Did you know that customer referrals may be the most effective tool in your marketing bag? As a matter of fact, 42% of home buyers were referred to their real estate agent by an existing or previous client, and 74% of clients will provide a referral if their agent has stayed in touch with them. Referrals are inexpensive, produce results, and helps generate an incredibly powerful network effect. Your network, therefore, becomes critical to your success, and with the help of a smart strategy you can create an ever-growing network that will deliver a continuous supply of high quality leads.
“I’ve come to believe that connecting is one of the most important business—and life—skill sets you’ll ever learn. Why? Because, flat out, people do business with people they know and like.”
-Keith Ferrazzi, Never Eat Alone
The importance of networking
We are all bound by the laws of human nature, and scientific studies demonstrate that humans crave connections with other humans. Those laws translate into a world of business where we instinctively prefer to do business with people we like and have an affinity for. Those people mould our network, and if we treat them well, they help us expand it. Therefore, the bigger the network, the bigger the pool of potential clients becomes.
Consider that networking is the single biggest source of leads for real estate agents; 34% of all actual closed business comes directly from an agent’s network. The second most impactful lead source is from paid digital advertising, but that only delivers 19% of all leads.
What’s especially compelling about these types of leads is that they are among the highest quality ones you’ll ever get. People in your network either already know you, or they have a connection with someone who does and can validate your credibility. That immediately breaks down the awkward part of having to sell yourself and go through the back and forth dance of proving yourself. You always need to deliver for your customers, but referrals are a core part of your network because they get you closer to actual business than almost any other marketing tactic.
By definition, networks are always growing. That growth delivers you more connections and strengthens your reputation among people you already know and vouch for you. This is an especially important thing to understand in an environment where people are busy and are constantly seeking ways to reduce the burden of assessing and interviewing potential service providers. Once inside your network, the hassles of vetting a Realtor® are essentially solved for them, which gives them even more affinity for you.
Referrals are your network proof-point
Let’s think about it from a practical point of view: if you were in the market to buy a house and make one of the biggest decisions of your life, would you choose your Realtor® based on a trusted friend’s advice, or pick the first name that shows up in a Google search for local agents? We trust our friends and we rely on them, and if they have had a positive experience with a real estate agent, and then pass that recommendation to us, there’s almost a guarantee we’ll go with it. It’s just a natural progression of the relationship because satisfied customers are usually happy to refer you. In today’s market consumers have more choices than ever before, so they increasingly rely on proof points and validation from people who are like them.
According to the National Association of Realtors®, 62% of all home buyers choose their agent based on some form of referral. That statistic speaks volumes about the need to service clients, maintain a connection with them, encourage them to promote your name, and continue to deliver such excellent service that you are THE go-to person to help with real estate needs.
Growing your business and brand obviously takes a lot of smart marketing, but a vibrant, growing network will deliver referrals at a much faster paced and with overall greater consistency than any other method. Most importantly, these leads will be high quality and more prepared to buy.
Agentology has created an impactful solution for lead generation and sharing called the Agent-to-Agent Referral Network. It enables agents to refer qualified leads and receive a payout for every closed deal. Major real estate firms like Coldwell Banker, Century 21, Berkshire Hathaway, and others are currently using it as a way to help their agents get greater impact from their networks. It’s also a roadmap to help agents generate better leads and be rewarded for providing others who are likely to close.
We encourage you to try our Referral Network to see how the power of networks can not only deliver qualified leads, but can begin to generate a sustainable, growing channel.