If you’re like many real estate agents, you rely on referrals as one of your primary sources of attracting new business. But most real estate agents don’t have a referral marketing system to maximize this powerful business building tool.

Getting referrals from clients isn’t difficult if you already provide great service. You probably already realize that disappointed clients don’t refer business, but happy clients will go out of their way to sing your praises.

Are you making it as easy as possible for your clients to refer new business to you? Here’s a quick 3-step guide to putting a referral system in place.

Step 1: Set An Expectation For Referrals

When you first start working with clients – even before you sign the agreement – set an expectation for referrals. Explain that you get the majority of your clients from referrals and that as part of working with you, you expect that once they see what a great job you do, they will refer at least two other people to you. Explain that this allows you to spend more time caring for and serving your clients rather than spending the bulk of your resources prospecting for clients through advertising and direct mail, as most agents do.

When is a good time to ask for referrals?

• When you first start working together – Making referrals an expectation or part of your working agreement is a great way to pave the way for referrals.
• At celebratory moments – Clients are most appreciative of your services when things have just gone extremely well for them. Use one of those opportunistic moments to ask for referrals – and follow up with a letter or email explaining that you market your business primarily by referrals and would they know of anyone whom they could refer.
• After the transaction completes – Take a gift basket or other nice gift over to your clients to check up on them after they’ve moved in. Again, ask them for referrals, while explaining how you will provide the same level of service they received from you to anyone they refer to you.

What shouldn’t you do? Maybe you’ve heard those horror stories about door-to-door salesmen who would demand you write down 5 names of people they could call on while you watch. Don’t be that person! You don’t want to intimidate people into referring business to you.

Step 2: Make It Easy For Clients To Refer Business To You

Next, make it easy for clients to refer business to you. Let clients know who your ideal prospects are, the best ways they can refer business to you, and what you’ll do when they give you a referral, such as how you’ll contact the person, what you’ll say, and how you’ll follow up.

A good way to do this is to put together a one-page guide. By outlining your referral process, you reassure your clients that you won’t hound or annoy the people they refer, and you can give them the opportunity to be involved if they choose.

For instance, instead of saying “If you know anyone who needs my services, have them give me a call,” you might say “If you know someone who needs my services, give me a call first and we can discuss if I can help them and how to best approach them.”

Referrals are best if the referrer is involved. Can they set up a lunch appointment? Can they give their friend your special report that would be valuable to them right now? Can they write a letter or email recommending you?

Step 3: Reward Your Referral Sources

Finally, be sure to keep your referral sources up-to-date on the referrals they do give you. Let them know the status of the person they referred – did they become one of your clients? If so, how is that working out? Let them know you appreciate the referrals and consider rewarding them with a token of your appreciation.

One way to reward your referral sources is give an incentive for referrals you receive. Of course, you must make sure you are legally and ethically compliant, but there are many ways to be creative.

Can you hold a contest? For instance, anyone that refers business to you will receive an entry in your contest to win an all expenses paid trip to Hawaii as well as smaller prizes like an iPod or even cash if your ethics board allows it.

Or, perhaps you can give referral bonuses by partnering with local service providers. For instance, if someone refers three people who become your clients, you’ll pay your personal accountant to do their taxes this year or give them a 6-month gym membership to your local gym, 3 months of golf or cooking lessons or whatever else your clients might like.

Your referral sources will appreciate the gesture and be much more likely to send you new referrals in the future.

By taking some time to set up a referral system, you’ll drastically increase the number of clients who refer business to you.

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