In the fourth of five episodes with tips to get back to the basics of building your real estate business, we look at two ways to drive your referral business to a higher level.
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Welcome back to Top 5. My name is Chance Brown, and I am your host for today. If this is your first time joining us, then you are in for a treat, maybe. I don't know. You may not like this format at all, but we're trying something new. We'll see. Typically, what you see on this show is me interviewing people, them giving you your five best practices that you can take and put into your business from their world, or you hear me talking about a particular subject that has five takeaways. This week, we are trying something new, a little bit of shorter format for each episode, and we're doing five episodes in a row, 1, 2, 3, 4, 5, Monday through Friday, talking about a certain topic. This week's topic is back to basics. The last couple of years have been wild and crazy inside the real estate industry, and because of that, we've let a lot of things fall to the side that we normally should be doing in our business to help it grow.
We're going to get back to basics now that we have a little bit of room to breathe, and we want to make sure that our business is built to last. So, on Monday, we talked about awareness. We talked about building awareness of all the things that have to happen in our business for us to be successful, all the daily disciplines. On Tuesday, we talked about transparency, where we take those daily disciplines that we know we have to do, and we actually track whether or not we do them, and we track how much time we're spending on revenue-generating activity, and we lay that bare, and it might hurt a little bit, but that is okay. So, Wednesday, we talked about, now that we know what we need to do, now that we know what we're actually doing with our time, are we doing it in the best way, man, or are we focused? Focused on our business, focused on the things that bring us the most business, and do we know what those things are?
So, we talked about tracking those things and then building our time around growing the things that have the greatest return on the investment of our time, our resources, our money, our peace of mind, all of that. So, here we are on day four, and we're going to talk about one of the building blocks of the basics of our business, which is referral business. You know, if you've ever been around me and you've heard me talk about this in the past, you know that there's nothing that irks me more than when somebody says, 100% of my business is referral. I don't like that. I think that if your business is 100% referral-based, then you need to go talk to strangers more. You need to try a little harder. You need to hold an open house.
You need to do something that gets you in front of people who aren't your sphere, who aren't your past clients. Because at some point, that plateaus out, that levels out, right? And so, we want to make sure that business from referral sources is a driver, for sure. I would tell you, if you told me 75% of your business is referral-based, I would say, great job. Like, that's awesome. 25% should be new each year. I love that ratio. For some people, it's opposite. It's 25% is referral and 75% is new. As long as you're putting systems in place to turn that around at some point and you're getting more referral business, great. Doesn't matter to me how you do it. Just, it shouldn't be 100%. So, let's talk about, though, how we maintain great referral business.
And the really simple answer is we stay in touch with people. We talk to people. That's it. It's really, really simple. But it's also really, really hard, especially as your database grows, right? And so, what I would tell you is you hear different people apportion different numbers to this, whether it's a top 50 or a top 100 or whatever that looks like. Everybody in your database should be getting at least four contacts a year, preferably by phone. But I understand that sometimes cold leads, old sign leads, or internet leads, they just get put into a rotation of getting your newsletter once a month. I get it. But everybody who you think is a realistic prospect at some point in the non-distant future should be getting at least a phone call every 90 days from you. And we need to build that into our CRM.
We need to build our contact points into our CRM. But here's the thing. Whatever number it is that you think are your top 50, top 100, top whatever, you've got to have an overwhelming amount of communication with those people. And what does overwhelming mean? It means once every probably three weeks to a month. Depending on who you ask, if you talk to my buddy, Dan Stewart with Happy Grasshopper, he'll tell you that their science over years and years of following this stuff is every three weeks. You talk to some people, it's a month, and we're talking about a difference of seven days there. But what we know is that the average American knows 14 Realtors. That's a lot of people. And the only way that they're going to think of you when the time comes for them to have a conversation with somebody else about real estate is if you've been in front of them most recently.
If referral business is going to drive 75% of our business, then we need to be apportioning a heck of a lot of our time and effort in making sure that those referrals come in and that we're capturing them. My personal goal is that everybody in my database gives me one referral a year. One referral a year is all I'm asking. Now, I have a lot of people in my database. If I were to close a tenth of that, I'd have a hell of a year, year in, year out. That's what we need to be focusing on. One referral per person in our database. But for those special few, that top 50, that top 100, once a month we're doing something, and it's hopefully as personal as we can possibly make it. That doesn't mean don't have client events. It doesn't mean anything like that. It means just have a plan for it.
Make sure that you have a tracking device of some sort that is going to allow you to say, okay, I've touched every single person in this top 100 this month in January. Every single person in February. And whether that's a pop by, a phone call, a coffee, a go out to drinks, dinner, lunch, whatever it is, you've done it. Religiously, consistently, month in, month out, forever. But here's the trick. If you don't tell them why, they won't help you. They might. But if you don't do it strategically. But if you don't do it strategically, they won't help you. They have to know that you are relying on them to send them referrals.
Most human beings, by their very nature, want to help people. When they're put into a position where they can help somebody, they will do so, especially if it doesn't really cost them anything. Especially if they know the person is somebody that's trustworthy and is going to do a great job. They will help somebody. So if all you have to do is say, listen, I asked you to coffee this morning because I want to chat with you about my business. My business grows from referrals. Referrals from people like you. You trust me. You've done business with me in the past. All I'm asking is two things. Number one, when somebody talks about real estate, talks about thinking about moving, anything like that, that you give that person my information. And the second thing is, when you're done talking to that person, send me their information.
We want to train our refers, not just to pass out a business card, not just to forward a contact, whatever that looks like, but also to send us the person that they're talking to's contact. We pick up the phone, we make the phone call, we close that business because we're being proactive and we are making it easy on that referral to use us. Not, I'm going to stick this business card in my pants pocket, I'm going to wash it, I'm going to realize it after. Man, I'm never going to ask anybody, or I'm going to put it in my purse and I'm going to change purses next week. And the next time I find that business card is when I'm packing all my purses in a box because I've already moved. Train your referrers to understand their role in your business and train them to send you the referral just as often as they're sending your information to someone else.
You'll see your capture rate go up enormously if you do those two things. So, we're going to up our business for referrals and we're going to do it by doing two things. Number one, making sure that we have a device that allows us to track our referral basis and what we've done for them on a monthly basis. These are our top 50, our top 100, whatever you want to call it. We're going to do something for each one of them, even if it's just a phone call, one time a month. Everybody else in our database that could be considered a prospect is going to get a phone call every 90 days. And then we're going to train our referrers how to refer and why it's important that they do. Those two things will drive your referral business way, way up.
Hope that that helps. We have one day left. One day left in our series on Back to Basics. Day five is going to be the dirty word, accountability. I will see you then. Thanks for tuning in to Top 5. Bye.
