Rewarding Referral Sources
Written by Dustan Woodhouse, President Mortgage Architects
“You have to build the machine that will build the machine.” – pete koomen
Rewarding a referral source is all about rewarding the behavior, not the result.
We all “buy business” in one way or another; however, in this case I am saying that I did not pay any kind of significant kickback to a referral source—not ever.
Investing dollars directly in the client experience; paying for appraisals or a portion of legal fees for example, allows for increased control over the mortgage process for both you and your clients. In turn, those clients will have rewarding experiences that typically result in their becoming a referral source themselves. Some Brokers pay out kickbacks for referrals, but I don’t follow the logic. Brokers earn a living doing what they do, and others earn their living doing what they do (ie. Realtors, Lawyers, Appraisers). If I think you are pretty good at what you do and I get the chance, I will refer you, and all I could ask is that you would do the same.
Reward the Behavior, Not the Results
If somebody refers five clients in a row to you and none of them pans out, it’s not the referral source’s fault or problem. In fact, he or she is a rock star for sending you five potential clients. The referral source is doing you the favor of putting your name and number out there. He or she is getting people to call you and introducing you to clients. That’s huge. The referral source did his or her job, exceptionally. You had best do yours, exceptionally.
It is incredibly inconsistent of you to send nothing at all if those first five don’t materialize, and then send a thank-you three months later upon completion of the sixth referral that person gave you. This sort of behavior is disconnected from the process on the part of the referral source. Also, it is a bit like you are saying a few things to them that you really do not want to say, such as this:
“You’re sending me losers. Your friends are losers; your family are losers—except for that one in particular, though. Thanks for that one. He was great. The rest, though—you get nothing for that crop of deadbeats.”
You would never speak those words to a referral source, so why would you communicate this with your actions? Be respectful of your referral sources’ role in the process. It is to refer clients to you. That is it.
What if the phone rings, the client was referred, but the conversation ends in three minutes because you cannot help him or her for whatever reason? The referral source still played his or her part. Reward the referral source accordingly. Do not be a cheapskate!
Inconsistency and time lags created by clunky “thanks for the business that I finally closed” programs like this are confusing and borderline rude. Rewarding sources intermittently on the basis of outcomes they can’t control is the fast track to halting their referring behavior.
Perhaps it’s your own fault the file didn’t complete. Perhaps it’s the clients. Perhaps there was just nothing that could be done at all. The one person who is not to blame for anything in this equation is your referral source. That person did his or her part. So, reward the referral source for that—instantly.
The same day the phone rings, you are sending a thank-you: a thank-you email, a quick thank-you call and/or a thank-you card with a gift of some sort.
Remain appreciative and consistent. There is value in this process.
This said, a small, simple, fast, and consistent expression of gratitude for a referral is mandatory. Dash off an email or place a quick thank-you call for starters.
And then go a step further, immediately.
If your thank-you is a handwritten card with half a dozen home-baked cookies, scaling that up as you get busier is going to be a tall order. Never mind the time it would take to bake the cookies or even pick them up from a bakery, package and courier or deliver them. You soon will not have time to be even writing the cards.
You need something that can be done in less than 60 seconds and still has some punch. If your attitude is that you are not that busy yet so you can go the extra mile for now, then you are never going to get as busy as you could be. It is too easy to devote far too much time and mental energy to a task that should be handled by someone else in your business. In fact, this is a coping mechanism for many who are simply afraid of achieving a certain level of success.
Simple things, like a thank-you card, should be as streamlined as possible. Recalling that willpower is like a muscle: focus it on the work that needs to be done by you and you alone.
Write mortgages, not thank-you cards.
Send Out Cards is a service that allows you to create custom thank-you cards. Sending a card is as easy as typing an email. Log in; build templates from scratch using your own custom images and personalized text; enclose either a gift card or another gift from a range of options including cookies, brownies or tea; and click send.
No trip to the store(s), no handwriting, no visit to the post office is needed.
In our market, a Starbucks gift card is a pretty safe bet, and I sent out $25 per referral. This is in the middle of the range of what I have heard of Brokers doing. Some Brokers give $5 gift cards, others give $50. Recently, I heard mention of a Broker giving out $100.00 per referral— we all have to do what works for us.
