Lead Generation: The Battle Between Referrals and Farming

What is Lead Generation?
Lead generation is the act of gaining interest and trust in a product or service to develop a sales deal. But what does that mean for you as a Mortgage Lender or Real Estate Agent? We believe it means building relationships with people (you know, or you want to know) so that they gain trust that you will bring value to them. In turn, they go to YOU as their “expert” in the Real Estate and Mortgage industry.

Through building these relationships, you build a database of potential clients that will help you maintain a healthy business now and in the future. But what is the right lead generation style for your market?

This can be a tricky question for some but evaluating the benefits and difficulties of two proven lead generation methods can help you decide which is right for you and your business.

Referral Based Generation
Referrals are something that most agents and lenders tend to overlook because they think asking for them will make them look desperate. Right? You have not asked for referrals from people who know, like, and trust you because you don’t want them to think you are begging for business. But guess what? You need leads to move forward and make more deals, that’s what you are in the business of … making deals.

You have worked hard and invested a lot of time to provide the best possible service and experience for your clients. So, take the simple extra step and ask them if they know of anyone that could also benefit from an expert in the industry. Do they know someone interested in refinancing? Is their cousin’s boyfriend’s brother looking for a first-time home? Whatever it is, all it takes is four words to start the conversation: “Who do you know?”

Another great resource for gaining referrals is by building a VIP Program. VIPs can be anyone from family members, friends, business associates, and your employees. Make them a part of your marketing efforts, you’re already talking with them frequently. Your VIPs will be your best referral partners if you just ask.

It may feel uncomfortable, but your clients are expecting you to ask. Most of the time they are already thinking about someone they know that could use your services. So, you are doing yourself a disservice by not asking during or after the process. Don’t miss your opportunity to gain free leads.

Farming for Leads
Farming for leads can be a great way to showcase your business in an area that otherwise might not know you. It is a tedious task and may take upwards of 12 to 24 months to see any traction. But if you have the time (you still have a strong database of referrals and clients) and the money, farming can prove to be successful.

Find an area or a market that you know you can grow in and learn everything there is about that market. What is the average income? How long do people live in one home before moving? Who else works that market? Make yourself an expert so you can provide value and validity to potential clients. They don’t know you… yet!
Once you get to know everything there is about that market, it is time to put your boots on the ground. Mailing marketing items to potential clients helps you maintain a fertile planting ground in your desired market: new listing postcards, evidence of success letters, local business coupons can all be used to help your potential clients get familiar with your name and business.

This approach to lead generation is hands-on and can tend to be costly (time and money), but many agents and lenders find it a more comfortable marketing tactic than directly asking for a referral. However, you can only prove your success and trustworthiness so much through a piece of paper or mail. You may have to become more creative down the line to keep interest.

Referrals or Farming
Both can provide success, but sometimes you have to get out of your comfort zone ask difficult questions. Is it worth the money? Are my clients happy with my process enough to refer me to a friend? What works for my budget and business model?

We believe the key is a heavy percentage of referral-based lead generation that will help maintain your database on a day-to-day basis, providing more loyal clients. Then you can supplement a small percentage of lead generation with farming if you are looking to grow into a new market. But you must be patient and grow both of your skills consistently.

Ready to take the next step?
Do you need help staying accountable for your business’s growth? The CORE is a mortgage & real estate coaching company with real testimonials and teaches our clients to know and track their numbers, give back to others and the community as well as our coaches who are active in the business. We pride ourselves on being authentic and transparent. If you are interested in knowing more, sign up for a FREE Coaching Call today! Make More. Save More. Give More.