Marketing Focus: Building A Referral Strategy

This is my favorite inspection: an agent who knows us well books an inspection either online or over the phone in less than five minutes. There is no selling, no negotiation, no explaining features or discussing fees or limitations. It is easy, fast and pleasant. The inspection goes smoothly because the client is well-prepared by the agent who knows what to expect. The report is well-received, and the client is delighted, again because expectations are aligned. That’s why referral inspections are my favorite!

When people refer a client to you, it is a great compliment and it suggests a strong relationship. Referrals are simply a great source of business. Most home inspectors like doing business that does not require a marketing or a sales process. Referrals are very powerful.

Referrals build your business because they are repetitive, creating a revenue stream rather than a single inspection event. They are inexpensive in that they are not like buying advertising. However, referrals require a significant time commitment, good communication and a consistently high level of operations. Referrals are earned, not solicited. You have to make the commitment and put in the time.

Who
Most inspectors think of real estate agents when they think of referrals. We would suggest that the best referral relationships are top-producing agents—those who do the most business and are the most professional. We should point out that it is sometimes difficult to reach the very top agents because they are often well insulated by their teams, and can be difficult to contact and build a relationship with directly. The very top agents also may be set in their ways, following a formula that works well for them. Who can blame them? For many of us, working with strong second-tier agents makes good sense. Plus, there are more of these agents than the very top producers. 

There are lots of ways to identify the agents you want to target. The conventional wisdom is to stay in the top 20 percent. Here is a statistic that startled me: Our real estate board has more than 45,000 members. Roughly 50 percent of those members average less than one transaction per year. That provides a strong clue as to where you should focus your efforts.

Here’s another way to build your referral network: Ask the agents you work with if there are others in their organization who would be a good fit for you. Like-minded people tend to come together. 

Referrals also can come from many other sectors. Lenders, attorneys and mortgage brokers are examples of allied professionals working on real estate transactions. For some inspectors, these are significant sources of business.

Service providers also can be referral partners. These might include your contacts who work for mold remediation companies, those in radon mitigation, HVAC contractors and others who help people solve home-related problems.

An often-overlooked referral source is your client base. Many inspectors think that because people only buy a home every few years, it does not make sense to keep in touch. We believe that staying in touch and maintaining a relationship with clients can be an excellent referral strategy. Although the client may not be buying a home for several years, the odds are high that a family member, friend or work colleague will buy a home. If your name is at the front of the mind of your past clients, and if they believe you bring great value, they are very likely to refer you to others. There are many products and services available to home inspectors that make it easy to stay in touch with clients and provide real, ongoing value. ASHI is a great resource in this regard.

Another referral source can be the home inspectors in your working area. Do you have someone with whom you share work when you are too busy or on vacation? Is the relationship reciprocal? Do you trust each other not to steal each other’s inspections? I much prefer the word “colleague” to “competitor.” This creates a win for both of you. Raising the bar in this profession helps everyone. 

How
We’ve talked about some of the people with whom we like to develop referral relationships. How do we go about it? Strategies with the real estate community might include one-on-one meetings with successful agents at their convenience, on their turf, perhaps over a meal. This is a first step. You need to make the ongoing effort to develop the relationship. 

You might consider joining, and actively participating in, real estate community boards and associations of other allied professions. Business networking groups are another tool. Be selective; look for groups with strong players that are important to you. Again, here is a gentle reminder that it takes time to build relationships. 

Two-Way Street
The best referral relationships are a two-way street. You may not be able to provide referrals in return, but you have to offer something of value. It might be a service you provide or some other form of consideration. It may be fulfilling the role of technical expert, providing answers to technical questions for agents and their clients. It might mean solving problems based on a phone call and a photo. It might mean free advice or reviewing another home inspection report to help provide clarification. (We never bad-mouth other inspectors.) It might include being available after hours. 

Referral relationships typically include supporting people’s events, perhaps by contributing, perhaps by participating. Playing a role in first-time buyers’ seminars, providing continuing education and sponsoring events are all strategies to build a strong referral network. 

The world needs more unbiased, trusted advisors. You are uniquely positioned to be just that.

What People Look For
What words come to mind when envisioning a good referral partner? Honest, reliable, positive, problem-solver, solution-oriented, empathetic, generous, accommodating, non-judgmental, patient, easy to work with—and more along these lines. You have to live these words to build relationships that result in referral business.

When people refer a client, you have a responsibility to take great care of them. You should exceed the client’s expectations and make the person who referred you look like a hero for referring you. Treating clients like a favorite relative is never a bad idea and is particularly important in this situation.

When you have a strong relationship, you can be proactive when there is bad news on an inspection. You can deliver it honestly and evenly without fear of repercussions. The difficult discussions are much easier when you have a relationship. When it comes to difficult discussions, provide perspective and solutions. You are in the problem-solving business, not the problem business.

Say Thank You
Say thank you in meaningful ways. Email or text is not ideal. Take some time to think about what is important to them—a Starbucks gift card might seem like an easy answer, but it does not make an ideal gift if the recipient doesn’t drink coffee. One size does not fit all! Personal and thoughtful gifts speak volumes. In my experience, the power of a handwritten note has not been lost.

It Takes Time
We mentioned earlier that good referral relationships are earned. We should add that they are not earned overnight. Trust builds over time. It is never given instantly. The bad news is that it takes a while. The good news is that so do most other effective business strategies. It is a chronic failure among small businesses to bounce from strategy to strategy looking for instant results. The frequent, impatient conclusion is that business development efforts don’t work. The reality is that we should plant the seeds, even if it will take time for them to grow, and remember to nurture them along the way.

Conclusion
Building a referral strategy should be a key business development activity. It is not complicated, but it is not easy. It takes time and thought. There are several ideas in this article. It’s best to select a couple of ideas that feel right and concentrate on those, rather than trying to do a bit of everything and not doing anything well. We encourage you to make referrals part of your business growth strategy.

Alan Carson is President of Carson Dunlop, which is the creator of the ASHI@HOME Training Program, the Home Reference Book and Horizon Inspection Software. www.carsondunlop.com