Word-of-Mouth vs. Online Agent Ratings

How do most people find their real estate agent? Research shows that many consumers ask their friends, family, and colleagues for recommendations. With help from some agent ratings experts, I'm going to explore the problems related to these word-of-mouth referrals. I'll also explore a growing trend in finding an agent: online agent ratings.

A Broken System
There are a variety of problems with word-of-mouth referrals. Two of the biggest I see are:

• Strain on interpersonal relationships. Not only with the agent themselves, but also with the person that referred them. If you ask someone to recommend a real estate agent, the person that they recommend will most likely be a friend of theirs or their own real estate agent. What if you decide not to use the agent they recommend? There's a very good chance you'll run into them at a BBQ, party, or even around town – and it could be awkward. That's just one example of the myriad interpersonal conundrums that can ensue.
• What are the criteria for the recommendation? Most consumers wouldn't ask, but they really ought to – "Why are you recommending this agent?" Chances are, the honest answer would be, "Because I know them and I like them." Does that mean the potential client will like them? Does that mean they're actually good at what they do? Oftentimes, the person making the recommendation has never even dealt with the agent in a professional capacity. I don't know about you, but I wouldn't want to choose an agent who was only recommended because he's on my Uncle Charlie's bowling team.

However, as Larry Romito of Quality Service Certification, Inc. (QSC) points out, "Word-of-mouth recommendations are impactful. People trust their friends and family members and value their opinions." Given how powerful word-of-mouth recommendations are, we can certainly expect them to stick around. So how do you make the most of them?

How to Maximize a Referral
Let's say that someone you know has referred one of their friends to you, the agent. With an understanding of the problems I mentioned above, you can respond in a strategic way.

Here's what you should say: "I know our mutual friend referred you to me, but I want to make it perfectly clear that you should feel no pressure to choose me. In fact, I'll even refer you to another agent right now, if that would make you more comfortable. Because, to me, what's most important is that this process be as smooth and stress-free for you as possible. That being said, I do believe I can help you buy/sell your home. Here's how."

A Better Way?
The Internet has transformed the way we make decisions about everything else in life – which car we buy, which doctor we visit, which hotel we stay in, even who we date – why not use the Internet to help us find a real estate agent? Now, we can – with agent ratings.

Agent ratings allow consumers to provide input on their experience with a particular real estate professional. People searching for an agent can then use these ratings to find an agent that will be a good match for them. The benefits of online agent ratings are numerous:

• Searchers are anonymous – no risk of offending the agent or upsetting a friend.
• Agents are rated based on their professional abilities - the things that actually matter to people buying or selling a home.
• Online ratings are a better option for out-of-towners – if someone is new to an area, they may not have friends who can recommend a local agent.
• Suresh Srinivasan of ReachFactor explains that agent ratings can also be a part of the vetting process, even if a friend has already recommended an agent. By vetting the agent online, consumers can choose an agent more quickly and can feel less anxious about the agent they ultimately choose.
• Doug Fowler of Stand Out, LLC says, "Unlike word-of-mouth recommendations, there's a little more effort required to post a review online. I've heard some consumers explain that, to them, this gives online reviews extra weight."
• Larry Romito says that, "With multiple reviews (as you get with online agent ratings), personal bias is diluted. You're not just hearing one person's opinion, like you are with word-of-mouth recommendations."
• Michael Becker of Mountain of Agents points out that, unlike long, written testimonials, ratings provide information at a quick glance. Consumers want information FAST, particularly if they're looking for it online.

Suresh Srinivasan also looks at the benefits of online ratings from the agent's point of view (not just the consumer's). "When it comes to online ratings, an agent is being discovered – they're not 'selling someone.' This can lead to a smoother sales cycle and even higher commissions," he says.

Inevitably, online agent ratings are (as with everything else) imperfect. Larry Romito explains two of the primary concerns:

• Whether or not the people providing ratings are actual customers (is the rating system "open" or "closed")
• What exactly are the criteria for evaluating performance? Are all respondents using the same matrix for evaluation?

The key is to do your research on each of the ratings sites available to you and to follow a few simple steps to use them to your advantage.

How to Maximize Agent Ratings
So, how do you, the agent, make the most of this valuable tool?

• Make sure you fully fill-out your profile. Include as much information as each site will allow you to. Whatever you do, always include a recent photograph of yourself.
• Encourage happy customers to rate you. This would seem like common sense, but you'd be surprised how many agents let their profiles stagnate because they forget to ask/are afraid to ask clients to share their positive experiences.
• Include a link in your email signature to your ratings sites. This is a less direct technique than actually asking for the rating.
• Constantly monitor the conversation. For more on this, read our article "4 Tips for Managing Your Online Reputation."
• Suresh Srinivasan recommends that you ask your agent ratings vendor about a "badge," something that you can display on your website and on an iPad during a listing presentation.
• He also recommends that you leverage social media to allow homeowners to share their reviews of you within their network of connections.
• Doug Fowler says, "Asking folks to go visit third-party websites can be difficult, so consider using a survey tool that sends them a survey directly."
• Mr. Fowler also recommends letting your clients know from the beginning that "I care enough about my rating to go the extra mile in terms of service and I will ask you for a rating at the end of the sale." He explains that this is also a good selling point as it tells the client that you have accountability.

To learn more about your options for agent ratings, check out our product directory.