With so much attention and resources focusing on social media and other marketing channels to find buyer and sellers, it’s easy to lose sight on the value of word of mouth referrals. But word of mouth referrals are still a big source of an agent’s income.
Word of mouth marketing is essentially free. It’s a reward for the hard work you do to satisfy the clients you serve. When you serve clients well and meet or exceed their expectations, they are more likely to refer you to their friends and family.
Nearly forty percent of Realtor referrals were from the family and friends of buyers and sellers, according to the 2014 Profiles of Buyers and Sellers by the National Association of Realtors® (NAR). In fact, buyers and sellers are twice as likely to find their real estate agent through word of mouth as using the same agent they had worked with in the past. With that in mind, earning repeat business is not enough. You have to work even harder to increase the likelihood your client will want to refer you to their family, friends and colleagues.
Prompt and courteous communication opens the door to more word of mouth referrals. Unfortunately, not all agents return phone calls or emails in a timely manner. Since you never really know whether the message or email is from a word of mouth referral, agents who do not respond quickly could be missing out on a large source of additional income. Also, it could jeopardize the relationship you built with the client who referred their friend to you which in turn will decrease the chance for repeat business. So, it’s like a double-whammy. That’s why prompt communication is such an essential part of a Realtors job.
When a seller finds a real estate agent through word of mouth, seventy percent of them are not contacting other agents. Unlike other marketing channels where you’re competing with other agents, with a word of mouth referral you have the client’s undivided attention. That’s what makes word of mouth referrals so valuable.
It’s important to keep in mind that the potential lifetime value of a client far exceeds the commission you will earn on a single transaction. And each client is a potential source of virtually unlimited word of mouth referrals that will continue throughout your real estate career.