By Ian Grace
We often need to change our traditional way of thinking – and sometimes a change will bring astounding results.
When I talk about referrals, in conversation or to any audience, everyone agrees they are great to receive and that they guarantee almost 100-per-cent conversion, normally at full price or commission.
Is it possible to target for referrals?
Where we need to change our thinking is rather than feeling it is “rather nice” when a referral “comes along”, we can actually set a target for referrals each year – something that most businesses, whether real estate or not, do not do.
But can it be done? Surely, referrals just happen when they happen, out of your control?
Well, a North American Realtor (in the top one per cent by the way), who I’ve known for over 10 years now, proves YES conclusively.
In 2001, he told me his total referrals for the year were 250 – amazing in itself! But then he informed me his target for the next year was 300. That really got my interest.
He achieved it and over the next few years I watched him go from 300 to 400 and then a staggering 500+ referrals. So yes, it can be done.
Let’s get started! First, look back at previously acquired listings/sales during the past year or two and determine what percentage of them has been repeat or referral business. Put this on a graph on your office wall, with the target you have set for repeat and referral business (for example, you might currently be running at 20-per- cent repeat and referral business and the target you have set is 65 per cent).
If the top 10 per cent of salespeople achieve around 65 per cent or more, let’s use that as a benchmark.
Think carefully as to whether, in this instance, this would be a one-year target or perhaps an 18-month to two-year target. Don’t set your target too high.
Now put a system in place to have a meaningful dialogue with every client every six months (you may wish to vary this timeframe, either now or later, based on results). Ask if you can assist them in any way and offer them a helpful suggestion/information of some kind. Then ask them if there is anyone they can refer (and document that this has happened on a simple spreadsheet – this is absolutely vital).
Just the mere fact of doing this will generate business – purely by asking the right question at the right time.
Make it easy for them – when you ask, either verbally or in writing for a referral, break it into mental bite-sized chunks such as:
* Family and relatives
* Friends
* Business colleagues and contacts
* Social, sporting and school contacts
When you just ask for “a referral”, they know so many people that it’s hard for them to get their heads around it. This way, by breaking it into these smaller groups, it’s much easier for them to virtually put faces with names and you’ll find your response factor increases dramatically.
Now ask yourself how often you could get a referral from each of your current clients. Would just one per year be feasible? (Don’t forget, you are now going to be in regular meaningful contact with them).
If so, you have just set a target of one referral per client per year and that goes on to the spreadsheet mentioned earlier.
Simple isn’t it? If you have 300 clients, your referral target is 300 (if you have 2,000 clients, it’s 2,000) and we know what that will do for your business (hopefully with 100-per-cent conversion).
Let’s face it; if you achieve just a fraction of that target, you will be more than happy.
Just follow those simple tips above and you are now on your way to targeting and managing referrals, which most businesses don’t do, thereby leaving your competitors far behind.
Perhaps a topic for another time is to set up a system for rewarding your clients – first for the actual referral and secondly when business is completed. Good luck!
Known internationally as “Mr. Real Estate Advertising”, Australian born Ian Grace is acknowledged as one of the world’s leading authorities on real estate advertising. Since 1994, he has delivered his programs throughout Australia, New Zealand, U.S.A, Canada and the U.K. His articles about real estate advertising have been published around the world. www.iangrace.com
