We all know that referrals are crucial for success in real estate. But how much should you send as a reward? You want to send enough to make your customers feel appreciated, but not so much that it breaks the bank.
When choosing how much to send your clients as a reward, consider what your clients will value and what makes sense for your business.
Offering rewards is an effective way to incentivize clients to refer others to your services, but it’s hard to know how much to send. This blog will help you determine the right amount for rewards and provide some examples in real estate.
First, consider a few things when determining how much to send your clients. Keep these things in mind when creating a rewards strategy.
Now, let’s go through some reward amounts for specific examples.
Let’s start off with rewards for referrals. This will greatly depend on the value of homes that you sell. Here are some examples:
High-Value Transactions (Luxury Homes): For luxury home sales (e.g., $1 million and above), rewards on a Locorum card could range from $1,000 to $2,000.
Standard Transactions (Average Home Sales): For average home sales, rewards can range from $500 to $1,000.
For builders, we usually see budgets of $1,000+ for the referrer and referee. For realtors, we generally see $250 to $1,000, depending on the home value.
While it's important to be generous with rewards, it's equally important to ensure that your rewards program is sustainable. Adjust reward amounts based on the potential commission from the referral. Then, regularly review the performance of your rewards program and make adjustments as needed.
Instead of sending a client a gift basket, consider sending them a rewards card so they can spend it on what they need for their new home. This one really depends on the home value and what is in your budget. On average, agents spend 2-3% of the commission on their clients, which is a good benchmark.
Gift regards can range from $10 as a birthday gift to $100 for a home anniversary. These are generally smaller reward amounts and are a nice add-on to make clients feel valued. We recommend sending anywhere from $10 to $100, depending on the client's value and your overall budget.
Consider creating an annual budget for customer appreciation per customer. Then, divide that amount into multiple rewards to increase your communication. For example, if you set out that you’re going to spend $100 per year on each customer, you can split up your rewards like so:
Contests are a great way to increase your reach and keep clients engaged. A rewards card is the perfect gift. Consider running contests such as a monthly draw, question of the month or annual customer appreciation. The reward amount will depend on a few factors:
Overall, we recommend offering $100 to $1000.
Finally, let’s talk about rewards as incentives for completing an action. Separate from referrals and closing gifts, think about offering rewards for joining your webinar, signing up for a home equity report, or getting a friend to sign up. These don’t have to be huge rewards. Consider sending $10 to $25 for every person who completes or having everyone who takes action enter a draw to win $100 to $250.
Choosing the right amount to send as a reward is crucial for the success of your referral program. By offering competitive and thoughtful rewards with Locorum cards, you can enhance client loyalty, encourage more referrals, and boost your overall sales. Implementing a referral program that aligns with your business goals and client expectations is key to long-term success.