May 26, 2016
Referral leads not closing? Here’s how you can increase your referral lead quality
In businesses – like real estate – where people typically work by referral, many agents focus on bringing in a high quantity of referral leads. The idea is that if you have more referrals, you’ll automatically be doing more business, right?
You have to close those leads – turn them into loyal clients first. To do that, you need the right kind of leads: serious buyers and sellers who are eager to work with you. According to Seattle area real estate broker and business coach with The Success Perspective Nicole Mangina, quality matters just as much as quantity.
“Some referral sources – such as online lead aggregators and sometimes even other agents – provide low quality leads that require a lot of tail chasing,” states Mangina. “But referrals from people you know are the easiest, most cost-effective and most fun way to do business. Saying that it’s easy doesn’t mean that you don’t have to work to get the referrals and turn them into clients, but it does make that work a lot more enjoyable.”
So how do you get more of the prospects you really want to work with all the way: referral and initial contact to closing? By putting your focus on developing “referral-worthy” relationships, diligently planting and pruning your database, and developing good follow-up systems to bring more referrals to closing.
Be “Referral-Worthy” – Manage Your Relationships
The best referrals come from people you are in relationship with: current or past clients, friends, family or colleagues. According to Mangina, if an agent is not getting referral leads, or is having trouble closing them, it usually comes down to a relationship problem.
She states, “People need to know you care about them more than you care about the check. Never underestimate the value of live communication whether it’s on the phone or face to face. Email and texting will only get you so far.”
The quality of the service you provide is also critically important. Referrals entail risk on the giver’s part, so they are less likely to come from people who aren’t comfortable with your ability to deliver high-quality service. Quality referrals must always be earned, by providing awesome service and investing time into your relationships.
To make sure you are referral-worthy, ask yourself: Are you doing a good job of maintaining regular communication with contacts and clients, even when you don’t want anything from them? Are you providing exceptional service to every client, every time?
If the answer to either of these is no, this could be standing in the way of receiving higher quality referral leads.
Be a Good Farmer: Plant and Prune Your Database
Most new agents learn about farming: marketing to specific neighborhoods and working with the people in their sphere of influence. These people make up your “farm,” or database.
There is a temptation to think that the bigger the farm, the bigger the harvest. However, the real estate business is like farming in an important way – you can’t just harvest, you also have to plant and prune. Planting seeds means putting your focus on developing new relationships, as well as managing the ones you have.
A common estimate in the real estate business is that one in five people moves every year; in 2014, the US Census estimated this number at around twelve percent. That means between ten and twenty percent of people in your database may leave the area in any given year, making them no longer a great referral source for you. To keep things stable, you need to replace these numbers with new relationships and new referral sources.
A good farmer also knows that some seeds never sprout; in real estate, it’s a reality that some people simply won’t or can’t do business with you. Successful agents learn to spot these folks and act accordingly. When you put your focus on your best prospects and strongest relationships, and prune away the weaker, it actually strengthens your whole business. Pruning allows you to put more of your time into the relationships that are most likely to bear fruit.
Be Organized: Create a good follow-up system
Focusing on the areas above will help improve the quality of referral leads; now it is time to get them from referral to close. Setting up a referral follow-up system will help to ensure that your best referrals become clients that eventually buy or sell with you.
According to Mangina, “If the client isn’t going to buy or sell for 6 months, real estate agents who don’t have a good follow up plan tend to lose them. Just because it’s a referral doesn’t mean that you don’t have to bring your A game. When agents get lazy clients go elsewhere.”
How do you create a good follow-up system? This is where using some type of CRM application can really make a difference for you.
Your first step is to gather contact information from the person who provided the referral, and enter everything you learn into your CRM database.
Next, set up a time to call the referral as soon as possible – usually within a day is best, especially if your referral source told them to expect your call. In most cases, your initial contact will be a phone call, but if your referral source told you the person prefers social media, text, or email, these can also be good options.
During first contact, let the referral prospect know that you were referred to them by a friend, and identify by whom. Your first call is your chance to establish rapport and ask qualifying questions to determine what their needs are. Some great questions to ask:
- Will you be buying or selling a home, or both?
- Will it be a personal residence or investment?
- What is your timeframe for making your move?
- What kind of home are you seeking?
- Why are you moving?
- Have you started working with a lender?
- How often and by what methods do you prefer to hear from me?
(In the future, we’ll be providing some great scripts for you to use in your qualifying conversations, right here on the KarmaCRM blog.)
Learn as much as you can, and enter notes into your CRM database so that the information is handy whenever you contact the prospect. This information will drive your follow-up plan.
Prospects whose timeframe is longer, say 6 to 12 months, might appreciate auto-prospecting from your MLS or personal website so that they can stay on top of what is happening in the market.
Adding every prospect to your monthly email list is another must – make sure your monthly emails provide helpful tips for where they are in the buying or selling process.
Automated contacts are great, but it’s also important to schedule prospects for regular personal contact from you. For prospects who are looking to move right away, you might follow up every few days. Prospects who will be moving in the next three months might get a weekly check-in call; if they are looking further out than that, monthly follow up may be fine. When in doubt, ask the prospect how often they like to be contacted.
Just remember to keep the client’s needs in mind, and add value every time you call. Look for opportunities to deliver helpful advice and service, whether it’s putting them in touch with other service providers like movers or home repair people, giving them the inside scoop on what you’re seeing in the market, or letting them know of any events happening in the area.
Finally, remember that not every referral is going to pan out. But if you focus on these areas, you will soon find that both the quantity and quality of your referrals is likely to improve.