Any referral based business will be more successful than its counterparts. Instead of spending time and money on advertising, referrals can give you a constant stream of leads with little to no monetary investment. This allows you to focus on areas that will really help grow your business. Getting to that point isn’t easy, however. You have to put yourself out there and meet people every day. There will be times when you want to give up, but if you fight through you will start to see the results. One deal can often lead to a handful of new contacts that can jumpstart your business. If a referral based business is your goal, there are a few steps you need to follow.
- Ask for referrals: It is amazing how many people in business never ask for referrals. They spend weeks working together to close a deal, only to go their separate ways. Everyone you meet is a chance to develop a relationship. Once you feel comfortable enough, you should ask how you can grow your business together. More often than not, they will have access to leads or deals and – just waiting for the right person to come along. Some referral sources will take time to develop. If you are in business, you should be asking for a referral. If you don’t, you are missing out on the best chance to grow your business.
- Start with people closest to you: There is the potential to make several new connections in every deal. Two attorneys, two realtors, a mortgage broker and appraisers are all contacts that should be targeted. If you close six deals a year, you should have a minimum of thirty people directly in the business that you can reach out to. This doesn’t take into account the people you meet at networking events or know from your personal life. If you have worked with someone on a deal, you have already crossed the biggest hurdle. Most people want to gain experience with others first before they feel comfortable enough to refer others. It is important to strike while the iron is hot and reach out as soon as the deal closes. A follow up call or email to set up a quick lunch meeting will go a long way. Instead of making small talk have the track record to back it up. Your closest contacts should be your bread and butter referral source.
- Offer something in return: When you offer something it doesn’t mean you are giving away the farm. It could be something as simple as an assurance that you are going to close when you say you will. It could mean giving a lead back that isn’t a good fit for you. It can also mean a gift certificate or something else of small value. If the referral stream is one way, there may be some resentment on their end. Every time you get a deal that closes, you need to do something in return. Whatever you agree to give in return, you need to make sure you do it every time. Even if you have closed a dozen deals, you need to constantly offer something in return. The minute you take the referral source for granted, it will stop coming.
- Indirect sources of referrals: Focusing on sellers you have worked with may be a waste of time. Even if you did everything right, they may not know anyone that needs to sell to an investor. Instead, you should focus on people in your business that find deals. Wholesalers, mortgage brokers and specialized attorneys are all great lead sources. Reach out to them and explain how you do things. Many times all they want is for the deal to close. If you can provide them with a track record and some references, it may be enough. This is a much cheaper method of generating business than advertising. It will take some time and the ability to sell yourself, but it can be much more effective.
- Show your personality: People in business like to work with people they like or feel can get the job done. Little things go a long way in generating referrals. Placing a follow up call to thank your lead source is important. Showing your appreciation will make you easier to remember. Little things like knowing peoples’ names and remembering something about their personal life can cement a relationship. You don’t have to be business all the time. If you can show others some of your personality they will feel as if they know you. That personal touch goes a long way in how many referrals you end up getting.
It doesn’t take much to grow your referral base. What you will find is that it is the little things that make a difference. Asking for a referral doesn’t take much, but it is rarely done. The same is the case with following up with people in your network and have worked with in the past. Some people will not give you the time of day, but the majority will be impressed. There is plenty of business out there if you are willing to go out and capture it. A strong referral base will take your business to the next level.