I have two puzzles for you. Ready?
If Agent A has a database of 100 names of people from social networking or business cards who have never referred business to her, how many referrals do you think Agent A would receive if the database were increased to 1,000 names?
The correct answer is that she’ll receive referrals at about the same rate as you receive them from your own networking database. My guess is that is somewhere around 1 percent or less.
Here’s another puzzle.
Agent B just left a closing with a commission check in hand. The buyers said at the closing, "We have no complaints." In other words, they are a satisfied customer.
If Agent B generates five satisfied customers, how many referrals should he expect from these five customers? Again, the correct number is the number of referrals you have received from your satisfied customers. My guess is that this number will be around "none."
So far we have eliminated networking and satisfied customers as productive sources of real business.
This leaves only one group. This is that large group of agents who work by "referral only" and are making more sales than anyone else in the office.
What they are really doing is working by "relationship only," and we need to start calling it that. These agents are hard to meet, because they are either listing or showing a home, making a bank deposit or traveling somewhere out of the country.
Although we describe these agents as working by "referral," that doesn’t really describe how they are landing all this business. The way they are working is by "recommendation" — very enthusiastic recommendations based on high-trust relationships.
Satisfied customers do not refer or recommend. They may mention that you did a good job for them, but they won’t lose any sleep if their friends use another agent.
Your enthusiastic customers will lose sleep over that prospect. They cannot imagine anyone buying or listing real estate with anyone but you.
They do not refer their friends to you. They highly recommend you.
Why? Because they absolutely, 100 percent trust you to do the same thing for their friends that you did for them — exceed their expectations.
Let’s say, for example, that your last seller was asked how he liked your services. The seller says, "No complaints."
Would you put that quote from a satisfied customer on your website as an endorsement of your services? Neither would I. After all, that’s the minimum any of our customers should expect, right? But at least they are "satisfied."
What if your seller answered this way instead:
"Are you thinking about listing your home? The only Realtor to list with is Agent A. She just listed and sold my home. She communicated clearly and often, and did everything she said she would do to help me get the highest possible price for my home. I would, without hesitation, recommend Agent A to anyone thinking of listing his or her home."
Is there any higher level of trust possible? I don’t think so.
If recommendations come from ENTHUSIASTIC customers, the question then becomes, "How do they become enthusiastic?"
The answer: They get better service than they expected.
If this makes sense, make note to always underpromise and overdeliver.
Which brings me to the flashing caution sign we speed by on the way to our next networking meeting.
Networking is important. It’s fun. We are totally comfortable selling our wonderful selves to each other.
Mark Goldstein, president of the Central Florida Christian Chamber of Commerce, says the idea of networking "is to connect with as many people as possible who will need and want your product or service or who will introduce you to others who will."
The problem, he says, is that "most of the people attending these meetings or who are actively using social media are not networking to buy anything. They came to sell."
Goldstein has nothing but praise for networking events — if you go for the right reason.
In fact, he leads one that meets on a regular basis, but its purpose is not networking, per se. Its purpose is relationship building. Goldstein believes networkers should remember what Zig Ziglar says: "You can have everything in life you want if you just help enough other people get what they want."
Since no one attends networking events to buy, don’t try to sell. People refer people they know, but they recommend people they trust.
Goldstein recommends these steps:
1. Think "relationship," not "networking."
2. Use networking events as opportunities to identify people you want to meet again and get to know better, and explore ways you can bring value to them either professionally or personally.
3. Use social media as an opportunity to present helpful tips and become known as a problem solver.
4. When you meet with people, ask questions and take a genuine interest in their stories.
5. Remember, people spend millions of dollars going to counselors with whom they can just talk and the counselor will listen. Just listen to people and you will gain their friendship, confidence and trust.
"No one in their right mind would risk burning relationship collateral by recommending, much less referring, someone with whom the extent of the relationship is having their business card," Goldstein said. "The only way to get to know someone is to spend time with them to build a relationship."
"Referrals may get you in the door, but recommendations put money in your pocket," Goldstein said.
And that may well be the missing piece to the puzzle as to why you are not getting more referrals or recommendations. Is it?
