By Joe Cooke
RISMEDIA, March 11, 2008-What kind of follow-up system do you have in place to generate referrals from your database?
In January, I sent two referrals to the XYZ Team. By my calculations, that would be at least $15,000 in listing commissions, not counting the selling side and any future business. Because they are purportedly top-producers, they may get as much as 80% of that amount, but even at a 60/40 split, their share comes out to $9,000 in net commissions-in one month.
I did not receive a response for the first referral. This was their response to me for the second referral:
Thank-you for referring the Q’s to us. They speak very highly of you. We will work hard to sell their home.
Have a good week.
These are good people and good agents, but their lack of meaningful follow-up with me, coupled with some shenanigans in the community by another agent in their office, has turned me off.
Are you thinking that I’m greedy or ungrateful, expecting some kind of reward or recognition for sending business to these people? I’m simply human. In fact, I think I’m more thoughtful about this than most of your referral base. Most of them just quit sending you referrals-they move on and you never know why.
I’m telling you why. I feel as if the XYZ Team is taking me for granted, and I’m not sending them any more referrals.
Worse yet, there are a group of us in town talking about their company, the other agents and even the XYZ Team in a negative way. The ripple effect is enormous! I now know at least two prominent property owners who will no longer send any business that direction. And they will most likely warn their friends to go elsewhere as well.
Who wins here? The next agent in line! And guess what? There is always another agent in line. That agent could be you, if you simply put a Client Appreciation Program in place.
Elements of a Good Client Appreciation Program
The secret formula for a successful Client Appreciation Program in today’s market is very simple. It consists of three steps: give, ask, and then receive. If you can incorporate this simple philosophy into everything you do, from open houses to direct-mailings to following-up on Internet leads, you will master this business.
The first step is to give something of value. People are now inundated with advertising-you need this, work with me, buy this now. Everyone wants something from your prospects. Receiving a sales pitch is a turn-off. So, stop doing what everyone else is doing wrong. Instead, stop asking and start giving.
For example, say you are holding an open house. People come in. Do you see them as possible paychecks, or do you see them as people seeking something? Are you asking yourself what you can do for them, or are you wondering if you could get them as a client so that you can earn a commission? If your answer is “commission,” I can guarantee you are as transparent as plastic wrap. You’ll catch a few sales with that mindset, but you won’t find any long-term success.
For one solid month, try letting go of the paycheck idea and grasping instead onto an idea of connectivity. People know people. Treat these people well, and they may buy from another agent, but keep them in your loop and you might earn two, three or five times the business in referrals.
For example, several years ago I visited an owner who was trying to sell his home without an agent. I gave him market information on a regular basis, showed his home and spoke with him on the street several times, but when he decided to list his house, a couple of other agents from my office dived on him and he went with another brokerage completely. I showed his home several times and spoke with him whenever I saw him. Someone else finally sold his home. The entire experience drained him and made him even more wary of real estate agents, but whenever he had a referral, he sent it to me. I treated his referrals like gold, and I made a friend, built my business and earned a living. Not from asking. Not from getting agitated or upset, but from giving.
This is the least important step, but for most agents it is the most overused and abused. Ask lightly. Ask respectfully. Be honest and authentic. But most of all, ask after you have established trust through graceful giving.
If you are not giving on a consistent basis, and suddenly you show up or call asking for business, you are making a withdrawal from an account that probably does not have enough funds to cover your request. You have to make many small deposits over a long period of time to create customer loyalty.
Guess what? We’re back to giving again. If you have not been giving (making deposits) you cannot ask effectively (make a withdrawal).
If you have been giving on a consistent basis, and if you have been giving something of meaning and value, the way you ask is of very little importance. You can botch the asking and still get a referral, still get a listing or a sale, if you’ve built trust and respect through giving.
Finally, you have to learn to receive gracefully. I have people calling me all the time asking for a good real estate agent. I have a few I refer to consistently because they always provide good service. However, several years ago, one of my favorite teams complained to me about a client I had referred to them. Even though the client had turned out to be difficult, their lack of graceful receiving caused me to stop referring to them for quite a while. Even now, when I send them a lead, I think about that event from the past.
Here is a key point. When you receive a referral, make sure you send recognition immediately. Don’t wait until the home sells. Don’t even wait to see if you actually get the listing. Reward your sources for the lead, not the listing. What you do with the lead is your business. You may blow it, or they may choose another agent for some reason. Regardless, if you want to continue getting leads, you need to water your garden. If you don’t, it will wither and die.
What about the XYZ Team? What could they have done differently to keep me sending leads their way? What would you do for someone who sent you $12,000 in business a month? What are you doing? Are you not getting referral business like that? Why not?
Take a look at your Client Appreciation Program. The reason might be there (especially if you don’t have one!).
The point is to receive gracefully. Everyone you meet can contribute to your long-term success, if you let them. When you finish a transaction, when you receive a lead or a referral, be grateful and act accordingly. Send thank-you notes and thoughtful gifts.
At this point you are actually back to the giving step again. It’s a cycle. Give, ask, receive and then give again. Do this and you stand a good chance of being the next agent in line when someone is handing out referrals. I know who my next agent is.
Joe Cooke is a nationally recognized expert on the nuts-and-bolts of real estate sales and marketing. Visit www.joecooke.com for a free copy of his book, Creating Customized Marketing Plans.