as when they sign the listing agreement, an offer on the property, or just after closing.

You will also have more success if you ask in the right way. Part of your dialogue might be "As you may know, the success of my business depends on referrals - and that's where I need your help. Who else do you know that would benefit from my services?"

The key phrase is "I need your help". These words cause people to naturally respond and want to help you.

Cultivate Your A-team

Your A-team is the highest quality members of your network - the ones who have demonstrated their ability and willingness to repeatedly send you referrals. Your goal is to bring as many members as possible up to this higher level.

Treat the members of this exclusive club like gold, and make sure that they know that they are appreciated. Give them special benefits such as tickets/invitations to sports games or special events, unexpected gifts, etc.

Systemize the Entire Process

Building your network and cultivating referrals is an area of your business that lends itself especially well to an automated system. With your computer and contact management software, you can make sure your efforts are always on track and that nobody "slips through the cracks".

If you want to avoid having to duke it out in the streets with all the other agents looking for their next deal and take your business to the next level, start focusing more on referrals. It does take some time, energy, and commitment, but building and cultivating your network will pay handsome dividends. With some nurturing and maintenance, the relationships you create with your network can provide you with a steady supply of clients for years to come!

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Published: February 2, 2000

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