Thank you.

Simple, yet very effective.

One of the main reasons people stop referring is because they are not acknowledged or appreciated for doing so.

Don’t let that happen to you!

Referrals will come to you in a variety of ways.

You might get a phone call from a new potential client.
Or maybe an email asking for your assistance.
And if you’ve really done it right one of your past clients will call you with the name and phone number of the person they are referring.

However you get the referral it is critical to your ongoing success to acknowledge the person who referred you.

People Need to Refer You

Think about this…when someone reaches out and asks for a referral or recommendation how do you feel? Think about the last time someone asked you for a good place to go eat.  Or maybe a movie to go see.

Do you care?
Do you want to give them a referral?

You probably can’t wait to give out any information you have.

Referrals are like social brownie points.  When you give out a referral you get a point.  Over time you accumulate points until…you need a referral.  And then you go out to those you know and you ask for the information you need.  And when you get it, you give a point to the person who gave you the referral.

It is all about reciprocity.  People like to help.  And People like to be helped.

When you receive a referral you must understand that the person who referred you feels great.  They got a point.  All you have to do is recognize that they did so and that you were the one that they recommended…because to the referring person who they referred matters less than the fact they they referred.

The Habit Loop

Humans are creatures of habit.  But habits are formed in a very specific manner that will help you in continuing to receive referrals.

It’s called the habit loop.

habit loop

The core of any habit is a neurological loop consisting of:

  • Cue
  • Routine
  • Reward

When someone referred you (routine) it is because they were cued to do so.

Maybe a friend asked for a recommendation.  Or maybe they overheard a co-worker talking about buying a home.  Either way, that was the cue.

The reward is where you come in.  When you receive the referral you must reward them for doing so.  Because when you do you start to form a habit in the mind of the referral source.

You might be wondering how to reward someone for a referral.  We cover appreciation in the next section but for now understand that a reward doesn’t have to be complicated.

Charles Duhigg wrote a fantastic book called the Power of Habit where he explains in detail this habit loop.  You probably wouldn’t dream of not brushing your teeth at least once per day.  It’s common practice…but that wasn’t always the case.  Prior to the creation of Pepsodent in the early 1900’s hardly anyone brushed their teeth.  Advertising executives were tasked with creating a habit loop to sell their product.  Their answer?  The tingling sensation you feel when you brush your teeth.  It’s a reward for brushing (and using their product).  Smart, right?

Claude Hopkins [ad executive signed on by Pepsodent], it turns out, wasn’t selling beautiful teeth. He was selling a sensation. Once people craved that cool tingling—once they equated it with cleanliness—brushing became a habit.

Image Source: Habitica

How do you reward someone who referred you?  It’s as simple as saying thank you…

Saying Thank You

Say thank you.  Via phone, text message, email, whatever.

You can keep it simple or you can have some fun with it like you did with birthdays.

Simple as that.

It Goes Both Ways

Not only do those that give out referrals like to be recognized but so do those receiving the referrals.

When you talk with the person referred to you for the first time and find out who referred them it is important to acknowledge the referral source.  For a couple of reasons:

  1. They will likely tell the referring person what you said.
  2. It solidifies the confidence they have in the referral source and therefore the decision to work with you!

Robert Cialdini in his book Yes! 50 Scientifically Proven Ways To Be Persuasive explains the value of a third party endorsement.  He also explains that even when the endorser has an interest in the person selecting who they are referring it still increases the likelihood they will use that person.

When you speak highly of the referral source you are, in effect, endorsing the referral source therefore creating influence that ultimately pushes them closer to you.

Call Script

You were referred by [name of referral source]?

That’s wonderful…I so enjoyed the opportunity to help them with their home purchase and getting to know them personally.  [Name of referral source] is [adjective based on your experience], aren’t they?

How do you know [name of referral source]?

Something simple and positive about the referral source is really all you need to say.  Then their own personal relationship with the referral source will take over and further strengthen the referral to you.

Show your appreciation for the referral by saying thank you.

There are a variety of ways to show your appreciation for a referral.  Here are some ideas to help you:

Then, Keep the referral source in the Loop

One great way to show your appreciation is by keeping the referral source in the loop throughout the transaction.

