Referral incentives are a great way to encourage your existing clients and peers to bring new clients your way.
Word of mouth is a powerful marketing tool. It is an inexpensive way to promote your brand and create direct leads without exerting a lot of effort or cash. The key, of course, is promoting word of mouth referrals through your existing network.
The Traditional Route: Money Talks
In businesses that entail repeat visits throughout the year (like a chiropractor or bank) it’s easy to thank a client for a referral by offering free services or discounts. This approach can also work for real estate professionals who receive a referral during an ongoing business transaction with an existing client. As a reward for referrals, consider a discount on your fees. You may determine the amount based on a sliding scale. Properties sold at higher price points receive greater cash incentives. You may also want to keep it simple with a flat rate. Either way, money talks, and it is a great way to encourage existing clients to spread the word.
Yet for the average agent, the same client isn’t making multiple transactions each year and most referrals will come after a single deal has closed. In that case, gift cards come in handy. Giving someone a $50 gift card for a referral when you’ve just brokered a $500,000 deal– that came to your doorstep–isn’t a bad trade at all.
When considering gift cards, avoid the generic VISA card and aim for something industry specific. If that gift card is to a home supply store, for example, clients will think of you each time that they pass their new backsplash or elegant vase. That reminder might just prompt more referrals! Incentive Card Lab offers an array of gift card options, allowing users to sort by field of interest.
Free, Creative Alternatives
When cash incentives and gift cards aren’t feasible, there are low-cost and no-cost ways to thank customers for referrals. These methods can also be effective if they appeal to the right emotions.
Once a referral is made, consider recognizing the existing client publically for his or her efforts. Even if it’s a simple shout out on Twitter, your client will know that you sincerely appreciate the referral. The client will enjoy being recognized. Public acknowledgment makes people feel good! A public acknowledgement will also catch the eye of potential clients who visit your social media pages. When they see that customers are willing to refer you without a dangling carrot attached, it will reflect well on your business.
Soft benefits and upsells can also lead to free referrals. When listing properties, consider a banner or distinctive text that will set the properties of clients who make referrals apart from other properties. The clients who make the referral will appreciate the “special” advertising their properties receive; you may then draw the attention of other existing clients who will want to know how they can get in on the special ad. The latter clients will be encouraged to make a referral as well. Your business can grow simply by changing fonts!
Another feel-good, no cost way to promote referrals is follow-up communication. A phone call is more time consuming than an email, but the warmth of a person’s voice is more memorable than written text. Even leaving a voicemail can be effective:
“Hi, Krista. I hope that you’re enjoying your new home. I knew it was yours when you first saw those views. It was love at first sight! Tell the boys I said hi, and I hope that they’re loving the pool. Have a great summer.”
By highlighting personal tidbits of info, you remind the client that you found a property that fit their must-haves list. Taking the time to call shows that you care. The client will feel good about the services you provided and the kindness that you demonstrated, which can lead to referrals.
Pass Networking Benefits to Your Clients
Another free incentive involves networking with industry-related professionals. Appraisers, land surveyors, inspectors, utility suppliers often interact with families that are looking to buy or sell. You, naturally, have clients that will need their services. Work as a team to generate business.
SCANA Energy, for example, offers discounted rates to customers who have been referred by a real estate agent; the agent also gets a gift card. It’s a win-win for you, the service provider and the new clients that skipped the legwork to get find excellent services.
Just be mindful that clients reserve the right to find their own service providers; they shouldn’t be bullied into doing business with your buddies. Such alliances may also be unlawful in some states, so speak with your attorney before formulating your networking plan. Lastly, never recommend a company that you wouldn’t work with simply because of the kickback. Your integrity and good name are on the line.
Which incentive plans have worked well for your business? Which have not? Share your best practices with other agents in the Point2 community by commenting below.
Today’s guest post comes to us from Erica Rascón, a writer for The Balance Sheet — the Yardi corporate blog — as part of a post exchange.