Working Your Database
The key to real estate is a building a referral-based business. Stay top of mind by developing your database.
Read the transcript
In this session we will help you understand the difference between “word of mouth marketing”, and “working by referral”, and give you helpful steps on how to approach your friends and family to develop a referral network in your first year.
So I don’t know if you know this – but one of the things almost all realtors do when they get in the business is to mail out, email out, or message out to everyone they know in some sort of form, “yay – I’m a realtor now – so let me know if you’re thinking of buying or selling a home & I’d love to help!” Sounds alright, right? But what do these people do next – typically NOTHING – they sit by their phone waiting for it to ring. Do you suppose this works very well? I’m going to go with NO.
Real estate is a people business – so it’s great that you want to let everyone you know know you’re in real estate right away because as stats tell us > a lot of people who buy & sell homes end up working with a realtor that was referred to them by a friend, neighbor, or relative. In fact the stats from the National Association of Realtors Profile of Home Buyers & Sellers from 2019 state that 41% of buyers used an agent who was referred to them and 66% of sellers used a referral to find their agent. That’s a lot of business right there! But, really, how does that work? How do you actually go about getting a referral because let me tell you; as I mentioned at the beginning, most realtors who actually think they’re working by referral are actually just using word of mouth…so let’s dig into the difference here some more…and before I go any further if you haven’t yet heard of or listened to Brian Buffini > you should definitely check him out as he’s built his entire career on this idea….building your business by working by referral
SO…some of what I’m about to go over is taken from a lot of Brian Buffini’s teachings…& here’s what you need to know.
*The highest quality lead you can generate is a referral.
*Most people generate referrals passively and by word-of-mouth.
*The key is that we must learn to generate referrals proactively by creating a system in which we are consistently in front of our best people providing actual value & building both your competence & your character.
The FIRST thing anyone getting into the business should do is gather a list of anyone you know. You’ll hear the term SOI or COI a lot which just means your “Sphere of Influence” = anyone you know. Now, I’m going to be honest with you…if you’re new to an area working by referral may take a much longer time to build because you just have to work on getting in front of more & more people to build up your database of people BUT it’s also true that it’s more important to go “deep” with your people then “wide.” This means for people who do have a big database/SOI – they have to really sort & qualify these people to find their very top referral sources. The Buffini strategy has you start with your SOI list, then sort & qualify them as A+, A’s, B’s, C’s, and D’s – which will help you hone in on the most important referral sources in your business.
Here’s a picture of how I look at it:
First of all, we are all connected to a lot more people than we can all really focus in on via social networks…all of these people can have their “eyes” on you/your business BUT they’re not getting targeted directly in a relational, go deep, value-driven way.
An A+ is someone who has supported your business & given you so many referrals overtime that if you could – you’d perhaps send their family to Disney… 🙂
An A is someone who has sent you a referral or 2.
A B is someone who knows you’re in real estate & says they would send you a referral
A C is someone brand new to your database and/or someone who you’re not quite sure yet but they do still know you’re in real estate & said they would potentially refer you
And a D – these are people who need to be deleted from your target group. These are all the “other” people you’re friends with on Facebook & Instagram who you’re not going to spend intentional time on for now.
You first must know that none of this is set in stone. It is constantly ebbing & flowing BUT YOU have to be intentional. You have to have a system. You have to think of ways to be in front of your people (your A’s, B’s, C’s) on a regular & consistent basis and they have to constantly be reminded that “hey, my business is run by referrals from great people like you…so I’m never too busy for any of your referrals.” People don’t wake up in the morning with you in their minds – so we have to be planting those seeds to stay in the path of business…so that when they do come across someone they know who may be looking to buy or sell – your name is top of mind. Overall, you want to be so in touch with your people that C’s become B’s, B’s become A’s, and C’s even become D’s because they moved away OR they now have a best friend who’s in real estate.
Once you have your people figured out & have a pretty good understanding with how you’d qualify them – the next steps are to set a plan to be in front of them > set up coffees to get them face-to-face & have conversations with them…there are 2 really great dialogues within the Buffini system that I’d highly recommend learning about & having in your repertoire…the Mayor Campaign and the Big 3 Dialogue. As you’re having these conversations you’re also providing value that will up your “competence” in real estate in the eyes of that person AND build on your relational character….this all helps build trust with your people. The suggested ratio of items of value is about 70% on the competence and 30% on the character. So what can you do to SHOW you know the market & can help them/others with their real estate needs.
Working by referral – when done right – will eventually look like this…
Your sorted & qualified database that is constantly getting looked at & updated will become the greatest source for your leads in your business > i.e. your sales funnel. As people are working with us (whether they were already in our database originally or not) get to experience our expertise & competence through a remarkable experience throughout the actual process or buying or selling a home & then they become some of our biggest advocates. Do you see how this can create a constant & never-ending flow in your business?
We believe that working by referral is THE foundational key to building a long-lasting/sustainable real estate business. It may take more time to see some results in this manner – but it is the key to survival in any kind of market.
Before real estate, I was a 2nd-grade teacher. I have had my license since 2014 and am now the Agent Development Director with Century 21 Signature Real Estate. I feel blessed to do what I do every day because I truly enjoy helping agents build their real estate businesses.
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