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Real Estate Referral Business Comes from Only 20% of Past Clients (HUGE Opportunity!)

Travis Balinas
April 7, 2015

When we surveyed over 500 agents to see how much money they were leaving on the table, one of the questions we asked about real estate referral business:  Of your past clients, what percentage send you referral business?

By an overwhelming majority, agents reported that less than 20 percent of their past clients were sending them leads. Less than 20 percent!

Let’s put this into perspective using stats from our real estate marketing infographic:

  • 86 percent of buyers/sellers would use their agent again and recommend their agent to others.
  • 75 percent of an agent’s business comes from referrals and word of mouth.

This means that 20 percent of your past clients are responsible for 75 percent of your business, even though 86 percent of them would use you again and recommend you to a friend. You excited yet? You should be!

Just do the math. How many more deals would you close if you increased this number to 30 or even 40 percent? What if you didn’t have to rely on door knocking, Internet leads or bad marketing investments? What if you could make your business 100 percent referral-driven?

Agents have a huge opportunity to activate their sphere of influence and get more referral business from their contacts.

Here are five problems that make it difficult for agents to increase referrals and how to solve them.

Problem 1: Client Loss Due to Attrition

Real estate agents lose 20 percent of their clients annually due to attrition. The number one reason cited for this loss was a failure to stay in touch with their clients. While you’re still getting referral business from past clients, you’re working against your own progress by not maintaining the relationship with the people in your network. Wouldn’t you rather have that 20 percent churn reduced while your referral business went up?


This fix is so simple: make sure you’re staying in touch with your past clients! I’m going to give everyone the benefit of the doubt here and say that all agents know that they need to stay in touch with their past clients for this very reason. You need to have a multi-touch approach to reaching your past clients on a regular basis through email, social, mobile and web.

Whether it’s a problem of time, not knowing what to do or an issue of finding motivation to get out there, just know that overcoming these barriers is the first step to increasing your referrals. (Hint: email is consistently ranked as the single most effective channel for awareness, acquisition, conversion and retention.)

Problem 2: Spending Marketing Dollars on the Wrong Audience

Marketing yourself is important; however, you can easily find yourself talking to thin air. Think about it; your clients are the ones sending you referral business. When you send out direct mail to an unknown list or run ads on Trulia/Zillow to thousands of strangers, you’re focusing on people who don’t know who you are. Besides being terribly expensive (and low performing) channels, these aren’t the people who are going to send you referral business.


Another simple fix as well. Spend some (or all) of your marketing dollars on your existing client base. The benefits are threefold: 1) you stay top of mind and on their radar, either for referrals or repeat business, 2) you can track your return on investment (when using email and social) and 3) your marketing expenses will be significantly lower.

Did you know that it’s six to seven times more expensive to acquire a new customer than it is to retain an existing one? Focus inward to grow your business outward.

Social Media Field Guide

Problem 3: Right Audience, Wrong Message

Even with the right audience in mind, you need to make sure that your touches are not annoying or irrelevant (that’s how you get deleted, or worse, sent to spam folders). Whatever you send through email or post on social has to resonate with all of your base. Things like automated housing industry reports, mortgage rates by zip code and new neighborhoods being built are useful to your clients only if they’re actually buying/selling a home right now.


Did you know that content marketing generates three times more leads than traditional marketing and that 90 percent of consumers find custom content useful? Content marketing is a way to communicate with your audience that offers them information that they want to read. Rather than information specific to real estate, you provide information about topics that are interesting, helpful and entertaining. You want your recipients to keep reading your emails and social posts, so work to help them, not sell to them. Real estate is all about relationship building, which is why content marketing is so powerful; 78 percent of consumers believe that organizations providing custom content want to build good relationships.

Focus on their needs, not yours, and you will see a return.

Problem 4: Not Nurturing Leads (Long-Term Planning)

As I pointed out in problem 3, not everyone in your database is at the same point in their customer lifecycle. Some people just bought a house from you, others have been living in their homes for five years and could be getting close, while others are already in their forever homes. These are three very different clients, but all very capable of sending you referral business.


When marketing to past clients, it can’t be only a holiday card or yearly newsletter. You need to approach this with the mindset of wanting to continue to build your relationships. If you’re not bringing any new value to these people, it’s easy for them to forget about you.

That’s why you need a long-term engagement strategy. Make a schedule, stick to it and produce stellar content that continues to plant seeds in the minds of your past clients. Content marketing is a useful tool, especially for the longer sales cycles of the real estate business. You can put this marketing tool to use by providing useful and entertaining content to your past customers and prospects. Just remember that this is a long-term approach, not a short-term guarantee.

Problem 5: Underutilizing Email Marketing

The one underlying theme behind the previous four problems is that they all require some sort of communication medium, and email is that medium. Sure, direct mail has been around longer and social media is always a sexy marketing channel to discuss, but email trumps all of those and is greatly underused by agents for helping them increase their referral business.


Email is a powerful tool that should be at the forefront of your marketing plan. Need more proof? You can check out these 20 Shocking Email Marketing Stats, but four are particularly relevant:

  • For every $1 spent on email marketing, the average return on investment is $44.25.
  • Email is nearly 40 times better than Facebook and Twitter at acquiring customers.
  • 91 percent of consumers check their email at least once per day on their smartphone, making it the most used functionality.
  • 70 percent of consumers always open emails from their favorite companies.

Through all the noise of social media, how others treat your direct mail like junk mail and your inability to call all of your past clients on a monthly basis to catch up, email is the consistently reliable tool in your arsenal that will always get their attention. Using email, you can build up your long-term relationships, brand yourself professionally, help and entertain with great content and reap the rewards of increased repeat and referral business.

Want this done for you? We can automate this entire process for you.


Your connections, sphere of influence and past clients are the financial lifeblood of your business. And while the majority of your business already comes from them, you can get so much more. Remember, only 20 percent of your past clients are actually sending you referral business. Cut back on your other marketing expenses that don’t work, and focus your marketing efforts on nurturing the people who matter most.

Create a long-term engagement strategy through content marketing. Keep in touch through twice-a-month real estate email campaigns, update your social media accounts and save yourself time and energy by automating this process.

Social Media Field Guide

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