First, the average income for a real estate agent working between 21 and 39 hours a week is $46,458.
The average income of real estate agents who have been full-time in the real estate business between four and 10 years is $63,595.
The average real estate agent in the U.S. closes 12 deals per year.
Not trying to be average?
We don't blame you.
Second, did you know 92% of consumers trust referrals from people they know and people are 4 times more likely to buy when they are referred by a friend?
That's according to a Nielsen study.
Would a few more referral sources in your camp make an impact?
And before you say "Yeah, but according to the NAR, I can't pay non-licensed people for referrals"...we're not talking about referrals in the agent-to-agent sense, but rather personal referrals or "leads" that come from your existing network.
Remember, you can pay/reward anyone for any leads or marketing services that you want, as long as it's not contingent on a transaction happening.
Feel free to check out THIS ARTICLE for more on the NAR referral rules.
Personal referrals are obviously crucial for Real Estate Agents, but less than 3% actually setup a repeatable system that consistently delivers them.
This is what we intend to change for you with this guide.
You'll also learn about Dan, one of our case studies who is implementing these practices in his own real estate business, and we couldn't be happier for him.
And if you want to launch your own explosive referral system when you're done reading, we got you covered.
Now let's get started...
Sure, you can bring in some leads with a $100K marketing budget, develop a robust SEO strategy, research PPC google ads, buy some random billboards and pull your hair out trying to master Facebook advertising.
You are more than welcome to compete in that rat race.
But is that why you got into this business?
Will those approaches even work?
Despite all the other channels, when we ask agents "How to get real estate clients?" 9 out of 10 will respond with things like “it’s all word of mouth” or “pretty much through referrals”.
And the funny thing is - that's SO true!
Because we all know referrals are hands down the most reliable channel for new clients.
The problem is, without an organized approach, referrals can be hard to come by.
They're left hoping that more referrals will magically appear.
But that doesn't always happen.
So they turn towards something they can put a strategy behind.
They look at online ads, brochure ads, ads on benches, Zillow leads, list buying, and on and on.
They almost completely forget about the power of their own personal network.
The personal connections they enjoy and the value of their relationships (which is probably what convinced them they'd be successful in real estate in the first place!).
Now, as we get started, think about all the people you know who would be an advocate for your business.
They might be family, friends, neighbors, acquaintances or past clients.
Next, think about all the people that would be advocates for your business if they were properly motivated.
You would be surprised at how many stellar advocates are out there who would be ready and willing to join forces with you in making your business ultra successful, and share in the profits along the way.
The idea behind this is very simple, but the message needs to be crystal clear. You have thought of them as a person you would like to represent your brand and you are going to make it very, very worth their while.
We’ll walk you through this strategy step by step, including:
You have a massive opportunity when it comes to referrals, and a proper referral program can not only lead to explosive short-term growth, but will lay the foundation for a long-term referral-generating machine that you never thought possible.
Over the years, we've found 3 components for a successful referral program...
Have a way to easily remind your Ambassadors that you are in business to help people with their real estate needs. This can be done via email, text, by phone or whatever makes the most sense for you. The important thing is to get in the habit of reminding your Ambassadors about your offers and what’s in it for them.
Make your referral program easy to understand. You need it to be customized for your business, but you also need it to be very easy to deploy, manage, and most importantly… be headache free for your Ambassadors.
Confirm that the incentive you are offering is going to motivate your referral sources. This is imperative and the detail that is tragically lost on most Realtors. Many people think that they can throw out any old offer and it will WOW people into referring them business. Nobody cares about a Starbuck’s gift card. NOBODY. Make your reward compelling enough for your ambassadors to send you more and more.
Any Real Estate Agent can have a referral program.
It’s really not that difficult.
The main differentiator is whether or not the program actually delivers referrals.
You’ve probably received countless emails from all kinds of businesses asking for referrals or reviews on google, Yelp, Angie’s List, etc..
The problem with that is you probably didn’t ask to be emailed about it, you probably don’t have time, and there’s certainly no WIIFM (what’s in it for me?) involved.
If you’re taking your referral program seriously, your referral sources should know that they’ve agreed to participate to earn rewards or benefit in a significant way.
