Provided By Realty Times
Written By Jennifer Allan
Most real estate prospecting strategies focus on the pursuit of business, or going out there and actively looking for targets to prospect. Fair enough.
But you can also generate a significant amount of business for yourself using attraction-based strategies that don't require you to pursue anyone. Imagine, a business where good prospects come to you looking for help. Doesn't that sound like fun?
If you love being a real estate agent and you know your market, you can attract business left and right, as long as you're out there in the world with your antenna up and a smile on your face. You don't need to shove your business card at everyone you meet, or dazzle them with a fantastic elevator speech. If your enthusiasm and expertise shine through in your casual conversations, the people you know and the people you meet will want to do business with you, if they have business to do.
The trick to an attraction-based real estate business is to always be doing a couple of things.
First, always be mastering your market. The more intelligently you can speak about the local real estate market, the more magnetic you'll be when you're talking to people. For example, when you're invited to a party, try to check out the market in the area of the party ahead of time. That way when you're mingling at the party and real estate comes up, you can talk about "that house down the block that's been on the market for 9 months," and you'll know why it hasn't sold. You'll also know about the one around the corner that just came on the market last week. Even if you don't use the knowledge you obtained during your pre-party previewing, karma seems to work with you and will put you in a position to use it soon.
Seriously, a real estate agent who knows his market exudes a confidence that will draw people to him.
Second, you should always be looking for opportunities to put your smiling face and your market expertise in front of other people. Now when I say this, I don't mean that you should make a nuisance out of yourself in public on a regular basis. Do that and you might find yourself avoided. Instead, open up room in your calendar for casual socializing. Accept invitations you might normally decline. Make a concerted effort to go to lunch with friends two or three times a week. Pick up the phone to ask a friend a question instead of shooting off an email. Go into the bank instead of through the drive-thru lane.
Every single person you meet every single day has the potential to bring you a paycheck. And you have no idea who that person will be. It could be your mailman, your hairdresser, or your dog-sitter. It could be the lady you sat next to at the nail salon. Every time you venture out into the world with your antenna up and a smile on your face, you could meet your next biggest client.
But, that probably won't happen if when you venture out into the world you don't come across to people as someone who loves and is good at their job. And that's not the impression you leave when you're always in sales-pitch mode. So, leave the sales pitch at home, focus on being a great real estate agent who loves her job and knows her market and stays in touch with the people she knows without ever pestering them for business and referrals. I think you'll find that you'll attract far more business than you have in the past, and have a heck of a lot more fun doing it.
Showing posts with label referrrals. Show all posts
Showing posts with label referrrals. Show all posts
Tuesday, July 13, 2010
Friday, June 19, 2009
Referral Reward Programs and Referral Likelihood
by Suzanne Blake, M.B.A. Candidate
How can referrals affect your business positively? Conversely, what is the significance of the damage they can inflict? Referral reward programs can play a considerable role in establishing the effectiveness or ineffectiveness of referrals. In A Penny for Your Thoughts: Referral Reward Programs and Referral Likelihood, L. Feick and G. Ryu conducted a study in which they did four experiments to determine the impact that reward programs have on referrals. Their findings show that reward programs do matter; furthermore, brand strength, personal ties, and the person receiving the reward all have an impact on the effectiveness of the reward. As word-of-mouth (WOM) advertising can be a particularly difficult method to implement and measure, this article provides some very useful information that may assist in establishing effective WOM advertising. Please note, the industry studied here was not real estate, though the core findings will still be relevant to your field. The results of this research should not be applied blindly, but with serious thought as to how they might be relevant in your particular market. Specific types of marketing media, measures of time, and percentages should be altered to fit your industry.
1. "Consumers consider the value of potential cost for themselves and for the other consumer in rewarded referral."
THINK: Approach rewarded referrals from the perspective of the buyer rather than that of the seller. Think about what the rewards and benefits are for the home owner when s/he makes a recommendation. According to exchange theory, consumers will make a decision to provide a referral based on what's in it for themselves. Looking at rewarded referrals from this point of view will assist real estate agents in determining how to reward referrals.
2. "With strong ties, people tend to have communal relationships in which they feel general concern about the other person's welfare. They respond to the other's needs but do not expect anything in return... With weak ties, reciprocity is important; people expect to get back what they put in."
THINK: With this in mind, it makes sense that people would naturally refer close friends and family. However, to go out of their way to refer a more distant acquaintance, they may need some incentive or expect to get something out of the referral. If real estate agents can focus their rewards on those weaker relationships, they may have referrals that would not have occurred organically.
3. "Research shows that consumers respond to stronger and weaker brands differently." "[The] stronger commitment gives consumers of a stronger brand more confidence in making recommendations, thus increasing (unrewarded) referral likelihood."
THINK: When working with a strong realtor name brand, the agent should focus on the quality and prestige associated with that brand as it will help increase referrals. This methodology would also apply to a real estate agent who is well-established in the industry. By focusing on his/her proven track record, s/he will be able to generate more referrals. On the other hand, when working with lesser-known brands or when working as a new, lesser known real estate agent, rewards may be much more crucial to realizing positive referrals.
