The Importance of Referrals

BY Barry hardwick, CCIM

In this industry, referrals are not merely just one small addition to sales volume in the pipeline, but can and should be a consistent source of new deals. The importance of referrals cannot be overlooked: they are vital in order to maintain a consistent flow of clients you can serve on a regular basis.

One way to get a step ahead in the referral process is to join networking groups. One network that we are part of at Centennial Retail Services is the Retail Brokers Network. Their motto is “Know, Like, Trust,” which is an excellent way to summarize how the referral system works. Whether it be a tenant council, a landlord council or something else, the purpose of the network is truly about getting to know each other, sharing information and ideas, and referring business back and forth to each other. That is why the three words in their motto are absolutely key. 

The motto exemplifies a very simple but true principle:

  1. If they don’t know you, they will not refer clients to you.
  2. If they don’t like you, they will not refer clients to you.
  3. If they don’t trust you, they will not refer clients to you.

In addition to the Retail Brokers Network, we also work with professionals from all industries: bankers and lawyers to insurance agents and accountants. When someone sends over a referral, I always make sure to respond promptly and keep the referral source in the loop. This is utterly important because while it is essential to get back to the prospective client quickly, we also want to make sure that you, the referrer, know your client is being serviced. 

If the stream of communication is clear and the referrer knows you took care of their client, everybody is happy in the end. That same client will now go back to the referral source and feel assured that they are a trustworthy go-to source for information and future contacts. As a result, you have now made your referrer look good, which means they will be more likely to send additional clients to you in the future! On the flip side, you do not want the client to go back to the referrer and say, “Hey, why did you send me to that person? They were not helpful at all.”

I cannot emphasize enough how important it is to cement relationships in any capacity possible. Someone is not just going to pick up the phone and say “I am sending a valued client of mine, take care of them.”   Also note that you cannot just show up at one Leads Exchange meeting or referral network and expect to get a referral.  You must put the time in to build the relationship.  

For example, I am a member of the Chamber of Commerce and have done volunteer work with them, which has helped me get to know many individuals and for them to learn my area of expertise. Earlier this year I got a Facebook message from someone who heard via the Chamber that I am a contact point for commercial real estate. This individual specifically said, “I was told at the Chamber that you are the commercial real estate guy I need to talk to.” Even if I cannot help the person directly, I can certainly point them in the right direction, further building that relationship. This also shows the Chamber that I can continue to be a source for those inquiring about commercial real estate needs. 

I went through the Massimo training program (which I highly recommend) and learned many crucial tips for building referral bases. One specific suggestion is to make a list of one hundred people (or as many as possible) that you can check in via phone call or even take out for lunch throughout the year. Then if one of their clients asks for help, you become top of mind. When you reach out to these people, it is important to be respectful of their time and of course do not actually ask for a referral. When you look at the economic analysis it is a great payback on your investment: you might spend about $1500 or so each year on one or two lunches a week per year, but generally the payoff is far beyond that, especially when you are taking the time to build a relationship with them in person. 

To summarize the importance of building referrals and never knowing where business will come from, I will wrap up with a fun but true story. When my son was in high school, he was cutting grass and one of his customers sister came out to the yard and asked if he would cut her grass too. Over the course of time, he got to know her and asked what she does for a living.  It turns out she is a commercial banker and specifically works with medical practices.  He said that’s interesting because my dad is a commercial real estate broker and works with medical practices.  She gave him her business card and said “tell your dad to call me”.  I did an that has become a 10 plus year relationship of referring business back and forth.  Building your referral base and networking base is an important part of the pipeline and when you put the time and effort in, it is worth it.

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