A management perspective on the current status of referral marketing in the property selling industry

Abstract

Increasing role specialization and the partial disintegration of the traditional family structure, social groups, as well as community entities have led buyers (consumers and businesses alike) to search for expert advice on products and services that has been provided informally through local social networks, as family members and peers. Marketing practitioners and theorists also routinely cite the power of the personal referral on customer behaviour. However, relatively few businesses have tried to harness the power of word-of-mouth (WOM). The purpose of the article is to indicate what the current status is of the relationships which estate agencies in the Gauteng Province, South Africa have with their referral market, and to provide recommendations to the management of estate agencies in the province regarding the improved application of the principles of relationship marketing to this market. The target population for this study was 1025 estate agencies, of which 250 managers and/or owners participated through personal interviews in the completion of questionnaires. Data analysis was done by calculating averages and standard deviations, Cronbach α-values, p-values, the paired sample T-test, as well as standard marginal homogeneity test statistics. To strengthen their position in a highly competitive industry, estate agencies need to identify positive word-of-mouth referrers who can form part of their marketing strategy. Information pertaining to the products and services of the estate agency can be provided to these individuals to develop their value-added advantage to the marketing strategy of the business. Finally, estate agencies in Gauteng also need to provide customers with products (that is, property) and service delivery of a high quality. As a result, the estate agency can secure that the communication of their customers to the general public will ensure that the latter will purchase the products and services of the estate agency. Key words: Estate agency, referrer, referral market, referral market relationships.