Part 4: Want More Leads? Focus on Referrals!

When it comes to technology and the real estate agents, I believe agents want to use technology to its fullest extent to serve customers better and in the most cost-efficient way. But they have been overrun by technology.

Some real estate agents are are searching for a technique, tool, software or system that will eliminate the task of prospecting, when in fact it will only eliminate prospects. It's time to get back in touch with some real, fundamental principles about the reality of prospecting.

Tip #4: Generate more referrals

According to the NATIONAL ASSOCIATION OF REALTORS®, 67 percent of listings are the result of friends, relatives or past clients?—all sources that can be mined from one method: a referral system. The people in your database must hear from you on a regular basis through a thoughtful mix of mail, telephone, email and personal contact. Even if none of them ever lists a house with you, they will refer you to someone who will.

You also have other sources for referrals: a group of "A" people, acquaintances and business associates you know fairly well, and "bird dogs." Bird dogs are people in the neighborhood who always seem to know who's moving and are willing to tell you about them. These people are worthy of personal contact, lunches and thank-you gifts. Even if you're new to real estate, you're not new to life and have a sphere of influence that you can tap.

You must have all these names organized into a contact management software program so you can automate your prospecting activity. Set next call dates to automatically remind you when to follow up. Have letter templates that can mail merge letters. You can start with prepared letters, such as Dave Beson's Letterwriter (800.242.3031), then tailor them to fit.

Once your prospecting works and you have a prospect on the phone, you're back to your questioning skills, selling skills and scripts.

When asking for referrals, there are two mistakes agents make. The first is asking, "Do you know of anyone who is moving?" It's a closed question, and few will know of anyone moving right now. A better way to ask is, "In your opinion, who of your (friends, associates, etc.) will be the next to move? You have a better chance of at least getting a name to contact. Another technique is to ask, "The market is very active and I'd like to expose others to it. Who do you think I should be calling?"

The second mistake is to say, "If you hear of anyone, please call me." It's not their responsibility to call you. You must ask for names, then take the initiative to make the calls yourself. Get names, then you follow up. An exception to this is the leveraged referral, when you have your source person make the call to the prospect. After this introduction you can follow up.

When you do get the name of someone to contact, ask them, "Would you mind if I contacted them to introduce myself?" and "May I tell them you suggested that I call?" Make a commitment today to contact your referral base regularly. Follow up your phone calls or personal visits with a handwritten note.

• Want to Start Effectively Prospecting?
• What are You Building? Relationships or Barriers?
• Looking to Improve Your Prospecting Skills? Be There!