Do You Have Enough VSPC’s To Run a Referral-Based Bizness?

Feb
2015
12

posted by on An Exceptional Agent, Prospecting & SOI

I’m having a great conversation in a private group on Facebook about the joys of running a referral-based business where the majority of your Current Clients (CC’s) come to you as a result of referrals from your Very Satisfied Past Clients (VSPC’s).

And trust me, when your business gets to that point, it truly IS a joy.

But of course, to get to this point, you have to:

1. Have a robust database of VSPC’s; and

2. Make sure your CC’s become VSPC’s!

Now the only way I know of to ensure that your Current Clients become not just PC’s but rather VSPC’s is to give them a heck of a client experience with you during your transaction together. Which means (as we’ve discussed a time or two around here) that you prioritize taking care of them first, before tackling any prospecting you feel you need to.

What does this look like? Well, it’s pretty simple. Every day you make sure all of your Current Clients are taken care of. Their needs met. Their calls returned. Their files reviewed. And yes, their fires put out, even if it means you <gasp> put off your prospecting to put out said fire.

Take Great Care of Your Current Clients and They Will Take Great Care of You Forever and Ever.

Okay, sooooo….

“But Jennifer, I do take Great Care of My Current Clients but they aren’t generating enough referrals for me to live on! What am I doing wrong?”

Probably nothing!

Here’s the thing to understand about a referral-based business. Well, a couple of things.

First, while I shudder writing these words, when it comes to a referral-based real estate business, there is a bit of a numbers game reality involved. Not everyone you WOW will refer you, either because they simply aren’t the sort of person who refers, or they just never have anyone to refer. So, the more VSPC’s you have, the more referrals you will receive, since your VSPC-to-Referral ratio will almost certainly be (much) less than 100%.

Put another way, let’s say that you are in your fifth year selling real estate and you have 100 VSPC’s in your database. If 25 of them hire or refer you, that’s a 25% VSPC-to-Referral ratio and I would consider that pretty darned good! And if you were to survey the other 75 who never referred you (please DON’T) I bet you’d find that the majority of them would tell you they’ve never referred anyone to a real estate agent, so it’s not personal.

Or, of course, they might say those dreaded words “Oh, shoot, I FORGOT you were in real estate!” (Different subject for a different day.)

So, yes, enjoying the benefits of a strong referral business based on the good will and enthusiasm of your VSPC’s will, by definition, take time because you don’t begin a real estate career with any Past Clients, Very Satisfied or not!

That said, this brings up a few more points to ponder.

First, there is a difference between a Sphere of Influence (SOI)-based referral business and a VSPC-based referral business. As a new agent, you most certainly CAN find enough clients to serve within your Sphere of Influence if you Know enough people who Like you and Trust you, even if you don’t have a lot of Past Clients yet. You’ll have to prove yourself to them in other ways, but yes, your SOI can be your primary source of clients literally from Day One.

Now what if you don’t have enough Current Clients to take Great Care of? What should you be doing?

Here is my suggestion. Commit to working real estate at least 40 hours a week (more is fine!). Fill up those hours FIRST with Client Service. Anything and Everything you can think of that will make your Current Clients think you are the Best Thing Ever. If your Current Client load is not sufficient to fill up those 40 hours, THEN get out there and fill those remaining hours doing what you need to do to find yourself some Clients to WOW.

But if you have enough Current Clients that you can consistently fill up your 40+ hours a week with Client Service, I’ll bet you’re very close to being able to rely on your VSPC’s for most of your future business.

Sound good?