Are You Kidding? Why Would I Refer Business to a Competitor?
Seems totally contrary to common sense, doesn’t it? In a way, of course, all Realtors in your market area are competitors, even if you have office space in the same firm. And in today’s barely recovering market, why would you give up even one small piece of business? So we will go against conventional wisdom, and give you four ways in which referring a client to a competitor may work to your advantage.
- You lack the appropriate expertise
- The client looks like a major headache
- What goes around comes around
- It builds good will and lasting relationships
So keep an open mind and read on. This could give you a whole new perspective on referrals.
- You lack the appropriate expertise. Not everyone is a specialist in every finely nuanced aspect of real estate. If you’ve carved out a market niche with senior clients or young single millenials, you may not be at the top of your game in short sales or multi-family properties. But you know someone who is. Be open and honest both with your client and with the Realtor you’re referring to. You’ll be building credibility with both of them. Why? Because if you would outright refuse to give a lead to a competing Realtor—even if she is better suited to serve the client than you are—then you cannot truly be trusted. What you’re really saying is that you would always put your own interests ahead of those of your client. In the long run, no one benefits from this philosophy.
- The client looks like a major headache. Now on the surface, this might look like a selfish act on your part—get rid of the headache and let it become somebody else’s migraine. But maybe it’s not. What we’re really talking about here is relationship selling (which we heartily endorse) vs. competitive selling (which provides its own brand of headache). So if one of your competitors is the type of sales person who will take on any challenge in order to make a sale, he or she may actually appreciate the opportunity to take on that headache. And chances are, you would have never managed to create a real relationship with that client anyway. Who knows? Somewhere down the road that Realtor may refer to you a client who’s just not his cup of tea. Which brings us to our third point:
- What goes around, comes around. Call it karma, fate, providence, or luck but it’s the truth: what you put out into the world, you get back. Put another way: you have to give in order to get. Or as expressed in the Golden Rule, “Do unto others as you would have them do unto you.” So what does that mean in the real world of real estate? It means if you refer a valuable client to a competitor for whatever reason, your client roster will ultimately benefit. Oh, it may not happen this week or this month, but your name will start to be mentioned in a positive context, even by your competitors, and one day you’ll get a call: “I’ve heard great things about you, Joe, and I’ve got a client I’d like you to work with.”
- It builds goodwill and lasting relationships. As we mentioned above, we’re big proponents of relationship-based selling. Relationship building is the core of a successful Realtor’s business. It starts with good, open communication between you and the client. It means you go out of your way to understand the other person’s needs. You take time to get to know what causes them pain, what makes them happy. That’s how you know if you’re the right person to handle their business. And although you may not be right today, tomorrow could be another story. You may not be the right Realtor for Martha, so you refer her to someone who is. But you’ll be great with her Uncle Ed, her Cousin Liz, her Grandma Millie. And she’ll send those referrals your way, because you have a relationship. The one sacrifice you’ve made is time—time to get to know Martha. Building this kind of relationship takes time and requires focus and perseverance, but if you do the work and enjoy the process it results in a win-win for everyone.
There is really no need to see “competition” as a bad word. In fact, try this: you can actually reframe “competition” as “possibility.” Knowing that another Realtor can do a better job for a client than you can—that’s possibility. Knowing that you have to be the best you can be at all times, even though you don’t know it all—that’s possibility too. Get away from a scarcity mentality. There is always enough to go around, especially when you live in an attitude of possibility.