The Referral System That Really Works
THE DIRECT TRANSLATION of the Latin phrase Quid pro quo is ‘something for something’. You can use this to your advantage to to create partnerships with the local community who will be only too happy to promote your business in return for you promoting theirs. Ian Grace explains a tried and true marketing strategy that can help you win new clients.
FROM THOSE WHO are brand new to those who have been in the industry for years, every agent tries a thousand different methods to make themselves known and generate listings.
Let me tell you about something I’ve seen top performers in the industry do, both in Australia and in North America; it’s creating partnerships in your community and getting other businesses to promote you. I’ve seen this work just as well for brand-new agents as it does for those who are established.
Very simply, you put together a list of the better businesses around: restaurants, hairdressing salons, DIY stores and so on. You then approach each one and ask whether, if you recommended their business to your database of customers, they would be prepared to give your clients a discount.
How does this work? Let’s assume your total database of customers is 2,000; of course, some may only have a few hundred while I’ve seen others with as many as 10,000. From experience, I know that if somebody has just had the offer of 2,000 potential customers recommended to their business they will happily offer a discount – normally 10 to 15 per cent is easily achieved.
You then advise your customers that you have organised discounts for them at a large number of businesses – exclusively for them! List these businesses on a page of your website, so you can add to them continuously and your customers can check to see which businesses have been added. Then provide your customers with a VIP discount card.
By doing this, you are also effectively locking in all your existing customers – a great bonus, as every business is always losing customers without knowing it.
You then provide point-of-sale material at each business stating ‘XYZ real estate company discount card welcome here’. The news spreads among their friends and prompts enquiries from other customers at the till.
This is where the law of averages comes in. A number of those friends and those who just see the point-of-sale material will be in the market to sell, buy, rent or have somebody manage their investment property.
As part of the point-of-sale material you have provided business cards, ideally numbered on the back so you know where the referral has come from and can thank that business accordingly.
It would also pay to set up a reward system for the businesses that refer customers to you; the more rewards they get, the surer you can be that the point-of-sale material will always be displayed prominently. Everybody wins, with the further bonus of creating the perception that you dominate the area, without people putting it down to the number of signboards they see.
When I was doing an advertising training session on the Gold Coast, one of the attendees volunteered, ‘I know exactly what you mean – when we were in Tasmania, one real estate group appeared to be absolutely everywhere: shops, restaurants, you name it!’ As far as they were concerned, that real estate group dominated the entire area; they never once thought about, or mentioned, the number of For Sale signboards they had on display.
One world-beating business in Victoria had at one time around 120 companies promoting them – how powerful is that! The list covered pages and pages on the website, broken down into categories to establish where all the discounts were available for their loyal customers.
Another broker in North America, whom I’ve known now for around 14 years, did the same thing. He has never cold-canvassed, but over a few short years I watched his business go from 250 to 500-plus customer referrals each year. Hardly surprisingly, he is now reputed to be in the top one per cent in North America.
At the start I mentioned brand-new agents. How does this work for them? Some are young and enthusiastic, while others are older, having had a change of career. But they are all starting with nothing and appear to have little to offer by way of a successful track record full of previously satisfied customers.
Far too often these agents fall into the trap of cold canvassing, an absolute no-no in my opinion. With the rejections they get, this strategy does nothing for their self-esteem and quite often they don’t make it in the industry.
However, if they have taken the initiative and their office allows them to refer their client database to selected businesses in their local area (please understand the actual database is never handed over; the businesses and the discounts offered are merely referred to the clients), then even though they are brand-new they now have an important role to fulfil. What’s more, the business owners they talk to will see them as being significant and not just some inexperienced rookie.
The further beauty of this is that as they talk to all these businesses they are not soliciting custom; they are offering customers to the businesses, so there is no pressure and no defensiveness.
And guess what? In the course of their calls to these businesses, they are going to stumble across those owners or managers who just happen to be in the market for real estate in some way – buying, selling, renting or having someone manage their investment property. What a great bonus!