4. "Offering a reward increased referral likelihood by more than 20 percentage points for the weaker brand but by less than 10 percentage points for the stronger brand."
THINK: This experiment shows the validity of the previous point that reward incentives are more important for weaker brands or lesser known realtors than for strong brand names. The efforts of rewards programs have a greater magnitude when used by weaker brands.
5. "The first referrals from a customer will probably be family or close friends for whom the recommendation is likely to have occurred anyway. It is probably subsequent referrals, presumably weaker ties, that need encouragement."
THINK: This supports the second point that rewards should be focused on weaker tie relationships. According to the article, one way this can be realized is to offer rewards of higher value as referrals increase. Home buyers would be most likely to refer family members or very close friends first. A reward of greater value may be necessary to extend their recommendations to more distant friends.
6. "Making a referral without any extrinsic reward may create feelings of inequity for a customer; the referral is an unreciprocated favor done for the consumer and the company."
THINK: Rewarded referrals may not just be an added benefit to business. In fact, it may be advisable to think of rewarded referrals as a necessary part of doing business. In order to establish beneficial long-term relationships, people need to feel that there is balance in the relationship. Rewarding referrals is one way to establish this balance in the proverbial "bank of favors."
How can referrals affect your business positively? Conversely, what is the significance of the damage they can inflict? Referral reward programs can play a considerable role in establishing the effectiveness or ineffectiveness of referrals. In A Penny for Your Thoughts: Referral Reward Programs and Referral Likelihood, L. Feick and G. Ryu conducted a study in which they did four experiments to determine the impact that reward programs have on referrals. Their findings show that reward programs do matter; furthermore, brand strength, personal ties, and the person receiving the reward all have an impact on the effectiveness of the reward. As word-of-mouth (WOM) advertising can be a particularly difficult method to implement and measure, this article provides some very useful information that may assist in establishing effective WOM advertising. Please note, the industry studied here was not real estate, though the core findings will still be relevant to your field. The results of this research should not be applied blindly, but with serious thought as to how they might be relevant in your particular market. Specific types of marketing media, measures of time, and percentages should be altered to fit your industry.
1. "Consumers consider the value of potential cost for themselves and for the other consumer in rewarded referral."
THINK: Approach rewarded referrals from the perspective of the buyer rather than that of the seller. Think about what the rewards and benefits are for the home owner when s/he makes a recommendation. According to exchange theory, consumers will make a decision to provide a referral based on what's in it for themselves. Looking at rewarded referrals from this point of view will assist real estate agents in determining how to reward referrals.
2. "With strong ties, people tend to have communal relationships in which they feel general concern about the other person's welfare. They respond to the other's needs but do not expect anything in return... With weak ties, reciprocity is important; people expect to get back what they put in."
THINK: With this in mind, it makes sense that people would naturally refer close friends and family. However, to go out of their way to refer a more distant acquaintance, they may need some incentive or expect to get something out of the referral. If real estate agents can focus their rewards on those weaker relationships, they may have referrals that would not have occurred organically.
3. "Research shows that consumers respond to stronger and weaker brands differently." "[The] stronger commitment gives consumers of a stronger brand more confidence in making recommendations, thus increasing (unrewarded) referral likelihood."
THINK: When working with a strong realtor name brand, the agent should focus on the quality and prestige associated with that brand as it will help increase referrals. This methodology would also apply to a real estate agent who is well-established in the industry. By focusing on his/her proven track record, s/he will be able to generate more referrals. On the other hand, when working with lesser-known brands or when working as a new, lesser known real estate agent, rewards may be much more crucial to realizing positive referrals.
4. "Offering a reward increased referral likelihood by more than 20 percentage points for the weaker brand but by less than 10 percentage points for the stronger brand."
THINK: This experiment shows the validity of the previous point that reward incentives are more important for weaker brands or lesser known realtors than for strong brand names. The efforts of rewards programs have a greater magnitude when used by weaker brands.
5. "The first referrals from a customer will probably be family or close friends for whom the recommendation is likely to have occurred anyway. It is probably subsequent referrals, presumably weaker ties, that need encouragement."
THINK: This supports the second point that rewards should be focused on weaker tie relationships. According to the article, one way this can be realized is to offer rewards of higher value as referrals increase. Home buyers would be most likely to refer family members or very close friends first. A reward of greater value may be necessary to extend their recommendations to more distant friends.
6. "Making a referral without any extrinsic reward may create feelings of inequity for a customer; the referral is an unreciprocated favor done for the consumer and the company."
THINK: Rewarded referrals may not just be an added benefit to business. In fact, it may be advisable to think of rewarded referrals as a necessary part of doing business. In order to establish beneficial long-term relationships, people need to feel that there is balance in the relationship. Rewarding referrals is one way to establish this balance in the proverbial "bank of favors."
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