EARNING THE "NEXT" REFERRAL

It's an outstanding feeling when someone in your sphere of influence refers your services to a friend, family member or co-worker.  It's proof that your hard work, excellent customer service and relationship marketing are paying off.  But getting the first referral is just one step in the process of long-term success.  Here are a few additional steps you should take to ensure you continue to receive "never-ending" referrals...

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CUSTOMERS WHO TRUST MAKE EVERY TRANSACTION EASIER

Like most professions, real estate agents spend a disproportionate amount of time helping a small percentage of “problem” customers.  Problem customers question your pricing or offer strategy, your neighborhood expertise, your recommendations for lenders.  They search out conflicting information on the Internet and want you to justify every decision or piece of advice you offer.  No matter the number of designations after your name or award logos on your business card, they simply don’t trust you and that makes every aspect of the transaction more difficult and more time consuming.  The simplest way to ensure you start your customer relationship with a sufficient level of trust is to work by referral.

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GIVE AND TAKE STARTS WITH "GIVE." GET THE CYCLE STARTED!

The foundation of relationship marketing is that there is a difference between a “transaction” and a “relationship.”  You may be very good at the transactional part of the relationship, but your customer PAID you to complete the transaction and therefore feels no more obligations to you.  But for long-term success you need that customer to feel an obligation.  You want her to feel that what she paid you wasn’t quite enough for the service she received.  If you give some value beyond the transaction, that’s what leads to reciprocity in the form of referrals.

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GO A STEP BEYOND COMMUNICATION AN APPRECIATION AND ENGAGE YOUR CUSTOMERS

The word "engage" has multiple meanings, but each of them is tied to the other in a way that makes is a powerful set of instructions for exactly what type of interaction you should be having with your customers if you want to build lifetime loyalty and endless referrals.

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THE RIGHT KIND OF SPHERE WILL HELP YOU SOAR!

Pretty much every real estate agent has been told at some time or another that their sphere of influence is too small.  There are thousands of articles out there giving you advice on the various people you can add to your database to increase your sphere (there's at least one on this website). But where are all the articles telling you that your sphere shouldn't just be BIGGER, it should be BETTER?

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MOVER TRENDS MAKE REFERRAL MARKETING MORE IMPORTANT THAN EVER

Over the last 50 years, the number of people who move each year has steadily declined from 1 in 5 to 1 in 9.  The time between the average person's real estate transactions has become so lengthy that building a real estate business based on repeat purchases is impossible. That's why referral marketing is so important for real estate professionals.

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GIVE YOUR CUSTOMERS THE TOOLS TO PROVIDE REFERRALS

Most customers never give a referral.  Only about 20% of a real estate agent's sphere of influence will ever refer a friend or family member. But why? What's holding them back? It's your job to give them the tools they need not just to mention your name, but to persuade your potential new customer to contact you!

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GIFT GIVING A PROVEN STRATEGY FOR SALES SUCCESS

Intuitively we all know that rewarding our customers with gifts creates positive feelings towards our company or service.  But did you know that there is science to prove it?  Susan Heither, Ph.D. says, "Gratitude is a serotonin booster, so the receiver, feeling grateful for your gift, gets to enjoy the lovely feelings of a serotonin surge."

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GETTING PEOPLE TO LIKE YOU...THE HARDEST PART OF THE REFERRAL CYCLE

You can generate referrals from people who know and trust you.  But people who "like" you will go out of their way to help you succeed. Someone who likes you will actually receive personal enjoyment and satisfaction from sending you a referral, making them more likely to do it.  So what's the trick to being likeable?

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REMOVE THE "REFERRAL RISK"

Referring a family member, co-worker or friend to a real estate agent requires risk on the part of the referrer, especially in a high-dollar business like residential real estate.  They may be risking their reputation or relationship by referring someone to an agent who doesn't deliver on their promises.  Overcoming that risk is the first step to generating referrals.  To remove the risk and become more "referral-worthy" you need to accomplish several things...

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RECURRING REVENUE FOR REALTORS?

Top entrepreneurs around the world are building or reworking their companies to create recurring revenue streams.  Movies, music, software, food, personal hygiene, it doesn't matter the product, these companies know if they can convince a consumer to provide ongoing, regular purchases they have generated predictable income.  On the surface, it seems that real estate sales would be one area that can't benefit from this business model.  But there are ways...

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11 TIPS FOR CREATING TRUST

Creating trust with your sphere is the surest way to remove the referral risk.  Like most important things, trust is built over time, but this article gives you 11 great ideas to build trust and generate frequent referrals.

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EVERY AGENT SHOULD HAVE A WRITTEN "REFERRAL PROMISE."

One of the main barriers to convincing your sphere of influence to refer their friends and family is their fear that the person they refer to you will be dissatisfied.  If you want to build a referral-based business, your goal should be to alleviate this perceived risk and make your sphere more comfortable with making a referral.  Every real estate professional should have a written "Referral Promise" that explains the care and attention you'll give out anyone referred to you.

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DOUBLE YOUR SPHERE, DOUBLE YOUR REFERRALS

Real estate professionals have a common misconception that their sphere of influence can only consist of people they already know and have a relationship with.  But to build a business where you work by referral, your sphere should be made up of people who are most able to help you build your business - respected individuals who have enough esteeem that others follow their advice. Increasing the size and quality of your sphere has a direct and immediate impact on the number of referrals you receive, and you should have a strategy that helps you do it correctly.

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ARE YOU IN A "COMMITTED" RELATIONSHIP?

Some agents have a "fling" with their customers, and others create a long-term committed relationship. Commitment is a key concept in successful relationship marketing.  According to the Journal of Marketing, it's the way to "distinguish social from economic exchange." How do you show commitment to your customers? Three ideas are important: shared values, communication and relationship duration.

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BUY 9 HOUSES AND GET THE 10TH ONE FREE!

Creating a program to build customer loyalty seems like common sense for most companies.  Retaining a current customer's future purchases is a sure way to foster growth.  That's why restaurants offer "punch cards", airlines provide frequent flier miles, credit cards give cash back.  Real estate professionals can learn from these types of programs and adapt them for their own purposes.

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EVEN RELATIONSHIP MARKETING NEEDS A "CALL TO ACTION" 

If you’re not receiving enough referrals from your relationship marketing it may be that you are more focused on the relationship than you are on the marketing.  Relationship marketing for real estate professionals is not the same as it is for a restaurant or retailer.  Customer loyalty and repeat business are not enough in an industry where the average buyer makes only 1 or 2 purchases in a lifetime.  To be successful, you need your customers to actively promote your services to generate referrals for you.

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ABILITY VS. LIKEABILITY

For real estate professionals, your training, education, experience and ability are key factors in convincing a home buyer or seller to purchase your services.   But they are not the ONLY factors.  In fact, they may not even be the biggest factors.  Most real estate agents have a plan to continue to enhance their abilities.  But do you have a plan to increase your "likeability?"

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THERE'S A BIG DIFFERENCE BETWEEN CUSTOMERS AND FRIENDS 

There is a reason we named our company"From Your Friends."  The concept behind our relationship marketing program has always been that the best way to ensure customer loyalty and build repeat business and referrals is to go beyond the vendor relationship and turn your customers into friends.  Why?  Because there is a big difference between customers and friends.  Customers are fickle and have minimal loyalty.  Friends, on the other hand, actively want to help you succeed.  So how do you turn a customer into a friend?

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