Referral marketing strategy

The Referral Marketing Strategy That Keeps You Top of Mind

If you want more real estate referrals, you need an effective referral marketing strategy to STOP letting people forget you’re in real estate! Before I show you how to avoid becoming the agent that is forgotten about by your friends and family, we have to go over a few things first.

The first place to start is by identifying and building a compilation full of people you don’t want to forget you’re in real estate. We call this your database.

This is one of the most simple concepts to understand that gets WAY overthunk (if that’s a word) by agents all over the place.  They say:

I don’t have a database…

I don’t know that many people…

I don’t want to bother my friends…

People know what I do for a living…

I don’t know how to build a database…

How am I going to get that many people’s information?

This is simple DO NOT MAKE IT COMPLICATED.  Your “Database” is nothing more than a collection of people you know or know of you.  This includes the following:

Your friends

YOUR BEST FRIENDS (yes they don’t know what you do for a living or remember it well enough to refer you business)

Your family

Your classmates

Your neighbors

Your kid’s friends parents (if you have kids)

Your past clients

Your Facebook’s friends

Any social media connections

I think you get the point. This is anyone who you know and they know you.

An Effect Referral Marketing Strategy Is Focused On Relationships

This is your database.  This collection of people is the #1 source for your real estate referral and repeat business whether you like it or not. You will not get referrals from people who do not know you, that would be weird.  Have you ever referred someone something you never experienced before?

Let’s look at it like this:

Do all of the people in any of the circles I mentioned above live somewhere? Assuming they do not live in a tree or a box, they are all future real estate clients.  More importantly they also have the ability to refer you to people they know who may need your services.

real estate marketing your database

Would you expect someone you had a relationship with to use you as their real estate agent if they were buying, selling, renting, or investing in real estate? Wouldn’t you expect that same person to also refer you to their friends and family?

Your Referral Marketing Strategy Needs To Be Focused On Relationships

The day you find out that someone you know bought or sold a house without you will be the day you might rethink your referral marketing strategy. It truly is a kick in the pants when that happens. If you would expect them to use you for any real estate service then they should be part of your database.  

However, they can only use you or refer you business when they remember what you do for a living! Comprehending the value of your relationships and/or putting these people into organized lists is the most important step in learning how to build a database.  

When you market this database consistently with an effective referral marketing strategy, you will start attracting referral and repeat business.   

OK, I get it, a Referral marketing strategy isn’t sexy is it?

It’s the most profitable and important type of marketing you will ever implement in your career, and if you want a long career in real estate, it’s a necessity!

A concept so many agents fail to understand is that you need to keep your marketing in front qualified relationships.  We are not farming a strange community, but we are farming your relationships.

It’s not about buying a list of names and numbers to market to.  If you do that, I am telling you right now, this is not going to work for you. We are marketing to our relationships, not farming strangers.  Remember what needs to take place.  These relationships have to like you to refer you.  If they don’t know you, how can they like you?

Referral marketing

Determining if you have a relationship worth marketing to comes down to a very simple test.  If you were at the grocery store and came across someone you know, you would stop and say hi to this person with a smile.  If that’s the type of relationship you have with them, they need to be r your marketing.

If you were at the same grocery store and saw someone you recognized and turned around and walked the other way so you did not have to say hi to them then you certainly do not need that person on any of your “lists”.  It’s not about the quantity, it’s all about the quality.


A Referral Marketing strategy is essential for being successful.  Did you know that an additional 23% of real estate agent business is based on repeat business?  Referral marketing also creates repeat business for you. In order to understand why you should invest in referral marketing you must first understand what it is.

referral statistics

The Value Of Each Relationship

How much is each person you have a relationship with worth to you?

The average person will buy 3-5 properties in their lifetime.  If each person you know buys 3 houses at an average sales price of $250,000 that equates to roughly $18,750.00 in total potential commissions just from a single relationship.  What is the average time someone remains in their house before they move in your market?

Referral marketing is about building an audience out of your current connections and keeping your name in front of that audience so that you are thought of when real estate comes to mind.  This is not rocket science. It really is that simple.

2 Types Of Clients From A Referral Marketing Strategy

Referrral Marketing creates two types of clients. The first type of client will be someone within who needs to lease, buy, or sell a property.  They contacted you because you were the first person they thought of when they needed a Realtor. If you stay in front of someone long enough you will be more than likely to become their natural choice for a real estate agent when the time comes.  It is inevitable that they will eventually move.

The second type of client you will receive from marketing your audience is someone who is referred to you. Imagine all of the possible referrals that take place amongst your audience on a daily basis.

How many opportunities do they come across to possibly refer you business?

You will learn shortly that your audience WANTS TO REFER you business.

referral stats

As you can see from the chart above, referrals and repeat business account for roughly 61% of all agent business.  The business already exists and is right in front of you.  You already know them.  Real estate is one of the few businesses that you can start with a built in client base because PEOPLE DO BUSINESS WITH AND REFER BUSINESS TO AGENTS THEY LIKE & TRUST. 

People may need our services every 5-7 years, but that does not mean lose touch with them and only pop up when they are in the market. Consistently marketing your relationships will make it less likely to be forgotten.

More importantly, marketing to our audience will encourage referrals for our services to their friends and family members.  This is fundamentally the most important concept to grasp for a real estate agent if you want your business to run on referrals and repeat business.

Facebook, Linked In, email, direct mail, and any other medium/platform you can think of serve as channels that allow us to communicate with our AUDIENCE consistently and stay on top of mind.

Real estate agents who embrace this concept and market their relationships will develop a consistent stream of business.  Do you think if you systematically marketed your audience 50-80 times a year that you would get more business?  I’m telling you that YES YOU WILL.

Understanding Why People WANT To Refer You Business

When people refer others to you, it is almost always because there is an ongoing conversation about real estate.  Suddenly, someone jumps in and says, “Hey, I know an agent, you have to call him/her.  They are great!”  Then, a referral is born.  The question everyone wants to know is: why did someone refer the client to that agent?

Your Referral marketing strategy is all about training your database to remember you when they are going to be needing assistance for a home or sharing your name with others they notice talking about real estate.

We as humans are genetically programmed to refer our friends, co-workers, and family to things we like.

Why do you think that is?

Everyone always “has a guy”.  Everyone always wants you to use “their guy”.  You can make a post on Facebook right now and ask for any type of service provider and people will respond with several of their “guys”, but the question is why do they care?  What’s in it for them?

People refer others when the following three things are present:

1.     They have to like the agent they are referring them to;

2.     They have to like the person that is asking or suggesting for a referral for an agent; and

3.     The person referring the agent has to notice that an ongoing conversation is taking place (about real estate) and they have to THINK OF YOU (this is the key).

People are going to be referred either way, wouldn’t you rather it be you?

Referral Marketing Strategy Recap

The vast majority of consumers hire the first agent they meet with. Real estate is a belly-to-belly business and consumers tend to hire agents they know personally or are referred to. Buying or selling real estate is a big decision for someone and consumers want someone they trust and LIKE!

Your goal should be to let as many people you know, and know of you, know what you do for a living.  If you can accomplish this, you will set up a consistent real estate business fueled by referrals and eventually repeat business.

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