Within the real estate industry a trend has established itself and is now rapidly gaining momentum. It’s all about client relationship management.
With markets flat – by and large – and with little growth expected in the immediate future, agents have to work hard to generate listings and drive sales. Those with a solid database and excellent client service capabilities are getting results. They’ve created solid client relationships and know how to maintain them.
As with most business sectors and industries, the best – and often the least expensive – business is generated through past or current clients. You have a warm relationship, you’ve built rapport and if you’ve serviced the client well and provided a good experience, when they next need help they’ll most likely return to you.
It’s called creating ‘clients for life’, and estate agents now realise that churning from one new client to another is no longer the smartest way to operate.
Mark Smith, principal of First National Real Estate North Sydney, says agents have previously failed to hold on to clients because, basically, they have not serviced them properly.
“It’s really rather simple: you need to ensure that you keep in touch with your clients and continually monitor their needs as they change constantly,” Mr Smith says.
“Some clients continue to acquire property, while some like to turn it over and will often divest themselves of non-performing properties or they will upgrade. Agents need to be constantly in touch with their clients and to keep up to date with their needs.”
Client retention is all about forming a relationship with your client and then becoming a part of their decision-making process so that they come to you for advice, and rely on this advice.
To do that successfully, agents need to be able to provide up-to-date information on what is going on in the marketplace and to monitor the trends and developments that are relevant to the client’s needs.
But Amanda Langlands, sales consultant with PRDnationwide Coffs Harbour, says the agent’s obligations extend even further:
“I believe it is my duty of care to provide my clients with clear information so they can make informed decisions,” she says. “They need to feel empowered yet guided.
“If you do not keep in contact with your clients they will walk away –particularly in a harder market, as they will be looking for someone to blame.
“In many ways, the industry needs to pull its socks up when it comes to client servicing. It starts with each individual agent and it doesn’t have to be hard. It’s time to get back to basics and not get carried away trying to reinvent the wheel,” Ms Langlands says.
“We spend too much time thinking of corny ways to attract the attention of new clients when it really is as simple as looking after current clients.
“They are your best advertisement. Every time you have a satisfied client you are sending out a beacon of good advertising – they’re walking around your town.”
Many happy returns
So what’s the business case for client retention? How does it represent a good return on investment?
The examples speak for themselves. Mr Smith’s business conducted an audit of its entire sales and leasing activity over a 12-month period to determine where business was won and the effectives of its prospecting activities.
“More than 90 per cent of our business was repeat or referred,” he says. “It is far simpler to retain a client than it is to generate new listings. In addition, by staying connected with a client you create a ‘spokesperson’ for your business – if you have a satisfied client they are out there talking to their friends, colleagues, family and other financial advisers.
“Referral and repeat business is absolutely the key to spending more time making money and spending less time generating [business],” he says.
Ms Langlands agrees: “Building a reputation as a trustworthy hard worker in the industry will mean you do not have to invest as much time in chasing new listings and competing for business.
“You will spend more time working with people who are serious about selling and you can be more selective about the properties you take on.”
It’s not rocket science
There’s no mystery or secret formula for creating a client for life. All agents have the opportunity to strengthen client relations – it’s just a matter of having the right approach and taking the right actions.
Clients are likely to switch agents unless they feel they are receiving a comprehensive service.
The only way you can truly achieve a client for life strategy is to create and actively manage a client database, the lifeblood of any real estate agency.
“A well kept database is like gold,” says Ms Langlands. “If you have not got one, start now! If it is full of inaccurate information, then clean it out!
“The database is the key to keeping in touch with your clients. The information technology era has streamlined keeping in contact. People generally are much more open to being contacted via email – as long as you are not filling their inbox with rubbish.”
“You cannot assume clients are going to continue to deal with you unless you’re absolutely up-to-date with their needs,” adds Mr Smith. “This all comes back to providing them with market information, current trends, local market activity and maintaining regular contact. “You could consider offering an annual assessment of their portfolio free of charge, for example, giving clients advice on how the portfolio is performing and whether or not they should be looking at alternative investments.”
According to Mr Smith, the formula is simple: treat all clients as ‘VIPs’ – ‘Visit In Person’.
“There is no better way of communicating than face-to-face.”