Monday, 26 February 2018
DroneView Packages
This Old House - Do-it-Yourself

Referrals Start with Relationships, and Technology Can Help

Written by Posted On Monday, 24 October 2016 21:52
Referrals Start with Relationships, and Technology Can Help Photo courtesy Dr. Wendy Longo via Creative Commons lincense

Word-of-mouth referrals are the most effective way to grow a real estate business. But there is huge potential that goes untapped when relationships are allowed to go stale. Technology can help.


By Baker Nanduru


Since the real estate profession began, real estate professionals have understood the value of building networks of relationships to generate “word-of-mouth” referrals. It is the lifeblood of most agents’ new business leads.


And with good reason. According to one Nielsen report, a full 84% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products and services—which makes personal recommendations more effective than almost any other kind of marketing. When it comes to real estate, 86% of real estate clients say they would use their agent again and recommend their agent to others.


But here’s the kicker: According to a LearnMarketing study, only 20% of past clients send their agents leads!


If word of mouth is so lucrative, why aren’t more satisfied clients sending referrals? Is the profession doing something wrong?

The Challenge in Word of Mouth

Yes and no. If you were to look at most of the advice given in professional publications (including this one), the tips are solid: Send a thank-you note. Ask for the referrals. Give incentives. Follow up with all referrals. And so on.


The challenge that many real estate professionals face, however, is keeping in contact with people when there is not an immediate need to buy or sell. According to independent research my company has done, we’ve estimated that agents are only engaging with past clients and prospects about 10% to 15% of the time.


This needs to turn around if agents and other professionals want to stay “top of mind” so that, when an opportunity does present itself, happy clients will make the connection and remember to make the referral. But staying top of mind has to be done carefully, without badgering one’s existing client list. And even if an agent is successful at doing that, he or she will likely find the process time-consuming.


Ironically, technology may go a long way in overcoming these challenges.

Technology for Word of Mouth

Word-of-mouth recommendations, and the relationships that support them, seem to be the epitome of human business interactions. They require all the friendliness and communication skills of a flesh-and-blood person—right?


The answer would be an unqualified “yes” if we were talking about a dozen or so past clients. But after some time in the profession, there are likely more—many more—potential hundreds. Figuring out ways to foster hundreds of relationships without spending your entire day doing it is exactly the kind of “problem of scale” that technology is good at fixing.


For example, more and more professionals are using:

  • Customer Relationship Management (CRM) software. This allows professionals to keep a database of client information and record notes from calls and meetings.

  • Social media. Social media is becoming the next telephone system, connecting virtually any two people. Real estate professionals are learning how not just to broadcast, but to engage.

  • Marketing Automation (MA) software. Although word-of-mouth marketing is a highly personal affair, some professionals are finding that the automated reminders that are built into MA software are often helpful for keeping contact.

  • “Second gen” client engagement software. The newest generation of client-focused software combines the database prowess of CRMs, the automation of MA software, and the added twist of recommendation engines for suggesting ways to surprise and delight clients. For example, some software can recommend interactions—gifts to send, books and restaurants to recommend, news stories and jokes to share—based on information about clients. The idea is to automate outreach so that busy professionals can make regular contact with clients, even when that client list is large. (Cards on the table: The author is founder of a company that makes such software, for exactly these kinds of applications.)

One, some, or all of these technologies can help automate parts of a fully formed “client outreach and referral” program. Of course, the question is which combination of technologies will give professionals the best return on their investment, in terms of both time and money. Anyone starting a new referral program should do their due diligence when considering using a new tool.

Technology has truly changed the role of the real estate professional: Less tour guide and real-estate encyclopedia, more friend and confidant. It’s time to fully appreciate all the implications of this.


About the Author:

Baker Nanduru is founder and CEO of Delighterr Inc, a next-gen client engagement software company. When not working, Baker enjoys running and spending time with his two young daughters. You can follow him on twiiter via @pnanduru.


Rate this item
(0 votes)
Baker Nanduru

I am CEO of, a next-gen client engagement tool. 

I got into this line of work because so many US service firms (especially real estate professionals) depend on deeper client relationships to succeed in a highly competitive service market. But surprisingly, less than 10% of real estate companies are doing anything that could be called "deep, meaningful engagement."

What's worse, current client engagement tools are inadequate. The process is time consuming, impersonal and boring. Client engagement will get harder in the next decade as firms have more shallow business connections that are diverse and dispersed.

I hope that I can make that task a little easier for all my Real Estate friends!

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.