The problem with referrals being totally random.

CRE Success Principle: A referral is not a listing on a platter. The agencies that convert the most opportunities are disciplined enough to follow their sales process, even when the prospect arrives with goodwill.

A lot of commercial agents treat referrals as a reward for a job well done, but that’s not the entire story.

Yes, delivering strong outcomes matters. But the agencies that consistently generate referral opportunities usually have something else in place: a strategy to get more of them on a consistent basis.

Relationships Create Referral Momentum

Referrals flow from relationships, not just transactions.

That means your clients (and other contacts) need to clearly understand the value you are delivering throughout the campaign, not just at the end.

One of the simplest ways to do this is by weaving the “so what” into your reporting.

Do not just report activity. Connect the activity to the outcome and explain why it matters.

I also believe testimonials play an important role, because every testimonial reinforces the client’s positive experience and reminds them why they would confidently recommend you to someone else.

A Better Way to Ask for Referrals

One insight I recently revisited came from a listener who shared a simple three-question framework:

•  Do you know anyone I could add value to?
•  Is there anyone you think I should speak to?
•  Can I mention that you recommended I get in touch?

That final word, “recommended,” shifts the tone. It feels more like an endorsement than a favour. 

Warm Referrals Still Need a Sales Process

This is where many agents lose momentum.

A referral may get you into the room, but it does not close the deal. You still need to qualify properly, uncover motivations, confirm timelines, and follow your normal process.

In fact, referred opportunities deserve even more discipline because the stakes are higher.

If you want more referrals, build systems around relationships, communication, and process consistency.

And if you want the full breakdown of the strategy, listen to episode 268 of Commercial Real Estate Leadership.

Episode transcript:

When you receive a referral, it feels like a bit of a reward for a job well done.

But what if a referral was not a reward, but rather the result of a good system?

I think the difference between commercial real estate agencies that get referrals occasionally and those that get them consistently comes down to a few specific behaviors, which we are going to cover on today’s episode.

This is episode 268 of Commercial Real Estate Leadership. My name is Darren Krakowiak. I am here to help you lead better, grow faster, and stress less.

And today I want to do a bit of a refresh of a previous episode, episode 209, where we talked about referrals. But I am going to introduce some new elements that were not in that episode the first time around.

So let me just do a bit of a recap of some of the most important points from that episode. Referrals flow from relationships, not just the results that you produce.

So, you have got to be delivering great work and also investing in relationships beyond the transaction in order to have referrals flowing into your business.

Now, when you are working with clients, I think it is really important to make sure they understand the value of what you are delivering.

So, we have got to weave the “so what” into your reporting.

So don’t just tell them about activity that has come off the back of a campaign—connect it to the outcomes and highlight your worth when you are sharing that information with them.

I think that is what makes clients feel like they are working with a good agent, not just one who is doing their job.

Another thing that we talked about in that episode is the testimonial effect. So being on the lookout for triggers—for opportunities to ask for a testimonial.

Because when a client writes a testimonial, they are reminding themselves of what they appreciated about working with you, and that reminds them of what it is that they might say to somebody else if they were looking to refer you.

And one of the other key points from that episode is this concept of a five-star client.

So, we do not want to generically ask for referrals—“Hey, do you know anyone who might be a good client for me?” We want to actually name up to five attributes of what your ideal client looks like.

So, the person who you are asking to refer you opportunities—their reticular activating system is going to be on the lookout for people with those specific attributes.

So that is the foundation of referrals. And what I want to do is just add a little bit more information to that previous episode. As I said, it was episode 209 when we covered that topic.

And I want to start off with a bit of listener feedback because Mick contacted me after the airing of episode 253.

And that was an episode where we talked about what I would do if I was just getting started in commercial real estate. And it was part of our “best of” series that we just wrapped up a couple of weeks ago.

Now, that episode is talking about new agents, but I actually think the point that Mick made—and a couple of the points that I was making in the episode—also represent a great referral strategy for people who do not, I guess, naturally have as many opportunities to ask for referrals, but also anyone who is experienced.

Because the three-question framework that Mick provided is a great way to get more conversations happening, and conversations are where conversions happen.

So, the three questions that Mick recommended—particularly for people who are newer in the industry—but again, I think this framework can work for everyone:

Number one is: do you know anyone in the industry that I could add value to?

The second question is: is there anyone you think I should be speaking to? For further advice was the context around that, but it could be about anything.

