We all know that referrals are one of the best ways for commercial real estate brokers to get new business. You should never completely rely on referrals or repeat business, but it can be a big boost for your career over time if you perfect the art of the referral request.
Happy clients should be more than willing to give you a few names or a reference at the very least. And when you have someone to vouch for your work right out of the gate, the initial process of bringing on a new client can move a little faster.
So, the big question. At what time and stage in the transaction process should you make a direct request for a referral?
What it means to “be in the conversation”
Think for a minute about the last time you made a major purchase—let’s say a car. Before you went about actually buying the car, you did a lot on research on what you wanted, what the options were, what you could afford, etc. And a big part of that research was talking to other people, asking questions, and getting recommendations. Then once you narrowed down your choices to focus on a certain car, you probably started seeing it everywhere.
That’s the concept of “being in the conversation.” Once you turn your attention to a new task or object, you start talking to people and getting tuned in, and it starts popping up more and more in your life.
The same thing is happening to people who are buying, selling, or leasing property. They start talking to people and asking questions about the process, and they get routed and rerouted to new contacts and people who have been there. They’re in the conversation.
What that means for commercial real estate referrals
Many brokers think to ask for the referral down the road, after the transaction has closed. Maybe they approach referrals reactively and they don’t even call until months later when their pipeline is low again.
But that’s not the ideal time to request a referral. Those people aren’t in the conversation at that point in time.
The best time to ask is during the transaction itself, when everyone is still in the “honeymoon phase.”
You need to ask when you’re in the thick of things, and the process is going well. You need to ask when there’s momentum going in the deal and everyone is happy. You can’t wait until after the deal is done and your client is moving on and thinking about new things.
Finding the exact right time in this honeymoon period does take a bit of finesse. You need to figure out the right moment within that framework. Maybe it’s when you hit a milestone and are out for lunch or celebratory drinks, or when you finish a meeting and you can feel the wheels spinning.
A script for phrasing the referral request
Once you’ve figured out the right time to ask for the referral, here’s how you should phrase the request.
“Bob, I’ve loved working with you, and in fact, I’d love to work with more people like you. My question to you is this: who do you know who may be looking to buy, sell, or lease commercial real estate?”
You’ll notice that you start the request with a compliment. You’re already asking during the honeymoon period, and an additional compliment will make your client even more likely to return the favor and help you out.
The other important note about this phrasing is that you do NOT say “do you know anybody…” Asking a yes or no question makes it easy for the client to say “no” and get off the hook from taking a moment to think of who they might know. Saying “Who do you know… “ presupposes that they have lots of connections and already know someone. It opens up their thinking and encourages the client to rack their brain a little more, instead of just dismissing you if they don’t have an immediate referral.
Referrals really are so much better
When you get the referral, you have a warm lead that’s more likely to convert than any old cold call. Make sure to drop the client’s name when you approach your new contact, saying something like, “I was out to lunch with Bob recently, he just moved into a new space, and he mentioned your name as someone he’s been working with for a while. He thought I should check in with you to see if you’re doing anything at the moment or looking to make a move.”
Even if this person isn’t looking for a broker at the moment, they’re more likely to at least have a positive association since you’re connected to someone they know. Keep in touch so you’ll be the first person they think of when they do need a broker.