What is a real estate referral program? How does it work and what can it do for you, as a real estate agent?
For businesses of all kinds, anything that helps to reduce the cost of doing business while improving the rate of success is highly welcome. Since businesses exist to find and serve customers, it makes sense that whatever makes it easier to find customers should be prioritized. This is exactly what a real estate referral program does.
A real estate referral program is where a potential client is introduced to a real estate agent by someone or an organization that is connected to both of them. The client may be introduced by a past client, another real estate professional, or a referral company. Referral programs are one of the best ways for estate agents to grow their businesses.
Doing referrals is the way business has been done since the beginning of time. A referral program simply takes what already exists and makes it more organized. Using a referral program offers clear advantages over other methods of customer acquisition. The cost is lower and the quality of leads your business gets is better.
Why should you use a real estate referral program?
Quality Leads
Unlike the clients who come to your business through other channels, referred clients are often at the point where they are ready to make a buying decision. They are typically people who have already done business with the source that is recommending them. Therefore, you do not have to do a lot of work to convince them to buy.
Existing Foundation of Trust
Since these customers come to you from an individual or business that they know and trust, they will automatically trust your business. They subconsciously assume that if this person or organization whom they know to be reputable recommends you, it means you also must be trustworthy. This makes it a lot easier to deal with clients who come to your business via a referral program.
Minimal Customer Acquisition Cost
Depending on the kind of referral program, you might not have to pay anything to get potential clients sent to your business. Even when you do have to pay, the cost of those referrals is insignificant compared to what you would pay to acquire customers via other channels. Furthermore, with some referral programs, you do not pay anything if the client does not do business with your firm.
Brand Exposure
Even when a referred client fails to buy from your business, you do not lose completely. For one thing, you acquire that person’s contact details and if you persist in building the relationship, they may eventually buy from you. But more importantly, your brand gains visibility as people and organizations in your community come into contact with you.
How do real estate referral programs work?
A real estate referral program is a framework for businesses operating within the same space or locality to share information with one another for mutual benefit. An estate agent using this strategy would connect with other businesses in their locality. These would normally be businesses that have links with the customers the estate agent is chasing.
The goal of the partnership is that when the clients of those businesses need a service provided by the estate agent, those businesses can refer those clients to the agent. In return, the estate agent will also do the same for those businesses. The result is these businesses built a community for mutual support.
Here are a few examples of the kinds of referral programs estate agents can build:
Local Business-to-Estate Agent Referral
Businesses can build their client base by being present where their clients are. For instance, an estate agent needs the services of a doctor, dentist, attorney, accountant, car mechanic, and financial adviser. They also use the same coffee shops and restaurants as their potential clients. These are people and places with whom the agent and their potential client have built long-term relationships. These relationships can be mined as potential sources of referrals.
Client-to-Estate Agent Referral
There is no better referral than one from a happy customer. If an estate agent is professional and likable, clients will be happy to recommend others to that agent. But the estate agent must create a system that makes it possible for those past clients to do this with ease. To benefit from clients’ connections, you need a system to remind them. You may also need to offer incentives.
Property Manager-to-Estate Agent Referral
This is one of the best types of referral programs for estate agents because the clients that come via this system are usually highly motivated. You can connect with a local property manager to become the preferred estate agent for rental property owners who want to sell their houses or want to buy new houses. On the flip side, you can send your clients who need property managers to the property management firm.
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