And then question three: if they say yes, can I contact them and mention that you recommended me, or recommended us, to get in contact?

And when Mick contacted me about this, he highlighted the two psychological mechanisms as to why this three-question framework is effective.

The first one is that it turns people into connectors, right? So, people enjoy being the person who introduces two good people because it elevates their status with both of those relationships.

And, you know, when you are doing this, you are not really asking them for a favor—you are giving the connector the opportunity to be that person, to step into the connector identity.

And it is also a bit of an ego rub, right? When someone hears so-and-so was the person who said, “I need to speak to you,” that creates, one, a powerful first impression for you. But also, the referral is arriving warm, and the receiver feels good, and everyone just gets elevated a little bit in this situation.

So, the sequence works because it works well with newer agents who are building their networks, but I think it is underutilized with experienced agents.

And the key word is “recommend,” not “refer,” not “pass my name on.” “Can I contact them and say that you recommended that I get in touch?”

That shifts the framing a little bit from a transaction to more of an endorsement.

Now, Mick believes in referrals so much that he and his team’s email signatures all have a CTA in the signature for referrals, which is not a bad way to keep referrals top of mind.

I think it will work better also if you are reinforcing that with the specific request that we have just run through, along with looking out for those triggers to ask for referrals—often at the end of a transaction process.

Now, the other thing that I did want to cover today is the importance of not overestimating the value of a referral.

So that might undercut a little bit of the whole purpose of this episode because referrals are so valuable, and being referred to a prospect on a warm basis is a good thing but it is also a double-edged sword because it can create a false sense of security.

So, what I want you to remember is that sometimes a referral gets you in the room—it gets you into the process—but it does not necessarily close the deal.

And I think the mistake that can be made—and I am guilty of having made this mistake myself—is that you can treat the referral as a shortcut past your typical sales process.

So maybe you do not qualify as much because you think that they have been referred by somebody who is already qualified.

Perhaps you let the referral communicate your value, as opposed to making sure that the prospect really understands why you are the right person to be working with them.

Maybe you assume that the goodwill that you have received from the referrer is going to carry you across the line.

The reality is, a warm referral means the prospect trusts you enough to take the meeting.

It does not mean they have decided to hire you. And the conversion still depends on how well you run the process from the time that you receive the referral.

So, the lesson that I have learned from when I have received referrals that have not converted is that I have got to always follow my process.

So, with referred prospects, that means exactly the way that we would treat any other prospect, we follow the process with them.

We ask the same diagnostic questions. We really try to dig into what their motivations are—what is motivating them to do something—and also what is it that they are pulling away from, to create some distance between us and whatever that fear or frustration is.

We want to make sure that we confirm the timeline, we present in the same way as we usually would, and we follow them up in the same way as well.

I think, if anything, a referred opportunity deserves more discipline, not less, because the stakes are actually higher.

If you lose a cold prospect, it costs you the deal, okay?

But there probably was not a very high probability of conversion if they were a completely cold prospect.

I think if you lose a referred prospect, there are a couple of problems.

Because first of all, the person who referred you might question your value. They might think twice about referring someone your way again because you did not get it over the line. They might be wondering why it is that the person who they referred to you decided not to work with you.

And it is really a waste of a good opportunity.

So, it is really important, I think, when you are referred opportunities, to make sure that you treat that referral—treat that prospect—just as well, if not with even more care than you would any other opportunity, any other prospect that comes your way.

Because the referral opportunity opens the door, but you have still got to walk through it and do all of the work to get it over the line.

So just as a recap, I want to cover off Mick’s three questions.

Number one: do you know anyone in the industry, in the market, that I could add value to?

Question two: is there anyone that you think I should speak further to? If you do not have a lot of experience, it could be for further advice. If you do have a lot of experience, it could be about whatever it is that you want to talk about.

And if they say yes, you can ask them: can I contact them and mention that you recommended it?

So, that is those three questions. And I think the “recommended” framing really makes the ask feel like an opportunity, not just a favor.

And I would recommend that you also have the discipline to run your full sales process, even when a referral makes you feel like the job is half done. Because it is not done until it is done.

And as I said, this is a lesson that I have learned—sometimes the hard way.

You do not want to waste a good inbound referral by not following your process to the T, because to do any less than that, I think, is really letting yourself down and also letting down the person who had the goodwill to refer that opportunity to you in the first place.

That is our episode for today. Thank you so much for listening, and I will speak to you soon.