Referral incentives are a great way to encourage your existing clients and peers to bring new clients your way.

Word of mouth is a powerful marketing tool. It is an inexpensive way to promote your brand and create direct leads without exerting a lot of effort or cash. The key, of course, is promoting word of mouth referrals through your existing network.

The Traditional Route: Money Talks

In businesses that entail repeat visits throughout the year (like a chiropractor or bank) it's easy to thank a client for a referral by offering free services or discounts. This approach can also work for real estate professionals who receive a referral during an ongoing business transaction with an existing client. As a reward for referrals, consider a discount on your fees. You may determine the amount based on a sliding scale. Properties sold at higher price points receive greater cash incentives. You may also want to keep it simple with a flat rate. Either way, money talks, and it is a great way to encourage existing clients to spread the word.

Yet for the average agent, the same client isn't making multiple transactions each year and most referrals will come after a single deal has closed. In that case, gift cards come in handy. Giving someone a $50 gift card for a referral when you've just brokered a $500,000 deal– that came to your doorstep–isn't a bad trade at all.