Real estate brokers work in a challenging and dynamic industry where short-term success only sometimes translates into a life-long and consistent career.
Headwinds that both rookie and veteran brokers will inevitably face include changing interest rates, changes in the economy and unpredictable government policies.
Building a referral network is a keystone of every successful real estate agent’s business. As an agent’s referral network strengthens and grows, so do prospects for consistent and long-term success in real estate, regardless of external factors. As you add more referral members to the mix, you will pick up clients in new ways that don’t require you to provide those ancillary services directly.
What is a referral network?
A referral network is a group of past customers, real estate agents and ancillary business professionals who refer your agency to interested leads. The primary goal of a referral network is to consistently bring in new business by encouraging referral partners to share your brand and skillset. When executed correctly, a referral network provides a very high ROI and a self-perpetuating cycle of new and repeat clients.
By working with other real estate agents, you can pick up or be exposed to a larger client base. If you specialize in residential properties, by working with a commercial real estate client you’ll get referrals without working directly in commercial real estate!
Partnering with businesses that provide ancillary services to the real estate industry is a great idea. By partnering with a roofing company, you may receive a referral for a customer who would prefer to move into a new house instead of dealing with repairs.
Building a solid referral network
Here are strategies that will help you start or strengthen your referral network:
1. Show gratitude for referrals
When building a referral network, it is important to consider what your referrers get out of partnering with you. It’s key to add value to your network; this is how you ensure that your network consistently returns value to you!
It’s a good idea to brainstorm different ways to appeal to your audience. Depending on their role, it may be prudent to provide different rewards. Consider sending sports tickets if you wish to build connections with related businesses or fellow agents. Some referral networks also include tiered profit-sharing programs.
At closing, you can send gift cards to a home improvement store to the referrer. The amount can be a percentage of your commission or sale price. It’s a small gesture that shows appreciation and reminds your past client about the relationship you shared. Small gestures are an organic way of encouraging an ongoing relationship.
Even if you opt not to have a rewards program for referrals, it’s highly recommended to find a way to show personal appreciation for any referrals. Even if a referral does not convert to a sale, just send a “thank you” note! This keeps the referral relationship alive. Open channels of friendly communication are a healthy way to provide feedback and updates.
2. Never stop networking
A body at rest will remain at rest, and a body in motion at a constant velocity will remain in motion. In the modern interconnected world, there is no reason to stop networking.
For the stay-at-home agents, there are ample virtual networking events. Some of these virtual networking events have in-person components. In-person conferences represent an opportunity to travel outside of your home base and greatly expand your sphere of potential clients.
For example, here are two of the most essential real estate conferences:
- NAR Broker Summit – The National Association of Realtors (NAR) caters exclusively to the needs and special interests of brokers with a real estate agency. No virtual option.
- Tom Ferry’s Success Summit – According to Tom Ferry, “What you say matters.” At this summit, you learn and practice ways to have high-value conversations with clients, leads, and referral network prospects. Virtual option available!
The above list is not definitive but should help you understand that there is a wide range of conferences you can attend, in-person or virtually, to grow your referral network.
3. Use cloud-based services
There is an assortment of paid tools that you can use to track and streamline your referral network. It’s easy to find these with a quick search!
Instead of using a paid service, we recommend using Google’s cloud-based products. Using Google’s services is a great way to bring your agency with you, anywhere you go!
Use Google Sheets to build a spreadsheet that tracks members and the clients they’ve recommended. Add relevant information, such as business, relationship, location, contact information, and clients referred.
Google Drive can be a centralized repository of your documents and any agency-related information. With both Sheets and Drive, you can view and edit files from anywhere and share access links with anybody.
With Google Forms, you can create referral sheets where you can collect key information; anything from name and contact information to price range and desired neighborhood. Your form can have bulleted choices, multi-select answers, text input fields, date selection, and more. Information entered into a Form is placed into a spreadsheet, which means all this information can be checked in one digital file.
4. Use social media
If the idea of sending out timed newsletters or using software to manage your referral network is unappealing, consider turning to social media. While LinkedIn, Twitter, Facebook, and Instagram will not always translate into sales, these tools still provide an efficient way to post updates and stay in touch with past clients and your network.
An additional benefit of regularly using social media is that you will build a public portfolio. This portfolio provides new clients and members of your network with an easy way to reference your past business and imagine what you can do for them.
It’s a great idea to set up a Business Profile on Google. Your agency will show up on search results and Google Maps; reviews will be publicly visible. You can offer an incentive to increase review traffic! A profile takes minutes to set up, is free, and acts as a great point of reference. Some lead generation companies also provide this service of helping obtain the reviews and referrals of past clients to add to your social media.
5. Nurture your network
It’s natural to have top-referring members and others you only get occasional clients from. It’s key to consider how you will stay in touch with and reward top performers. Most real estate agents have success developing a closer relationship with their network’s top performers.
Reaching out to your quieter members may be a contrarian and beneficial option to consider! These members may be unsure of what differentiates your agency from others, or they may have so much business they’ve forgotten to send you referrals.
It’s great to celebrate success with your network. However, being comfortable with guiding your network may provide even greater value to your agency.
6. Just do it
Asking for referrals may seem strange. Just ask for referrals and don’t be shy!
Every real estate agent is trying to grow their business. Most businesses want to keep their customers happy; connecting customers with reputable partners helps achieve this. And, past clients would be delighted to help their friends and family find their dream home or office.
If you have a good professional relationship with someone it is natural to expand it to others. Just remember: you are offering a service that benefits others.
7. Keep it simple
At the end of the day, you are building a referral network to benefit your real estate agency. For the most part, a successful referral network should self-perpetuate; you should be in a position where managing your network feels like a natural process of your real estate sales channel.
Your referral network should complement your agency without becoming it. If you feel that you are focusing or spending too many resources on your referral network, it’s okay to take a step back and refocus on your agency
Chris Heller is a real estate industry expert, best-selling author and currently serves as the chief real estate officer at Ojo Labs.