I consider gift cards a marketing expense. It never fails to amaze me how many Brokers are reluctant to send a thank-you worth as little as $5, let alone a gift card worth $25 or $50, until they know the file has completed and they’re actually going to get paid on that referral. This is incredibly short-sighted. Such a self-limiting mind-set will restrict the growth of that person’s business, because that mind-set is restricting their own growth as a person.
’Tis the Season
Come the holiday season, you can use this system not just for referral sources and clients, but also for family and friends.
The ability to do a year-end holiday card mail-out to your entire database within a few minutes is frankly pretty amazing—especially to anyone who has spent literally days handwriting hundreds of cards and addressing envelopes.
If you are a certain age, you may recall the fate that befell Susan, the fiancé of George Costanza, from licking one too many envelopes in a single sitting. Hey, all I am saying is, why take the chance?
Send Out Cards is a lifesaver!
I think reflecting on ‘Hindsight’ is one of the most useful lessons we can gift ourselves with. I believe in the value so much that I host a podcast called “Hindsight’s 20/20”! [visit on Spotify or Youtube]
This year has given us a shake down that has got many running through the alphabet when it comes to pivoting from Plan ‘A’ to B, C, D etc!! Those who are finding that their share of the market is actually increasing during the crisis have learned valuable lessons that are supporting their foundation and making other potential clients feel secure in their services.
How can you take their insights and apply it to your own business? Here are three valuable points to give you some ideas.
1.KEEP PLAN B, C, OR D IN YOUR BACK POCKET AT ALL TIMES.
There is a saying, “If plan ‘A’ fails, remember, there are 25 more letters.” I have always appreciated that simple quote as a solopreneur myself for the past ten years and business coach to others. Lots of failed attempts at lead generating, marketing and time blocking have revealed the necessity of being able to bounce back from failure with continued optimism!
When your good ideas don’t yield the results you need then try again in a different way. If you have tried an S.E.O. Marketing service that only delivered low quality leads, don’t give up lead generating, just try a different method! Phone calls, invitations for coffee, emails, texts, social media give-aways, joining a community group etc…. There are a hundred ways to market – keep up the good intentions and pivot your method by trying a different angle.
2.POSITION YOUR BUSINESS FOR UNEXPECTED OPPORTUNITIES!
A friend of mine, Tina Varughese is a professional speaker on the subject of ‘Unconscious Bias’, and during the pandemic found herself with all kinds of opportunities to share the message and teach companies and staff about sensitivity in this area.
Her message is polished, and she has research to back it up. Her jokes and humor have been tested and her technical skills were up to date. So, what happened when a big client reached out to hire her? She was prepared and professional! She has seen unprecedented growth because of the political climate around diversity, and she could handle it.
This summer, while I sat on an expert panel of a virtual conference, I heard statistics that in the real estate industry there has been increase across the country and that the top producers have been gaining market share. When the market heats up, are you positioned by your reputation and professional ability to throw out your net and bring in a catch?
Ask yourself and business partners this question and get prepared! Which brings me to my third point.
3.ALWAYS PREPARE FOR GROWTH.
If I gave you five new potential clients today, could your business handle it? Would you be able to cycle them through an excellent intake process, would your checklists and systems keep all the paperwork and stages in order, would your CRM take care of the details so you don’t ever forget their children’s names?
Don’t wait until you are busy to prepare for growth! Prepare while you wait.
Investigate how you could handle more business! Get serious with your time management, find reliable people you can trust to work with, ensure that your client’s journey will yield satisfaction, referrals and repeat business!
Ask yourself what that would look like - and if you need some hints, email me for a short Quiz that you can take to rate your business. Then you will see where you excel and what areas could use some attention!
Free Quiz – email Sue@SueStyles.com
Perhaps during the last six months you have learned some business lessons of your own that you would like to share, if you have anything to add, send a note to me, I would love to hear what you have found on your own journey to maximized results!
Written by Sue Styles
Canada’s bossy business coach and one mother of a motivator!
Sue helps entrepreneurs organize their efforts, focus on what matters, and put proper basic foundations into place so that businesses can grow. She teaches practical business tactics from lead generating to client loyalty so that you can close more deals in style!
Sue has been interviewed in FORBES Magazine, is a guest contributor for R.E.M. Online and Host of Youtube’s Hindsight’s 20/20.
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