The Advantages of Referral Marketing in Real Estate
Posted: Mar 21, 2019
There is a great aphorism that goes "The purpose of business is to create a customer, who creates customers." That is where referral marketing works best. A company not only has to make customers but should know the art of making customers as a great marketing tool in the context of referral marketing.
Now, let us first understand; what is referral marketing?
Referral marketing is the technique of elevating products through customers via the customers themselves. Usually, it is called mouth-to-mouth publicity or marketing.
Referral marketing is an ideal way to make people aware of your real estate business, and the foremost fringe benefit you are getting is that you don't need to spend a penny on it. How? Most of it is done by your existing customer who is satisfied and pleased with your services. People always like talking about a good thing. When they get your preference fulfilled on utmost priority, they will talk about it in a more exaggerated manner. Every individual is well aware of this fact that in the real estate business, one needs to build a good relation and a trust factor with prospective clients. The well-known marketing survey analysis company Word of Mouth Marketing Association reports that every day in the United States, there are approximately 2.4 billion brand-related talks. People most often talk about the products and services they cherish, and the companies who proposed such offers to them.
On a report by the New York Times, 65% of all new set-ups came from referrals. That means on an average, almost two-thirds of the consumers make a purchase because someone they know spoke about a certain product or service.
In any line of work, a good referral can take the business to the pinnacle of success while a bad referral can completely drive you into the depth of failure. Every business has that uniqueness in them which helps them to be in competition with all the other competitors in the same line of work. Therefore, every company has to build their own referral marketing strategy. Well, most of the referral events include these three qualities: they have a targeted advancement, they use an incentive that suits their customers, and they have a strong legal backup.
Referral marketing in real estate bestows a number of advantages. Below is the docket of a few of them.
Foster a one step ahead gross ROI from the marketing tactics:-
A study, according to Forbes, found out that those customers who are referred by existing customers tend to provide more ROI than the subsequent customers. ROIs were increased by almost 16% by the referral customer. It’s just that the referral should reach the customer in a manner that one should not think twice before coming to the company. It needs proper management, proper knowledge and most importantly, before referring more customers, that particular customer should be one of the happiest customers.
Save your money:-
It can save a lot of money which you have planned to spend on marketing strategies. All of what you are spending on the incentives to your customers will come back to you in abundance. It has been found out in a study that referred clients stay longer by 18%. Here, you are getting a much better response and it’s working in your long term benefit. So, you are saving a big pocket through referral marketing.
It plays a significant role in building a good impression in the market:-
Your positive image in the market can only work well for you. Through positive referral marketing, customers have an optimistic approach to the firm. An individual is more likely to trust you and tends to take interest in your business if they heard good reviews about the company from a trusted source.
Advancement in revenue generation:-
When you are getting more customers than usual, and know how to satisfy them through your services, one will definitely generate more revenue than usual. One can build more effective relations when certain discounts are given to the existing customers for referrals. Those spends are anyhow coming back to you in more quantity and with more potential customers. It is a win-win situation.
Brand awareness and increment in market area:-
Brand awareness is one of the most essential parts of your business if you want your business to expand. The more people know about your company, the more customers you are getting. As your customer count increases, you cover most of the market area, and your company could have more customers than any other company.
There are not only Do’s in the referral marketing systems; there are many Don’t as well. We had covered the Do’s part, let’s check out the Don’t part.
Don’t put a burden on your customers:-
Customers will automatically refer you when they are completely satisfied with your services. It is not done when you continuously push your customers to refer to somebody else without knowing their feedback and their point of view. They will only refer them when they feel it right. Rather than earning profit from them, you should actually care about their perspective. As they say, "Your customer doesn’t care how much you know, until they know how much you care".
Don’t be dependent:-
It’s good that you care about the customer’s thoughts and perspective, and you are not being a burden on them for referrals, but completely relying on them so that after all your efforts, when they are happy with you, they will do it on their own, rather than you having to resort to your marketing ways. Once you are confident about their satisfaction, you should ask them in a manner that it would work on both sides, i.e. your referral marketing activities and the customer's ease.
With a complete and well-planned referral program, you can increase your revenue as well as your ROI to a great level. Using referral marketing effectively can increase your customer base beyond your imagination and can work on your behalf. Referral marketing needs proper management and proper knowledge You have to work consistently to get the required result. Once your customers are pleased, it will work in your favour.
Sheetal writes articles for businesses that want to see their Google search rankings surge. She contributes articles about the real estate and marketing industry.