You can even establish goals with them and keep them updated on their referrals and payouts.
When you put real focus into a professional referral program, you do a number of things to set yourself up for success and apart from the masses.
And this is why we put this guide together.
Because referrals work very well for Realtors.
Think about how many clients you could bring in if you had a system to generate 5x, 20x, 100x more of them!
The great news for you is that you already have the raw materials, you just need to organize and streamline your system.
Create a reward for your ambassadors
This is the most difficult part which is why we create custom landing pages to host your ambassador rewards and your prospect offers on our platform.
As far as the dollars and cents go for your rewards...there are three parts to this and it’s important to get it right.
A = $15,000
You can input this on your own as it will vary depending on your market/location and the structure of your business.
B = 12 (1 per month)
This will vary depending on your current stream of clients, availability and market. But let's assume you can handle at least 1 more client per month.
C = $500
Let’s be serious - referrals are worth their weight in gold to you. Especially the ones that actually do a deal! If you do it well enough you may not need to spend ANY other money on marketing. You should be more than happy to pay a real estate referral fee, because this is a client you would not have had otherwise. We recommend getting aggressive and offering a value of $500 per referral once you are reasonably sure the client is going to transact. Word of mouth is crucial to your business and there is a serious snowball effect when it comes to how to get real estate clients. Don’t be afraid to provide extra motivation when profit margins are high.
Create an offer for your prospects
Your offer does not need to cost you anything other than some time.
Your offer simply needs to provide enough value to make your prospect want to have a conversation with you.
This can be a:
-Free Home Estimate
-Free Market Consultation
-Free Home Sale Checklist
or any other type of value-based offer.
The goal here is to give something tangible for your ambassadors to "hook up" their friends, all while making sure you get to meet the prospect.
Count your social currency
Create a spreadsheet that lists out your family, friends, acquaintances and clients. You just need their first name and email.
These are all potential ambassadors. Don’t miss anyone - you’ll be surprised at where referrals come from.
Your goal is to come up with at least 100 people that might possibly refer you a new client if it crossed their mind. And it IS going to cross their mind - we'll get into that next.
Invite ambassadors to your referral program
Most Realtors wait until they get a referral and then awkwardly have a conversation with their referral source about how appreciative they are and what they can do for them and yada yada...
We're not doing that.
We're going to be proactive.
Send out a digital invitation and welcome your family, friends, acquaintances and previous clients as people you want representing your business because of the respect you have for them.
There is nothing wrong with a little flattery here.
Most importantly, make it clear that it is your company policy to give rewards for referrals.
Take the awkwardness right out of it. You want referrals and you want to pay for them. Come out and say it. It’s refreshing and it’s good business.
You can send an offer to anybody and tell them to refer you business, but it’s far more relevant and effective if you give them to people who are already excited to receive them.
This is why Step 2 is so important. It allows you to have a framework for handing out your offers to people who will be expecting them.
When you are giving your offers, it is crucial that you be very upfront about what your Ambassador will receive AND what any referrals will receive....for a very specific result.
Don’t just say “you’ll get X amount for any referrals you send my way” but rather “I’m excited to offer my Ambassadors a $200 Amazon Gift Card for any new client that goes under contract for my services.”
Iterate and manage your referral program
Half of the battle here is having a motivating reward and offer (STEPS 1 & 2).
The other half is keeping your services top of mind.
You need to be the first person that everyone you know thinks about when the words “real estate” or “looking at houses” or “I need a realtor” comes up in their day to day conversations.
Keep updating your list of ambassadors and plan to regularly message each of them.
These messages should include the new offers you are running to keep them actively engaged and motivated to send referrals your way.
Switch up your offers to keep things fresh and remind your potential ambassadors about the reward you’re offering.
When it comes to referrals, top of mind + little effort + big reward = ACTION.
Remember, you just need a foot in the door, that simple personal introduction, and that’s something your ambassadors can help you with very easily.
Just make sure to reward them on time, every time.
At Referral Program Pros we setup simple but powerful referral programs so that you can generate consistent referrals.
Let's start your referral program today and grow your business together!