Reward the Behavior, Not the Result

Last time on the Playbook we wrote about Brian Buffini’s suggested strategy of our getting three referrals from each of our current clients during the time of an active transaction, and how we can fine-tune their reticular activator so they’re alert to opportunities to tell folks about us. So, now that you’re thinking about referrals—thanks to that reticular activator—let’s dig into one of the best tactics for delivering on that strategy.

We all no doubt say at least a quick thanks to the person who gives us a referral—and then often times we’re off to contact that potential new client and we maybe even start calculating the potential commission dollars that may roll in. Oh, sure, if a deal comes from the referral, we figure we’ll remember the referral source and do something nice for them. Maybe something even really, really, nice!

But here’s the problem—and the opportunity!

Brian Buffini, in his Peak Producer training, often brings in a guest speaker, a very successful broker/owner from Chicago named Joe Niego. Niego tells the story of how, years ago as he was improving and growing his business, his brother called him up and gave him a solid referral. Five or six months later, that new client closed on a house and Joe, remembering and appreciating his brother’s referral, sent him a nice gift basket. But here’s the rub: his brother called Niego the next day and said “What’s the gift basket for?” He of course made no connection with the referral he’d given months ago and may have even forgotten about it. Talk about a wilted reticular activator! And a missed opportunity.

Niego and Buffini use this example to make the point that, when someone gives us a referral, we need to reward the behavior, not the result!

First of all, if we reward the result, that is, commission dollars in our pocket, our thanks to our referral source may start to feel like part of a transaction instead of part of a relationship. Buffini warns us to avoid making such rewards feel like quid pro quo and instead make them something unexpected as opposed to earned. He also recommends the “reward” be a token or symbol of our appreciation—and something the recipient will enjoy—rather than a significant financial incentive. So would the tax man!

Second, and more importantly, Buffini points out that by immediately rewarding the behavior with that token gift of appreciation, we keep our friends’ reticular activator up and seeking new targets! Niego, in fact, tracked statistics on his referrals once he figured out this approach, and he found that 76% of the people who gave him a referral, and were immediately shown his appreciation of their behavior, gave him a second referral within 90 days!

Now, that sounds like a great way to grow a business!

So remember, growing your business through proactively seeking referrals is the surest way to a steady and growing business, and a major step is to remember to reward our advocates’ referral behavior immediately! Then be ready when they call you up again with another!

David M. Hassler

VP, Director of Business Development