Let the referral source know when…

  • Initial contact was attempted
  • Initial contact was made
  • When a customer has made a commitment to work with you
  • When they close

All of these are opportunities to loop back with the referral source, show your appreciation again and let them know what’s going on.

Many times people refer someone and never know what happened.  There is certainly some considerations of privacy and you may want to get the permission of your new customer to loop back with the referral source but general milestone updates shouldn’t cross any lines.  Keeping the referral source updated reinforces the good feeling they had when they sent the referral to further build the habit loop.

Saying thank you and showing appreciation is simple and easy, right?

It is…until you get busy.

But when you are busy is when this matters the most.  And you need to make sure that you have a system in place to recognize the sources of your referrals even when you don’t have time to do it.

You need a system in place to make sure you ALWAYS acknowledge the referral.

“System” may carry a lot of baggage with it so let’s make sure we are on the same page when it comes to creating a “system”.

Systems are simply a series of steps that create a predictable outcome.  One of the most common systems is a recipe.  If you put in a quarter cup of this, 2 tablespoons of that and 2 cups of this other thing and then bake it for 15 minutes you will get something delicious.

That same concept can be applied to just about anything.  But there are some critical elements to building a system within your business to ensure your success.

Referral Acknowledgment System

You might be thinking this is all a bit overboard.  That you don’t need a system to thank someone for their referral.  Maybe you’re right.

But systems create efficiencies in your business.  They create failsafes.  They create tripwires.  Here’s the question…do you want to do business or be in business? Systems will create the foundation for being in business with lasting success.

When building a system there are three critical elements you need to have in place: (the three T’s)

Trigger

The first element of a system is the trigger. Something that puts the system in motion.

In the case of acknowledging a referral the trigger is receiving the referral.

Task

Next is the task...the action you are going to take once the trigger occurs.

This could be one thing or a series of things. It could start immediately or later on.

When you receive a referral the task will include some way to say thank you. Maybe more, but at least a thank you.

Track

Tracking your business is probably the #1 overall differentiator of success. Simply tracking your business keeps you engaged and involved in what's happening. The actions you are taking. The results you are getting. It is vey difficult to not do well when you know what you are doing and whether those actions are getting you to where you want to go.

Here you will track what happened in some way. You will track the referral source. You will track the new lead. You will track that you acknowledged the referral.

How you do this doesn't really matter a whole lot, but having it somewhere where it can be easily referenced later is important.

Sample Referral Acknowledgement System

  1. Referral Received (TRIGGER)
  2. New Lead Entered into CRM (TRACK)
  3. Referral Source Logged in New Lead (TRACK)
  4. Call Made to New Lead (TASK)
  5. Call Made to Referral Source (TASK)
  6. Every Monday Handwritten Notes Sent to ALL Referral Sources for the Previous Week (TASK)
  7. Log Activity of Sending Note in CRM (TRACK)
  8. Notify Referral Source that New Lead Signed Listing Agreement (TASK)
  9. Log Activity of Notifying Referral Source (TRACK)

You may notice that the three T’s are not necessarily in order.  Your system may require you to do certain things or track things at different points…and that’s ok.

Following a system allows you to be deliberate about your business.  It will allow you to create a sustainable and predictable business.  You can make this as simple or as complex as you would like.  If you have not built out systems prior to now start simple.  Don’t get too complicated or involved here.  But over time this can expand into something more complex.  You can easily create your own system by outlining what you want to have happen when certain triggers occur.  You can turn this into a checklist or a workflow should you invest in a CRM which can trigger tasks or workflows to tell you what to do when and whom should complete that task.

In later modules the tracking will be a very valuable tool to you so make sure you are tracking your referrals!

TAKE ACTION!

  • Determine the exact steps you will follow each time you receive a referral and put those in writing so you can refer back to them. (See Sample Referral Acknowledgement System)
  • Create your system to make sure you follow your own steps.  This can be a checklist, outine, task list or workflow in your CRM, etc.
  • Determine other steps, if any, you will take at other points such as when the customer closes, etc. to loop back with the referral source. (see Keep them in the Loop)

Estimated Investment