4 Rules for Building a World-Class Referral Network
TIM FERRISS IS AN ENTREPRENEUR, angel investor and author of the New York Times bestseller The 4-Hour Work Week. Kylie Davis applies his rules to the real estate industry, based on the findings of CoreLogic’s recent survey on Consumer Perceptions.
I HEARD TIM FERRISS speak at AREC 15 and I have to confess I became a bit of a fangirl. As a result, I’ve been listening to his podcasts and have been struck by how valuable his advice is, not just for those in the tech start-up space but specifically for real estate agents.
A recent podcast was on ‘How to Build a World-Class Network in Record Time’, in which he gave start-up wannabes quality advice on how to survive and thrive at major conventions. It could just as easily have been entitled ‘How to Build a World- Class Real Estate Referral Network’.
Here are his three simple steps –
- Don’t dismiss people
- Don’t be a dick
- Don’t rush
Ferriss’s words resonated because his seemingly simple advice is backed up for real estate agents by some strong statistical evidence. CoreLogic recently launched the results of a study called Consumer Perceptions of Real Estate Agents, in which we surveyed more than 300 vendors on their experience with their agents when they sold their home.
The key findings of the survey were that, although agents rate themselves and think what is most important is their ability to market, negotiate and get their vendors the price they’re expecting (or better), this is not what makes an agent great in the eyes of their vendor.
Instead, it is the human skills of communication, empathy and assistance that vendors value. These are more likely to make a vendor feel that they had an excellent experience with their agent and refer them to family and friends.
Using Ferriss’ rules, here’s how the data broke down:
DON’T DISMISS PEOPLE
In the podcast, Ferriss talks about the tendency of those wanting to ‘network’ being to focus on the people they think are important while ignoring, or even being rude to, everyone else. His observation is that anyone can be important to you; treating everyone decently and with respect achieves infinitely greater gains than the time you might save by being dismissive.
For agents, this plays out at every open for inspection, where too many agents still focus on those attendees that they perceive as ‘valuable’, while ignoring or making spot judgments about others.
The Perceptions research showed 58 per cent of our surveyed vendors chose their agent because they saw him or her in action at a sale. These were the agents who weren’t dismissive but made time to talk and find out about their back story. People went on to sign up as their vendors because the agent had effectively passed the audition.
DON’T BE A DICK
Hot on the heels of not dismissing people is Ferriss’s bluntly titled second rule, ‘Don’t be a dick’. I love this one. Without fail, every vendor in our survey who had classed their sales experience as a disaster described their agent in this kind of way.
Most often, the arrogant behaviour was due to the agent putting their own needs first, failing to follow up, dumping the client the minute the sales contract was signed or promising the world and delivering a big fat zilch.
The Perceptions survey showed a serious number of real estate agents are at risk of this kind of behaviour, with 34 per cent of our vendors identifying that their experience was average (20 per cent), poor (10 per cent) or disastrous (4 per cent).
“Our agent offered to arrange storage to help us declutter, which we thought was a fantastic service. But then he didn’t deliver!” wrote one vendor. Another rightly complained, “Some of the agents we interviewed only wanted you to sign up and be their next 2.2 to 3.3 per cent commission. Some were openly critical of other agents, which we found disappointing and unprofessional.”
The survey also showed how being a dick is in no way clever, with 31 per cent of our surveyed vendors saying they would never recommend their agent or use him or her again. Think about that – nearly a third of your client base doesn’t want to hear from you ever again! Bad behaviour is really bad for business.
In the convention circuit, Ferriss advises his audience to focus on taking their time and aiming for quality interactions rather than quantity. In the Perceptions survey, our vendor responses flagged that they too highly valued agents who listened empathetically to their concerns during the sale and who took time to explain the process and manage their apprehensions without feeling pressured.
“Our agent kept us informed about everything throughout the process and was always happy to talk to us about our concerns,” said one vendor. “My agent never rushed. He always had time to talk or meet,” wrote another.
The reason quality interactions are important is because they are most likely to result in a referral. The survey showed that around 31 per cent of vendors rated their experience as excellent, which correlated closely with the 36 per cent of vendors who said they expected to stay in touch with their agent or use him or her again. In the same way, 68 per cent said they would recommend their agent to others, which correlated closely with the combined number of vendors who said their experience was excellent or good.