Advice and Opinion

The importance of an effective referral / lead generation system for estate agencies

An effective referral or leads generation system can be an effective tool for any estate agency says the Rawson Property Group.

It is a provable fact that South Africa’s major estate agencies are in most cases growing at a rate that, with some very obvious high profile exceptions, is faster than that of the smaller agencies – and one of the main reasons for this, says Bill Rawson, Chairman of the Rawson Property Group, is that there are massive benefits for an estate agency and their clients to operate on a national basis and to make the most of countrywide referral networks.

“In any one month, anything from 10 to 20% of the group’s sales will have come about as a result of referrals/leads from another Rawson franchise or from another estate agency with which we have an established business relationship,” he said.

In the latter case, said Rawson, it is of the utmost importance to be able to instil confidence in the partner agency and to make its leaders realise that one’s own operation is not a threat to theirs’ and that the trust given will never be abused in any way.

Just how significant the referral system can be is shown by the sums paid out in commission to those who have supplied a referral/lead which has resulted in a sale. From January to November 2014, the Rawson Property Group paid out R5,2 million in referral commissions to other franchises in the group and a staggering R23,4 million to other agencies with whom they partner.

These fees, said Rawson, are generally based on the commission that results from the sale and the cut given to the referee can be anything from 10 to 50% of the commission. Year-on-year, the sums quoted have increased by a significant amount, the two previous pay-outs respectively for the same period in 2013 being R4,2 million and R19 million.

There will always, said Rawson, be some estate agencies who adopt a go-at-it-alone stance and do not cultivate a referral network. This, he believes, is short sighted.

“We have franchises where in certain months, 40% of their turnover has been generated by referrals/leads. To ignore this means that they are losing turnover for their agency.”

One of the big benefits of the referral system, added Rawson, is that to an extent it is very personal and “like an endorsement”. The referee will usually know a fair amount about the operation to which he is referring his client and he is able to vouch for it. In the case of a national group like the Rawson Property Group, he may well have met his colleague at some group training get-together and they have probably discussed how to make referrals truly effective. Thereafter the use of the in-house mobile communication equipment makes it possible for the parties involved to keep in touch round the clock and to send through data and photographs which will greatly assist the buyer in his search for a new home, especially in a different part of the country.