We are told that the top 10 per cent of salespeople achieve around 65 per cent or more of their work via repeat and referral business – so isn't this where property managers should be focusing their energy too?
When I talk about referrals in conversation or to any audience, everyone always agrees they are great to receive and that they guarantee almost 100 per cent conversion and generally at the full price or commission.
While most businesses and property managers understand and value the concept of referrals, it is now time for a paradigm shift in thinking – instead of feeling it is ‘rather nice’ when a referral ‘comes along’, how about the concept of actually controlling referrals and setting targets for them. Is that possible?
Yes, it is – and once you embrace the concept, it will put you head and shoulders above your competitors.
Jim Reitzel is a realtor from Canada who is in the top 1 per cent in North America. I've known Jim for more than 10 years, and many years ago he shared with me that he had achieved 250 personal sales referrals in the previous year. That was astounding in itself, but what really grabbed my attention was when he informed me that his target for the year ahead was 300.
Wow, the concept of targeting for referrals – this is something new and exciting. Over the next few years I watched Jim first achieve his target of 300, then onto 400 and finally over 500 referrals.
I even brought him over here to Australia to speak at a conference I ran in 2006 to tell the audience exactly what he does.
Jim's total focus is on referrals and everything he does is always focused on the customer, not himself.
Now, like lots of other salespeople or offices, he does things that endear his clients to him (while this is talking about sales, the same principle applies to property management):
- like sending them batteries for their smoke alarms each year “to keep you and your family safe"
- like giving them a voucher for a meal for two on their wedding anniversary or special event/birthday each year – and more
- at his annual family event, complete with music, rides for the kids, food and drink, etc, one of the attendees can win $1,000 – but they are only eligible if they have referred him and his business throughout the year.
Add to this yourself:
- having a cheese and wine night for property investors
- having a cheese and wine night for tenants – if looked after properly, they could become purchasers and then property investors. This can have a great impact – at one such event one tenant was in tears, saying that no one had ever done anything like that for her before. Apart from anything else, isn't that absolutely going to guarantee she will always be an exemplary tenant?
But where does the targeting come in? If you were speaking regularly to all your customers, do you think it would be feasible that each one might be able to give you just one referral over a 12-month period? I don't believe I've ever had a person in an audience that hasn't thought that is totally possible.
So, do you realise what we have just done? We have now set a target of one referral per customer per year. Now it's a case of arithmetic – the number of customers you have equals the target for your referrals that year.
This applies totally to property management, where you are targeting your ‘landlords’ (property owners/investors).
Let's make it easy and set up a spreadsheet, with the names of all your property investors in the first column.
Now determine a time period for regular contact – let's say, in this case, every three months. Now there are four columns per year to be checked when interactive conversation has taken place.
Now comes the first major step. When I ask my audiences if they ask all their customers for referrals on a regular basis, almost invariably the answer is ‘no’. They don't have a consistent organised program to do so.
Every three months, during their conversation with the customer, they are going to ask them if they can refer someone who might be looking to buy/sell/rent or invest. The law of averages says that this will generate business merely by asking the right question at the right time for some.
Now, just asking "can you refer someone" is too broad a statement, since they often know so many people that it is hard to get their heads around.
So, break the referral groups into sectors such as:
- family and relatives
- business colleagues and contacts
- social, sporting and school contact
This way, by breaking it into the smaller groups it much easier for them to virtually put faces with names and you will find your response factor increases dramatically.
What follows now is a basic sample of the spreadsheet you can put together (including notation of relevant information/news articles you have sent them, to keep them informed constantly) and you can elaborate with way more columns, that work best for you.
So now, each three months, the columns on your spreadsheet could be:
- meaningful contact made
- asked for referral
- received referral: Y/N
- thanked them for the referral
- business concluded as a result of the referral: Y/N
- rewarded them for the referral
As you can see, the last entry means you are going to set up a reward system so they receive something tangible for every referral, and this could grow in value depending on the number of referrals they give you.
Obviously, they are not going to refer you if they don't like or trust you, so ensure your customer service is 100 per cent. Then, by following these simple tips, you are now on your way to targeting and managing referrals – which most businesses don't do, thereby leaving your competitors far behind.