width=312Don't just sit back and wait for referrals, says marketing and digital tech coach John Jantsch. Reach out to other businesses and provide useful tools that showcase your expertise. 

In your book, The Referral Engine: Teaching Your Business to Market Itself (Penguin, 2010), you say that most people make referrals as a form of survival.

JANTSCH: We thought people did so to be helpful. Being helpful is a big part of why people make referrals. The desire to help is a strong psychological driver. But many feel the need as part of building up their social capital for the time when they seek a favor in return.

People trust recommendations from friends, family, colleagues, and even strangers over ads from faceless companies. Does that mean that real estate companies can cut marketing budgets?

JANTSCH: I'm not saying it's always one or the other. Ads and other lead-generation tactics have a place because they create awareness that may start the process, but you need the trust that comes with recommendations, including those from online review sites, to turn awareness into contacts.

How is the social media world impacting referral business?

JANTSCH: You can build relationships faster by employing online tools that allow you to get deeper insight into who your home buyers are. That said, we all know that customers often don't buy online. They depend on personal relationships with salespeople. Referrals should reflect this combination of high-tech and high-touch.

You say successful referrals involve understanding the customer referral cycle. Can you explain how that works?

JANTSCH: There's a logical path that you must lead people down for them to develop the level of trust required to convert them to referral sources. If you miss one or more steps-know, like, trust, try, buy, repeat, and refer-you risk creating gaps in the experience that might lead to lukewarm referral motivation. When we talk about the try component, for example, we're referring to a way that someone can experience your service or expertise. In real estate, this might come from educational workshops.

Have you seen real estate professionals put this cycle into action?

JANTSCH: I worked with an agent who developed a network of home-service providers her buyers and sellers needed. She would even help people who didn't hire her to find contractors. And she did video interviews with providers in her network and allowed them to create home repair tips and content for her blog and newsletters. Her team of contractors became her No. 1 source of referrals. Through them, she often learned about people intending to sell their home.

What's the best way to build a network that encourages referrals?

JANTSCH: Become known as a person who makes referrals. Pay attention to bankers, insurance agents, and contractors, with an eye toward creating mutually beneficial relationships. Think of ways that you can provide value to them by showcasing their products and services or delivering educational content to their customers.

Any don'ts that kill referrals?

JANTSCH: Don't wait until after the sale to introduce the idea of referrals. Talk about it up front, perform as promised, and tell customers you'd like to work with them after the sale to identify others who need the same level of service.