Living Life by Design

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Research giant Nielsen says that people are 4X more likely to buy when something has been referred to them by a friend.”

In a world largely consumed by social media, you can easily understand and recognize how much people look for validation from others to make decisions- especially large financial ones. Knowing the importance of creating a positive customer experience that is worth sharing will put into perspective how significant referrals truly are in building your business. People are four times more likely to choose you as their lender if a friend tells them about you.

Mike Seminari, a MortgageSAT expert, provides us with some insight on the statistics behind referrals. According to a recent research panel conducted by STRATMOR Group, 64 percent of borrowers are reading online reviews before making a financing decision. However, only 10% say their main reason of influence was based on online reviews. The study proved “borrowers continue to connect with realtors, friends, family, and co-workers as their primary way to find a lender.”

• Realtors are the primary source of financing information at 45 percent.
• Friends/Family/Co-Workers are next with 25 percent. Existing relationship with the lender is third with 18 percent.
• The Internet is a distant fourth place with just 8 percent.

Here are a few things to be aware of when considering your online presence and reviews.

• Understand where you should focus your time. Be efficient and effective with your resources. Don’t put all your eggs in one basket. “If you focus all of your time, money and energy on promoting customer testimonials at the company level, you misunderstand how online reviews are being used.”
• Be wary of companies who promise boosting your online reviews and ratings as a magic bullet to grow your revenue. In looking at the statistics, online reviews are looked at for more of a confirmation rather than driving organic growth. They simply reinforce their already made decision. Know getting referrals
• Focus on creating raving fans. “Instead of chasing the 8 percent who search organically or the 10 percent that make decisions based on reviews, focus your attention on transforming your company into a machine that creates more highly satisfied customers.”

While the above study was done specific to mortgage finance, I believe it still holds water when thinking about agent referrals. As you talk to your agents this week, share with them this study. Let them know that they are part of this transaction and that likely the majority of their business is coming from referrals and not what they do on-line. The pattern today is that someone gets a referral and they validate that person is an expert by what they do on-line and through on-line reviews. Ask your agents what their plan is to capture on-line reviews and to boost referrals from their past clients and sphere of influence.