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How much of your business comes from referrals?

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OutboundEngine recently surveyed 500 real estate agents. One of the survey questions was: Of your past clients, what percentage sends you referral business? A majority of agents reported that less than 20 percent of their past clients send them referrals.

In a recent National Association of Realtors survey, 88 percent of respondents said that referrals were “very important.” An additional 8 percent said they were “important” for generating leads, for a total of 96 percent.

If referrals are so important, but only 20 percent of past clients send referrals on average, what are some steps you can take to increase this critical segment of your business?

Problem 1: Client Loss Due to Attrition
Real estate agents typically lose 20 percent of their clients annually. The number one reason cited for this loss was a failure to stay in touch.

Solution: Stay in contact! Have a multi-touch approach to reaching your past clients on a regular basis through email, social and web.Email consistently ranks as the single most effective channel for awareness, acquisition, conversion and retention and is a great place to start.

Problem 2: Spending Marketing Dollars on the Wrong Audience
When it comes to referrals, it’s your past clients sending you business. So marketing to strangers on sites like Trulia or Zillow (or sending out flyers) may result in new leads, but will not result in referrals who are more likely to follow through with a sale.

Solution: To increase referrals, spend at least some of your marketing dollars on your existing client base. 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.

Problem 3: Right Audience, Wrong Message
Even with the right audience in mind, you need to make sure that your multi-touch communications are not annoying or irrelevant (that’s how you get deleted, ignored or worse, sent to spam folders).

Solution: Content marketing generates three times more leads than traditional marketing and is a way to communicate with your audience that offers them information that they want to read.

Read the remaining two problems and solutions on the OutboundEngine blog.

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