Referral Marketing

Back in 2004 I [Roger, founder of SwiftCloud] worked in the mortgage business for a guy named Bill Hogarty of Olympia Funding.

Bill had created a machine where his clients would not just self-duplicate, they would refer, on average, 1.7 deals for every 1 deal completed. This meant his business kept growing by 70% each year, without any major advertising expense. No fancy complex software, no expensive PPC campaigns – just the basics, done well and very systematically.

This marketing strategy still works – and is even cheaper to implement now via technology.

For new agents in businesses like real estate, financial services, insurance, etc. the trick is establishing that initial momentum

Database Marketing’s 1st Step:
The Wedding Letter

This letter will go to everyone you’d invite to your wedding, (given an unlimited budget).

It’s ok if they don’t know you as a real estate professional or whatever you’re now doing. What is important is that they respect you and hopefully like you.

Start a letter, using Google Docs, SwiftCloud’s docs, Microsoft Office – whatever you prefer – and copy this text and rewrite it:

A few weeks back I started working with a friend’s real estate company, and it’s going really well, I’ve learned a lot and I’ve been sort of surprised how much of my past experience in [some job field, or school training or whatever] is applicable because I get to [work with people all day, or crunch numbers, or whatever you think might relate]. So what I’m after is just your keeping me in mind when you come across people that want to buy or sell a house, or get a lower house payment, or need cash and own a house, or are interested in real estate investing. You know I’m pretty green, but the people I work with are awesome and I’m shadowing them, so it would be a real favor to me. Of course when you need something, I’ll give you the insider hookup, just let me know. It’s short notice, but do you know anyone offhand that needs that? If not, will you let me know when you come across someone?

The reason people don’t like traditional salespeople is because they push their agenda over the client’s agenda. You are not a traditional salesperson, you are a professional service provider whose job includes sales which really means help the person to choose the right course of action.

 The basics of referral marketing works like this:

Step 1 is to run the mayor campaign, and this should really be combined with updating your database with regards to mailing address, and email. Make sure the records are complete. I do this in a fun way, and the call might go something like this.

 Bill! dude, what’s up? How are you?

He responds in the usual way.

 I then preface that the call is about business. My female friends tell me this is too direct for women but good for men, so if you’re calling a woman, you’ll need to be a bit warmer and less direct. Anyway, my call to Bill continues.

 Hey bud, I’m calling about a couple things. A few weeks back I started working with a friend’s real estate company, and it’s going really well, I’ve learned a lot and I’ve been sort of surprised how much of my past experience in [some job field, or school training or whatever] is applicable because I get to [work with people all day, or crunch numbers, or whatever you think might relate]. So what I’m after is just your keeping me in mind when you come across people that want to buy or sell a house, or get a lower house payment, or need cash and own a house, or are interested in real estate investing. You know I’m pretty green, but the people I work with are awesome and I’m shadowing them, so it would be a real favor to me. Of course when you need something, I’ll give you the insider hookup, just let me know. It’s short notice, but do you know anyone offhand that needs that? If not, will you let me know when you come across someone?

 No, but let me give it some thought, I’ll get back to you.

 Thx man, I appreciate it. Hey, are you still at 123 Maple lane? I’m going to send out a newsletter about once a month, for the team…it has stuff like foreclosure tricks and tips on saving money around the house, or making your credit better, stuff like that, is that alright? I promise no spam.

 Yeah, still there.

 And your email is still [email protected]idgets.com?

 No, I left widgets… use my hotmail account, which is [email protected]

 Right on… enough business. How are the kids?

 Note that if it’s not obvious business has ended, I close that out before moving on. It’s just an etiquette thing. Usually they’ll come back to it and be curious, and but from there it’s just conversation.

 It may help you to have a written script for this written out or an outline. Once you’re more experienced, I call and am pretty much joking with clients, and have to re-run the mayor campaign, here’s why. I’m looking for the people who will NOT refer me business, because they have a family member in the biz or something like that. That’s ok, I don’t remove them, but take them off the A-list so that I don’t spend my time or money marketing to them. The goal here is to develop a solid group of people with a very high density who will refer you. You can’t just grow your database, you need to maintain the density, otherwise you’ll waste a lot of time and money dealing with them. Don’t feel bad when you kick people off the a list, they’re doing you a favor. Also, some systems maintain your goal is to get to a certain number, but I don’t believe it. Just focus on the density, and provided the density is over 80% or 90%, then get the list as big as possible. When your list gets too big to manage, you’ll be making plenty of money to hire an assistant to help with these calls.

 Once your initial database is set up, you should make it your goal to add a few people every week minimum, and stay in touch with those people. Also, it’s a goal to remove from you’re a list that will cost you time and money but not lead to business. Certainly stay in touch with those people, and even let them know what you’re up to. You might be surprised how many loans I have done for other loan officers or people related to loan officers. Remember some educated borrowers are likely to not want to use someone they know personally because they are less likely to mix business and pleasure, as well as don’t want their friends to know their income or credit. If you suspect that to be the case, remind them that you are completely and totally private with all data because of both legal and ethical requirements, and that you have seen (or your group as seen) everything from $200 a month to $60,000 a month income, and credit scores from 387 to 820.

 by the way, when you first set up your database, make it a goal to call a certain amount per day, or spend a certain amount of time per day.

 Last, once you have updated and qualified your database, you’ll want to send a letter of the heart. The goal of this letter is not so much about your new professional direction. It’s about you as a person, and a reminder of why they like you, hopefully with some sort of epiphone or ah hah moment or life lesson you learned. With all communication, you want a mix of you personally, in a very informal style, along with you professionally in a warm style that suits you.

 Make sure to categorize affinity partners as you go through the database. A good system like lendermate is group based, so check as many groups as this person belongs to. Affinity partners like other realtors, financial planners, HR directors who handle relocation, tax professionals, or debt collectors can result in a steady stream of referrals from just one person. These people should receive special attention and marketing.

 Studies show that you need to mix up your communication media, meaning you need to send snail-mail at least quarterly, and use email to stretch your budget. Email alone doesn’t work very well. Also, when you use email, you need to mix in some fun, some news, and some of you personally.

 Make sure in your daily contacts that you give out a lot of business cards and get as many contacts as practical. Be consistent about putting people into your database and you’ll find soon enough you’re getting a steady stream of referrals to people who need your service. A well run database of even one hundred people can bring you more than one hundred thousand dollars in income to you, before you spend any money on marketing. Warm referrals are better clients for you, cost less, and waste less of your time. Taking the time and effort to set this up is the foundation of your business.