I want to dumb down this real estate marketing game for you and in this post am going to show you how to get referrals. Everything you are about to read is not rocket science, but common sense. My goal is that you will learn how important it is to focus on building an audience of relationships in this business.
You don’t get referrals from strangers, you get them from people you know.
Let me ask you a question….
If nearly 61% of business is generated from referrals and repeat clients, what should be your most important marketing strategy? These aren’t statistics created by me, these are facts reported from NAR.
Should it be Facebook ads?
Should it be Zillow leads?
Should it be cold calling?
Should it be direct mail farming?
Should it be door knocking?
These are all great ways to prospect new business, but how could your prioritize these marketing strategies over marketing your sphere of influence when it’s a fact that over 60% of business comes from referrals and repeat clients?
If I were to open up a taco stand in San Diego and I found out that roughly 61% of my customer base were from a certain area or demographic, I would focus the majority of my marketing outreach and efforts to that audience don’t you think?
I would first determine how I could create content or advertisements focused in speaking directly to that audience so I can narrow in my marketing plan. In any business, this is the very first thing you do. It’s essential to understand and focus all marketing efforts on targeting your most ideal audience.
The chart above is factual data on where over 60% of business originates from real estate agents, their sphere of influence. Not focusing on marketing your relationships is like me opening up my taco stand without putting a sign in the window saying I sell tacos? It would just say FOOD.
What are you doing in your business right now to generate more referrals?
The truth is that a large majority of real estate agents are chasing leads vs. creating and maintaining relationships that produce referrals and repeat business. We are told to believe that we should be door knocking, cold calling, or prospecting strangers when in reality it should be a priority to set up a system of staying in front of the audience that is responsible for over 60% of your business before you begin setting up prospecting strategies.
Prospecting strategies are great, but absolutely should come secondary to setting up a system that generates referrals and repeat business.
What Kind Of System?
What I am talking about is farming your relationships so let me explain.
We all know direct mail farming works. It’s been a marketing strategy since the dinosaurs ruled the world. You pick out a neighborhood and then consistently mail it over a period of time. After about 6 months or so many agents tend to start seeing some results of those efforts (if not sooner). The longer you maintain a presence and build a brand in your farm area, the better the results over time. The reason this takes time to build is because it takes a while to get people to remember who you are. Over time direct mail farming creates top of mind brand awareness.
So if direct mail farming a bunch of strangers works, imagine if you started farming your relationships?
Why You Should Farm Your Relationships…
The biggest mistake most real estate agents make confuse why they are marketing their sphere of influence.
ITS NOT FOR DIRECT BUSINESS, ITS FOR THEIR REFERRALS!
You must market your relationships to maintain top of mind awareness because when you are out of sight you are out of mind. This is no differently than farming a neighborhood. If you stop farming it, you can expect no results. The same thing happens if you stop marketing your brand to your sphere of influence! Trust me people don’t remember what you for a living as much as you would like to believe. Top of mind brand awareness keeps your brand at the forefront, nurtures your relationship with your existing audience, and makes it easier to be remembered when a referral opportunity rises.
This is mathematical marketing, not theory. You can literally get a good estimate on your referral opportunities for the next 12 months simply by determining the size of the audience you are marketing. According to MelissaData, the annual statistics in the United States show that 14.19% of the population is moving this year. Marketing your audience consistently will help generate direct business simply based on factual data here, but that’s not why you should be marketing it primarily.
You market your relationships because 100% of them knows someone who is moving that they can introduce your services to!
Let’s do some simple math.
100 People You Market or Farm consistently over a 12 month period.
Roughly 14 of them are going to be moving this year. Marketing them directly will help you generate some of that direct business as long as they know, like, and trust your brand. If you want to generate more direct business from your database all you need to do is double the size. If I had 200 people I was consistently marketing, it would be safe to say that roughly 28 of them will be moving this year. Considering the average agent only does 6 sides annually, you can see how you can literally trip over business just doing this. Focus on building your network before you start focusing on building squeeze pages, running Facebook ads, or knocking on some random persons door.
However, the true value is that EVERYONE in your network has the ability to refer you because EVERYONE knows someone who is moving this year. Think about it? The question becomes if they will refer you or not. You get referred when you create top of mind awareness of your real estate business with the people that know, like, and trust you.
Some other articles you may want to read…
The 3 “Channels” Every Agent Should Use For Referral Marketing