Being a property manager is not just about managing rental properties, but also generating leads to grow your business. Referral marketing is a very effective strategy for finding property management leads. According to Nielsen, people are four times more likely to buy something when referred by a friend. Another study by McKinsey revealed that word of mouth is the main factor behind up to 50% of all purchasing decisions.
What Is Referral Marketing?
Referral marketing is simply a strategy of spreading the word about a company’s products or services through existing and passionate customers. There is often some form of reward or incentive that is offered to customers who refer others. This incentive could be a referral fee, discount coupons, free subscriptions, or custom rewards. Referral marketing has been used for ages by businesses such as banks, restaurants, airlines, retail stores, health clubs, and even doctors. Property managers can also benefit from setting up their own referral program.
What Are the Benefits of Setting Up a Property Management Referral Program?
Here are the main benefits of a property management referral program:
- Allows word of mouth marketing – Millions of brand-related conversations happen on a daily basis. Referral marketing allows your property management business to reach a wide range of people through simple word of mouth marketing.
- Higher quality leads – People usually refer those who are likely to be interested in what you are offering in order to benefit from the referral program themselves. Referral marketing is, therefore, a great way to find rental property owners looking for property management.
- Loyal customers multiply – Research has shown that customers referred by people they know are likely to stay loyal to a company longer than those found in other ways. According to Wharton School of Business, referred customers are up to 24% more loyal on average than others.
- Increased brand awareness – Referral marketing is a great way of building brand awareness for your property management company. The more your referrers promote your services, the more people will become aware of your brand.
- A channel of engagement – Referral marketing programs allow you to keep your customers engaged via emails, letters, and social media. This provides an opportunity to reward them for their involvement or retarget them with special offers/promotions.
- Cost-effective – Since referral marketing primarily relies on word of mouth communication, your customer acquisition cost will be significantly reduced. Your main cost will be an incentive – which is only paid when a new customer is acquired.
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How to Set Up Your Own Property Management Referral Program
Here is how you go about setting up a property management referral program:
Update your property management website
Create a dedicated page on your website for the property management referral program. The page should outline all the policies and procedures involved in your referral program. This includes:
- How referral relationships are built
- What being in a referral relationship entails
- Relationship expectations regarding promotion and marketing
- Compensation and payout processes
- Payout schedules
To make this page more visible online, be sure to include relevant keywords in the content. Don’t forget to add a form that those interested can fill out to reach you.
Alert your customers
Once your landing page is ready, it is time to promote your property management referral program widely. One of the most effective and unobtrusive ways of asking for referrals would be via a targeted email campaign. Don’t forget to add a call to action at the end of the email.
Here is a sample of a referral request:
Hello <first name>,
I hope this letter finds you well. As you know, I really value the personal and business relationship that I have with you. I’m reaching out to ask a favor. I would like to grow my business by working with more people like you. Would you have any family, friends, or workmates in need of rental property management services?
As you might already be aware, my services include the following:
Finding and screening tenants
Property repairs and maintenance
Handling leases and evictions
Maintaining financial records
I’ll be glad to offer you an incentive for every client you refer to me. If you would like to learn more about the referral program, click the link below.
Besides email campaigns, you can also promote your property management referral program via social media, blogs, and flyers.
Working with past and current customers is not your only option. You could also consider setting up a realtor referral program. This is a reciprocal arrangement where a real estate agent sends you clients, and you also send them clients in return. If you strike a rapport with several realtors in your area and let them know you have a referral program, you will never lack in property management clients.
Provide scripts and marketing materials
To ensure that your property management referral program is a success, you should make referral as easy as possible. One of the ways of doing this is by creating a script that customers can use when referring others. Here is an example:
Hello <first name>,
I hope this letter finds you well.
I just wanted to introduce you to <name of company>, the company that has been managing my rental properties for the past <number of years>. The company offers a wide range of property management services for residential rentals in <location>. With <number of years> years of experience in property management, they have a reputation for professionalism and integrity.
<name of company> has a video explaining more about what they offer. Click the link below to watch it.
Let me know how it goes and if you choose to work with them. Feel free to hit me up with concerns or questions at any time.
You could have a referral kit that contains resources that your customers can share with their family and friends. These resources could include testimonials, case studies, videos, eBooks, and anything else that provides information about your business.
Set up tracking
Tracking is a very important element of a property management referral program. It will ensure that you don’t miss any detail regarding the referrals. Tracking will show you:
- Who was referred
- Who referred them
- Whether or not they were sold or converted
- How you can nurture or follow up with them
If you don’t have one already, you should consider investing in a CRM (customer relationship management) system like Copper, Zoho, Pipedrive, Insightly, and Freshsales. When choosing property management software for this purpose, consider the price, features, reporting, ease of use, third-party integration, and customer support.
If you’re looking for a new funnel for property management lead generation, referral marketing is a great option. Follow these steps on how to set up a property management referral program and soon you will be generating leads.
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