Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine. She can be reached at email@example.com.
Expand Your Network, Increase Your Referrals
Stop working so hard! Learn how to get others to start bringing more business your way through a professional network that includes some unexpected professionals all coming together for the sake of swapping referrals.
July 18, 2011
Maybe divorce attorneys, insurance agents, carpet cleaners, and locksmiths aren’t the people you typically think about when building your network. But if you’re looking to expand your referral base, you might want to reconsider whom you’re swapping business cards with, because you might be leaving some important business leads out.
Certainly, you know the benefits of having a vast network of other real estate professionals and the flow of referrals it can bring — not to mention the referral fees that can come with it. But beyond sales associates, who else is in your professional network? Sure, lenders and title companies make good networking buddies. But you may be missing opportunities if you stop there.
Building alliances with other businesses and service providers in your community can quickly expand your referral base and get more leads flying your way. Here, real estate experts share their secrets.
Join a Networking Group or Start Your Own
Dominic Cardone, ABR®, GREEN, a broker with Keller Williams Real Estate in Media, Penn., estimates that 40 percent of his business’s referrals come from his involvement in a business networking group called Business Networking International, which connects him with other small businesses and service providers in his community.
He meets weekly with his local BNI chapter, which includes representatives from about 30 businesses, from an accountant to an electrician to a doctor and lawyer. The main purpose is to exchange business referrals with one another.
BNI chapters are found nationwide. LeTip is a similar national networking group. Other real estate pros also say they find networking opportunities to connect with other business professionals through their local Chamber of Commerce events or even through the Small Business Administration.
Debra Allen, ABR, GRI, with Prudential Arizona Properties in Gilbert, Ariz., joined a local networking group — the AZ Power Networking-Southeast Valley Business Connection — and has seen her referrals grow too. She meets once a month for a social hour event with the group to exchange business referrals. The group includes home inspectors, a locksmith, a handyman, and other trade professionals.
She also has a network of parents through her children’s football team and her church. “I tell them what I do and ask them what they do, so if I ever had a referral for them, I would gladly send it their way,” Allen says.
TIP: Go beyond just a business card exchange when networking. Get to know the person and what she does, and make sure she knows all about you and what differentiates you too. You want them to be able to “sell” you to their clients, too.
Regardless of whether you join a formal networking group or approach networking your own way, you want to have some strategy behind the connections you’re making. Dan Carrillo refers to this as a “strategic partners” business model, which he highlighted during a recent talk on the National Association of Hispanic Real Estate Professionals’ radio show. Instead of just bumping into others and swapping business cards, Carrillo, a managing partner of the Gonzales Group and an expert on the multicultural real estate market, stressed the importance of having a strategy behind your networking to make sure you’re making the right connections.
Carrillo breaks “strategic partners” into three categories:
1. Influencers: Individuals or companies that can bring you referrals and leads, and vice versa. These individuals influence the same target audience as you do. (Examples include financial planners, tax service providers, and — if your target is the Latino market, for example — immigration attorneys.)
2. Service providers: Individuals and companies that bring auxiliary services in a real estate transaction. These partnerships often revolve around the transaction itself. (Examples include home inspectors, pest exterminators, lenders, and staging professionals.)
3. Affinity partners: Companies with which you arrange formal relationships with so you can be considered the “provider of choice”; these arrangements usually require a competitive process. (Examples include credit unions, hospitals, and medical centers — which sometimes have initiatives to promote quality housing for good health — or community redevelopment programs that may be looking for partners to offer relocation assistance.)
The key is to make sure you’re aligning with someone who shares the same value propositions as you, according to the Gonzales Group, which provides resources and products for real estate brokerages and individuals that aim to help increase sales and implement more effective business strategies.
So what influencers, service providers, and affinity partners should you target in your market? Consider the following:
• What customer segment are you targeting in your business (such as first-time home buyers, Latino market, etc.)?
• What are the key resources your customer segment needs?
• What local businesses in your area are also targeting that same customer and providing these resources to them?
• What is the reputation of those businesses? When aligning with others, you want to make sure to do your homework: Check their references, the Better Business Bureau, and Google to see what customers are saying about them. You don’t want to risk recommending a professional to your client who doesn’t provide quality service — it’ll reflect poorly on you.
Don’t Break the Rules
Besides making sure that you are recommending professionals who provide quality service to clients, you also want to make sure your partnership agreements don’t overstep any rules. Remember, Section 8 of the Real Estate Settlement Procedures Act (RESPA) “prohibits anyone from giving or accepting a fee, kickback, or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan.” (Read more.)
Exploit Your Network!
Expanding your network isn’t just for generating referrals. It also serves as a smart marketing strategy for getting past clients coming back to you.
Carol Lee Cikanek, ABR, with Coldwell Banker’s Hinsdale Village Office in Hinsdale, Ill., makes a point to promote her referral network to her clients so they know her as a go-to resource who can connect them with local experts in various fields, whether it’s getting a free consultation with an architect for her clients who want to remodel a home or talking with the city’s building commissioner on whether a fence is allowed in an area. In her newsletters to past clients, she’ll include reminders that she’s connected nationally and internationally and can personally handle their referrals.
“I go out of the way to advertise that. Otherwise, no one would know,” she says. “It’s all part of building relationships. Those people remember you and, when they run into people who need help, it’s your name they’ll throw out.”