Updated August 25th, 2022
Last week, we heard from a property manager and a Realtor on The Property Management Show about building referral relationships. They’ve built a powerful relationship that’s resulted in better business for both of them. Strong relationships = more referrals = better business.
Now, we want to narrow the focus, and talk about how you can start to implement a referral program for your property management company, and how you can spread the “referral mindset” to the rest of your company.
Just for clarity’s sake: As we talk about referrals today, we’re talking about anyone referring you a potential owner lead. Realtors, vendors, tenants, other owners, and even your neighbor could line you up with your next owner client.
But before you start asking for everyone to send referrals your way, make sure you’re ready to nurture, implement, and give back.
Build Relationships with Everyone
No doubt you’ve got clients that LOVE working with you. So make it easy for them to talk you up. This applies with anyone you work with – owners, tenants, vendors, etc – and frankly, anyone you encounter in your day-to-day life.
You never know where your next owner lead is coming from. Sure, tenants might not be looking for a property manager for their own rental properties, but their friend or co-worker might be looking. Don’t forget your vendors either. Your vendors are in rental properties and interacting with folks in the industry all the time. They’re already incentivized to bring referrals to you – so long as you’ve built a strong and trusting relationship – because they know that, if you get another owner lead, you’re likely to ask them to take care of the maintenance work. It’s a win-win situation, so make sure they know you’re looking for, and would be very appreciative of, any referrals they bring your way.
Bonus Content: How to Get Vendors to Grow Your Owner Portfolio
Leads you get from referrals tend to have a better chance of closing. This is because there’s already a more personal element to the relationship you’re building with them. They trust the person who referred them to you, so they’re already looking on you favorably. In addition, referral leads tend to stick with you longer – again, due to the fact that some of the “leg work” of the relationship-building has already been done by the time they find you.
We go into depth regarding building referral relationships in our Property Management Show episode, “Building & Maintaining Successful Referral Relationships”, so for more info on that, head over there.
The Referral Mindset
Having a Referral Mindset doesn’t mean you’re emailing everyone you know and begging them to send you the names of all the property owners they know.
It means you recognize that your next lead could come from anywhere and anyone. You’re invested in building strong, honest relationships with everyone you meet.
You can share this mindset with your team. Make time to explain this principle to your company members and provide examples of how their positive interactions with your vendors, tenants, and other clients make your company the one they think of when their friend asks if they know any good property management companies.
Not only will this mindset help your business – it will enrich your life with positive relationships and people that want to help you succeed.
To Incentivize or Not to Incentivize?
Should you be incentivizing your network to bring you referrals? Should you be incentivizing your staff to encourage referrals?
It’s a good question, and the answer will depend on whether offering an incentive is a standard practice in your local area.
Do some research on your competitors in your local area, and take note of their referral programs. If it’s common practice to pay a referral fee in your area, your referral program won’t be very competitive without a fee incentive. On the other hand, if no one is offering a fee incentive, you might be able to get away with a referral program that’s more based on the quality of your relationships. Be sure to check in with your competitors from time to time, and note any changes in their referral programs so that your business remains competitive with other property managers in the area. Also, take note of any local laws/regulations that might prohibit paying referral fees or finders fees to specific individuals.
If you feel that including an incentive for referrals could be a positive addition to your company, think carefully about how much you want to pay for each referral. And then, start building your referral process.
Creating a Successful Referral Process
So you’ve started building some relationships, had a conversation with your team about Referral Mindset, and you’ve decided whether you want to use incentives or not. You’re ready to build your referral process.
1. Asking – There are plenty of ways you and your team can start to ask for referrals, both formally and informally. Come up with guided language for making referral asks at the end of positive phone conversations with owners and tenants. Listen for opportunities to ask more informally when you’re checking in with your vendors. Finally, set up a page on your website where visitors can refer you owners without you having to ask at all.
2. Collecting – With referrals coming from so many different places, you need one place to collect and track them. An easy way to start doing this is to set up a webpage with a form that visitors can fill out to send referral information to you. Provide areas for the person making the referral to put their contact info, company, and property description, as well as the contact information for the referral themselves and a place to mark whether they have permission from the referral for you to contact them.
You can set up your webpage form to add all submissions immediately to a spreadsheet where you can keep track of all your referrals. If you have a CRM, make sure you have a consistent system to record which individuals referred which owners to you. Sales CRMs like LeadSimple make this very easy to do.
3. Nurturing – Once you have referrals waiting for you to call them, decide what your process will be for contacting and nurturing them. Will you reach out once a week? For how long? Who does the reaching out? Is it you, or a member of your team? Meet with your staff and decide on a flowchart of what you will do once you receive a referral, so that nothing falls through the cracks.
Tip: Before you start creating your flowchart, make sure to check out these blogs which specifically cover key aspects of creating workflows and flowcharts for your property management business.
4. Rewarding – You’ve followed up with a referral, and they’ve signed! Terrific! Always thank individuals in your network after every successful referral. This is to underscore the value they bring to your business, and further deepens your connection. Part of this thank-you process may be sending them the incentive or the reward you decided on earlier, or perhaps a simple handwritten card to show your appreciation.
Also, don’t forget that it’s a two-way street. Keep them in mind the next time you come across a potential referral for their business, as well. We don’t just mean referring those same rental owners back to them once it’s time to sell or buy real estate. What we’re talking about is to keep your eyes and ears open for other opportunities you can send their way. Rewarding referrals with your own referrals is a great win-win strategy.
Referrals are one of the best ways to grow your property management business. The leads you collect from having already created a positive relationship with someone else can be warmer and longer-lasting.
But in order to get the most out of each referral, you need to have a system in place to ask, collect, nurture, and reward. Taking the time to set up your referral process will ensure that nothing falls through the cracks.
If you need help getting more owner referrals, or just getting more owner leads in general, contact us at Fourandhalf Marketing Agency for Property Managers. We’ve helped many business owners like you attract better quality owners online.
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