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The Art of the Referral: How to Grow Your Business with Word of Mouth

Are referrals an active part of your business model? Chances are, you already know they should be. But to what extent? How much effort should you put into capturing referral leads, and what can you do to get more of them? Let’s explore the importance of a referral-based business and how to supercharge your sales pipeline with more of these highly valuable leads.


Unlike other lead types, referrals are typically warm leads who are serious about taking action. They enter the relationship with a higher level of trust, because the referrer has already vouched for you. To top it off, they cost practically nothing*, depending on the referral source. All of this means you can realize quicker wins by making referrals a top priority.


Referrals are like respect: They must be earned. This requires building a solid reputation that’s backed by expertise and outstanding service. Establishing this takes time and consistency, but it’s critical. The moment someone endorses you, their reputation is on the line, too, so it’s important to build trust and rapport with your existing network to ensure people can refer you with confidence, knowing that you can provide real value to their friends, family, or clients.


There is truth to the saying, “It's not what you know, but who you know.” Of course, there’s no substitute for knowledge and experience, but when it comes to growing your business with quality referrals, a great deal of opportunity lies right within your circle of influence. Here’s how to tap into these primary referral channels:

Past Clients

The number one rule for getting referrals from past clients is to stay connected. Keeping in touch is essential, not only for referrals, but also to capture repeat business. The good news is, it doesn’t require a lot of effort. Some ideas for staying connected include:

  • Sending monthly or quarterly newsletters that educate your audience on a relevant topic.

  • Sending birthday and anniversary greetings each year. A card in the mail is an extra nice touch!

  • Connecting on social media and posting regularly. Don’t forget to follow them back and comment on their posts when appropriate.

  • Calling clients a few months after the sale to see how they’ve settled in. Ask for their feedback on how the process went to ensure they had an experience that you stand behind.

These are simple ways to keep yourself front and center and find opportunities to throw out occasional referral requests. Just be sure that your communications always add value. You can guarantee they’ll be thinking “What have you done for me lately?” Continuously add value over the life of the relationship, so clients will be eager to refer you when the opportunity arises.

40% of referrals come from an agent’s immediate sphere, with the majority coming from current and past clients.[3]

Industry Partners

It takes a village to complete a real estate transaction, from the mortgage to the inspection to the title services and beyond. Giving and receiving referrals from these key players is a great way to strengthen relationships and boost business. As with clients, focus on ways you can add value to your referral partners:

  • Set up a co-marketing campaign.**

  • Host seminars together.

  • Share each other’s social media content.

  • Attend the closing.

Keep in mind, the best way to show your value is when you’re working together on a transaction. Be reliable. Return calls, texts, and emails promptly. And keep partners informed so your clients see you as a unified team. This will keep the relationship thriving and the referrals coming.


Local Businesses

Connect with owners and employees at the local dry cleaners, coffee shop, florist, pet supply shop, construction company, and other small businesses in your area. You want to be their go-to recommendation when someone asks around for your services, and you can return the favor by recommending them, too. Plus, having a presence in the neighborhood in which you specialize will boost your credibility as a neighborhood expert.

Reviews & Testimonials

Did you know 78% of consumers trust online reviews as much as personal recommendations?4 These are a type of referral in their own right, and taking time to optimize your online reviews will not only safeguard your reputation but also help online consumers make a confident decision to work with you.


Use this list of best practices to increase your chances of success when asking for a referral:

  1. Just ask! Don’t be shy. This is a hurdle we all have to overcome. Requesting referrals can be awkward, but you’ve got to put in the effort if you want results.

  2. When asking, be specific. What type of leads are you most interested in right now? Ask for those, specifically. Instead of “Do you know anyone looking to buy?” try “Do you know any young families or newlyweds looking for a home in a good school district?

  3. Make it easy for people to refer you. If someone agrees to refer you but has no immediate means to do so, they might forget, and you may end up losing that lead. Follow up with an email or text to remind them. If it feels appropriate, remind them of all the services you provide and what sets you apart from others. For another approach, try adding a form on your website or a link in your email signature that includes a referral call-to-action; that way you’re consistently asking without really asking.

  4. Always say thanks. Once you’ve received a referral, follow up with a thank-you call, email, or hand-written note to show your appreciation and increase the chances of that person referring you again.


*Section 8(a) of the Real Estate Settlement Procedures Act (RESPA) prohibits the giving and accepting of "any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person."

**The prohibitions in Section 8 of RESPA against giving and accepting of “any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person” may also apply to interactions with industry partners, including co-marketing arrangements.


[1] National Association of REALTORS®, 2018 Profile of Buyers and Sellers.

[2] Ellie Mae®, 2018 Borrower Insights Survey.

[3] Referral Exchange, The Agent-to-Agent Referral Economy.

[4] Bright Local, 2018 Local Consumer Review Survey.

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