Your Most Critical Task for 2024: Setting Up a Referral Program for Past Listing Clients

The real estate market in 2023 was a challenging one for agents, with fewer transactions taking place, higher mortgage interest rates, and low inventory. Moving into 2024, many agents have the nebulous goal of landing more listings. And there's one tactic that works better than any other when it comes to increasing seller leads: A referral program.

According to the most recent National Association of REALTORS® (NAR) Profile of Home Buyers and Sellers, direct referrals from previous clients and friends are one of the most popular ways that a home seller finds their agent. Out of all respondents surveyed in the profile, 65% of sellers found their agent through a friend, neighbor, or relative — or used an agent they'd previously worked with in the past.

Not only that, but 46% of sellers used the same agent to purchase their new home as they did to sell their existing home, and that percentage jumped to a whopping 84% for sellers who moved within 10 miles. Plus, the typical seller has recommended their agent once since selling their house, and 20% of sellers have recommended their agent four times or more.

If you don't have an active referral program for previous clients, and if you want more listings in 2024, then the very best thing you can do to meet that goal is to establish a referral program.

6 Steps to Setting Up a Real Estate Referral Program

The good news is that if you already have a CRM and an email marketing platform, you've already got the basics in hand. Here's how you can set up a real estate referral program that will generate seller leads for you.

1. Determine the Goal of Your Program

It's smart to be as specific as possible. How many leads are you hoping to generate from referrals? How many listings will that result in? Document exactly what you're hoping to achieve from the program, which will help you answer subsequent questions, such as its scope or how much to invest in it.

2. Identify Your Potential Top Referrers

Using your CRM, start to create a segment or a list of previous clients who have already referred you to their acquaintances and friends at least once in the past. You may want to create a second list or segment of people who could be excellent references for you.

3. Start Reconnecting With Your Lists

Sometimes all it takes to be the go-to agent for your top referrers is to remind them that you exist and that you do a fantastic job. Set up coffee chats, morning walks, golf times, or after-work drinks with the people who you think will be your best referrers. The goal of these meetings isn't to ask them to refer you; it's to see how their lives are going and share a little bit of information about your own professional life when it's appropriate.

4. Send Interesting, Quality Emails

The hard part about referrals is that when people own a house, they're usually not thinking about buying or selling, so staying top-of-mind with past clients can be a challenge. If you don't already have a robust email campaign strategy that involves engaging homeowners at all stages of their life cycle, it's time to create one and establish yourself as the go-to expert on all things housing and home.

5. Track Who Refers Whom

If you have a CRM set up, it's easy to keep tabs on who's referring whom to your services. Make sure you're up to speed around where your referrals are coming from and how they all go, because it's going to be critical for the next step in the process:

6. Say 'Thank You'

There's a certain kind of social cachet and pride in being the person who knows good people. If one of your previous clients introduces you to a new one, make sure you thank that previous client for the introduction! They'll feel good knowing that they've helped two people accomplish a goal, the seller and yourself. And they'll remember that you thanked them the next time an opportunity emerges for them to recommend your services.

Related reading

• How to Generate Real Estate Referrals Using Local Online Groups
• 65 Sources of Real Estate Referrals You May Have Overlooked
• How to Get the Referrals Hiding in Your Professional Network