My friend, Brian, was born into real estate. His father created a very large, and successful, Prudential operation which included mortgage, title, etc. So naturally, when Brian graduated from Villanova University, he joined his family's business. Before long he was making a great income. Being such a young man, he really thought he had the world in the palm of his hand. But something kept gnawing at him. Brian watched as both his father and brother had stress-induced heart attacks. He wondered if his fate was to be he same as theirs.
Like
a lot of people in real estate, Brian thought he had freedom. And, in
a way, he did. Among many other benefits, he didn't have to punch a
clock or sit in a cubicle. But what really bothered him was that he
was always working. And if he stopped working his income would stop too.
It didn't take long for the reality to sink in; he was a slave to
his clients. He calls the life of a real estate professional a
treadmill, repeatedly doing the same things with no end in sight.
Brian says the pattern he has observed, over-and-over, is that the
treadmill eventually wears out even the most ambitious of people.
Not
wanting to destroy his health, from the stress of the treadmill, Brian's
mind was open to alternatives. Several years back Brian started
working with my company because we have a phenomenal product. Better
yet, we pay our people on a recurring revenue model. That is to say,
the income is completely passive when you do it right. So, Brian went
to work. By his second year he was making some very significant income. Indeed, he was making enough money to walk away from the
family business. To date Brian has made many millions of dollars. But
the best part is, unlike real estate, the money keeps rolling in,
whether he works or not.
Stress
is no longer a part of his life and his health has been preserved.
Brian also happens to be a single father and he just loves that he's
now able to attend all of his son's functions. So, if you know of any
sharp and fun real estate professionals, who might be ready to get
off the treadmill, and get on with a life, please have them contact
me. I can show them how to earn more and work less. My number is
(949)630-2797.
Would
like to work strictly off referral? I think most salespeople would.
The good news is it can happen. But it takes a while. In fact, some
people are so committed to working only referrals that their income
suffers tremendously. Here's a startling fact, research has suggested
that asking for referrals just doesn't work. It's one of the ironies
of life, we get the most referrals when we don't ask for them. So
what can you do?
Well,
let me tell you a story about a man named Bill Good. Good was managing his sales
crew when, one July, he decided to take an audit of their performance.
He found that 30-40% of all the company's business was coming from
referrals. Naturally, he figured the obvious goal must be to get more
referrals! So he came up with, “Ten Referral Questions,” to teach
his salespeople to get more referrals, and hopefully save money on
his direct mail expenses. The result? Sales began to fall in August
and continued to plummet into September. It was then that he became
probably the first sales manager in history to tell his guys, “Quit
asking for referrals.”
What had
happened? Well, in the couple months that Good had his team asking
for referrals they had generated 503 referrals in total. He searched
and discovered that those 503 referrals turned into a grand total of
three sales. That's a closing ratio of 0.5%. Meanwhile, they were
closing about one out of eight direct mail leads or about 12.5%. In
essence, a referred named was no more likely to close than a cold
name. Asking for referrals was killing his business!
One of
the keys to understanding this situation is to understand the nature
of those referrals. The 30-40% of his business that was from referral
came from unsolicited referrals. He discovered that when
people use, “Who do you know?” type questions the names they get
are no better than a cold name. In other words, a solicited referral
is about as valuable as any random name.
Good
says that your clients want to help but just don’t know anybody at
the moment who needs your service. And the clients don't want to turn
a salesperson loose on friends or associates who do not need your
service.
So, what's the solution? Maybe we could promote referrals not solicit them. Good
references research released by Julie Littlechild, the president of
Advisor Impact. Ms. Littlechild's team asked clients about the last
time they had given a referral and only 2% said it was because the
salesperson asked for it.
When
asked why they refer 58% referred for reciprocity, 38% to help a
friend, and 4% for another reason. This means that the client likes
referring people to you as a thank you but don't do it when you ask
(you put them on the spot). Now, have we gotten any closer to a solution?
Good
used to say, in his books, that we should promote referrals. But he has
changed that, a little, in
recent times to; induce
referrals. What
does that mean? Bill says to, “Continually
educate clients to recognize referral opportunities and gently and
persistently remind them their referrals are valued and accepted.”
What
both Good and Littlechild are saying is the best way to get referrals
is to tell benefit-laden stories about your service that will ring a
bell when the time is right. In order to do this, of course, you will
need to know what you're looking for. If you haven't already, please
take the time to clarify who your target market is. It will make this
process (and sales in general) a hell of a lot easier.
So
let me give you an example. Let's say you recently helped a growing family
find a bigger home. Tell the story of that experience, to your clients, and ask that if they ever know of any families that are growing to
please let you know. Of course, you can't just tell them once,
repetition is important. It is suggested that you try to tell a
referral-seeking story every time you interact with the client. The
story, and the benefits it contains, can vary widely. But the idea is
that the story will stick, a lot better, with your clients than to simply say,
“If you know anyone who needs a realtor, let me know.” Or the dreaded, "I appreciate your referrals." Yikes!
