Answer:

Colleagues have probably told you that, after a certain number of years, you can begin to count on referral business bringing you the majority of your new business.  That is true, if you let it happen unintentionally.  Just by sheer numbers, you will eventually serve enough people (if you serve them well) that you will develop some sort of referral business.  We will call that business plan A:  Take enough floor calls, sit at enough open houses, and sell as many strangers as you can, and eventually some of them will start referring you every once in awhile. 

I use business plan B.  Business plan B looks like this:  Do everything you can, as soon as you can, and as often as you can, to get people referring you.  It does not rely on dumb luck and sheer numbers to get a referral business rolling.  It has nothing to do with closing the next sale or converting the next floor call.  In fact, in a referral business, a floor call is a nuisance.  It has everything to do with educating your clients (those people most likely to refer you) in five key areas…

• That you are competent
• That you care about them
• That you are friendly and likeable
• That you are interested in helping their friends
• That you will honor their referrals to the highest level.

There is no magic formula here… just common sense that most people overlook as being too simple.  None of these things are urgent.  Any of these things can be put off until tomorrow or next week.  All of them are easy to do, but are just as easy not to do.  Building a referral business means spending your time, energy and resources on accomplishing those five goals with your clients.

This is where this business plan drastically departs from the “tried-and-true” plan that you see agents struggling with all around you. 

Business plan A tells you that you should be taking as much floor time as possible.

Business plan B tells you to give away your floor time and make a personal connection with a client.

Business plan A tells you to sit open houses.

Business plan B tells you to get a newsletter out to your best clients… people who may not even be thinking about buying or selling a home.

Many agents tell me they do not have the necessary faith in Business plan B to really commit to it.  “What if nobody refers me?”  “What if I miss a really good floor call because I am too busy serving people who may never use me as their agent?”

I submit to you that Business Plan A is the real test of faith.  Business Plan A gives all of your power away to a telephone.  Business Plan A leaves you hoping for a great opportunity to fall into your lap.  And, what is more, Business Plan A never changes, never grows.  A sale made today using Business Plan A gets you no closer to achieving another sale.  You are back to waiting for a phone call, a walk-in, or for that less-than-one-percent response rate on a blind mass mailing.  If that is not going on blind faith, I do not know what is. 

Business plan B is empowering.  It puts you in control of your future.  Every sale using Business Plan B gets you closer to your next sale.  Every client added into Business Plan B grows your business in a very meaningful way.  And, possibly the greatest benefit of Business Plan B, you get to decide who you want to do business with.  People tend to refer people similar to themselves.  If you really connect with a client, you will almost always end up connecting on the same level with the people they refer to you… and make them a client as well.  Floor calls, buyers at an open house, and walk-ins are anybody’s guess.  Sure, I have met some great people this way over the years, but I have also met some of the worst people, too.  It is dumb luck, and dumb luck is no way to build a business.