Securing a client for life requires innovation and persistence. Real Estate Business explores how the best agents keep their customers coming back year after year.
IT’S A rainy Monday morning in Sydney and I’m preparing for the week ahead.
Sitting on top of my keyboard is a package. I rip it open and out falls a present wrapped in red, black and white paper. The colours are familiar. Accompanying the present is a flyer, a fridge magnet and a business card.
Less than a week ago, I handed my own business card to hockingstuart principal Glen Coutinho at the Real Estate Results Network’s annual Kickstart Conference, promising to organise an interview. The Melbourne (Hawthorn) based principal was a speaker at the conference, captivating the audience with tidbits about how he transforms a once-off customer into a client for life.
I chuckle as his business card and glossy flyer hit my desk. His face is staring up at me, he wears a stylish suit and tie, hand in pocket, and the grin on his face says he knows how to win people over.
I open the present. It’s a cookbook with illustrations and detailed recipes, a small gift but a gesture that is huge.
As my work colleagues walk past my desk, they point to the wrapping paper and cookbook, somewhat confused. Why is an agent mailing you gifts? they ask. But I know exactly why – and he has just made another client for life.
True, I live in Sydney – not exactly his target audience – but who’s the first person I would call if I were to uproot and head south?
“No worries, I’m glad you like it,” he says over the phone when I thank him for the gift. “The objective, nicely, is that if you or one of your friends were going to sell a house in Melbourne then you would think of me.”
And I might. That’s what makes him one of the country’s most prominent advocates of building clients for life.
CLIENT FOR LIFE?
According to LJ Hooker CEO L. Janusz Hooker, it takes a certain type of person – with discipline, patience and persistence – to become a successful ‘client for life agent’.
“Basically, an agent needs to be someone that can look at an individual and say, ‘I promise to give you the best customer service possible and then I am going to be relevant to you and add value to you until you are back in real estate mode’, which on average in Australia is up to [every] seven years’,” Mr Hooker says.
“It takes a very patient person and someone who is committed to the industry and the individual client to be able to do that, knowing there is no pay day for seven years.
“But the most successful people in the industry do that.”
To put it simply, a client for life is someone whom you build a relationship with, says Phil Harris, managing director of Harris Real Estate.
“The true definition of a client for life is actually a friend for life,” Mr Harris says. “An agent gives a client this exceptional service not because they have a house for sale but because they value the relationship.”
According to Mr Harris, a core belief of Harris Real Estate is that client for life practices are essential to an agency’s success, and so they implement a range of strategies to ensure their clients keep coming back.
“Retaining clients is very important to us and so anyone who has ever sold or bought a property from Harris Real Estate goes onto a company-wide database and [they are sent] quarterly market reports and various other communications relevant to them. They also will get invited to movie nights and other perks like that,” he adds.
“This is a great start for our agents to achieve clients for life.”
One of Harris Real Estate’s newest and brightest agents, James Packham, understands the importance of his relationships with his clients and says he is constantly receiving testimonials from happy customers.
“I know my clients would refer me to their friends if they were looking for property because they trust my ability and market knowledge, as well as our strong relationship,” he says.
“In order to have a successful client relationship, the client must be made to feel that they are not a burden to you; rather, a friend with whom you enjoy sharing your passion for all things real estate.”
According to Loretta Douris, principal at the Place Real Estate Ascot office in Brisbane, securing clients for life is also about creating “raving fans”.
“You want to be known in your community as the one agent that gives exceptional service,” she says. “I know I’ve made a client for life if they will talk about me at dinner parties with friends and families.”
Peter Fletcher, social media expert and founder of Real Estate Tribe, a digital marketing company, agrees that clients for life is not so much based on business but on friendship and long-term relationships.
“Isn’t that much more enjoyable? Working with someone you like?” he asks. “It is just a much simpler way of doing business and because you enjoy what you’re doing it involves less resources and so therefore it is more cost efficient.
“I knew of an agent who had serviced one family, selling eight properties for them and three properties to them. He spent no money on advertising – he just simply did a good job of servicing their needs,” he adds.
“If you average a $10,000 commission [per sale], that is almost $100,000 in commissions from just one family.”
When Mr Harris first began working in real estate he knew keeping a good relationship with his clients would benefit him in the future. This is why, more than a decade after he began his real estate career, the Adelaide-based professional’s long-term clients provide almost 75 per cent of his business, helping him bring in approximately $500,000 per annum.
“It takes a minimum of five years to see results and in about ten years you start to grow momentum in terms of financial gain,” he says.
“About three quarters of what I have earned has walked into my office or called my phone. It has created a passive income.”
However, financial benefits are just one element of the many advantages that accompany a strong client relationship, says Mr Packham.
“We are in the clutches of a buyers’ market, meaning there are relatively far fewer buyers than properties for sale. In this environment buyers are the rare commodity. If one can offer service to buyers and in doing so engage them, determine their needs and direct their attention, they have a source of competitive advantage in today’s real estate market,” he says.
“Your own financial success will be a bi-product by way of future referrals, commissions, and disclosed referral payments.”
Mr Hooker, whose company’s myLJHooker website gives members access to over one hundred tips and articles and exclusive member only offers via partners such as Mitre 10, Amber Tiles, Tradelink and Oz Design Furniture, sees client for life as a way to set his company above the rest.
“Thankfully for us, not enough agents are taking a holistic approach to sales so it gives us a big differentiator. But I think over time it has got to be the way forward,” he says.
“The industry is tarnished very much by a catch and kill sort of philosophy, particularly in the sales side, where people are looking very short sighted.
“They look for how much money they can make out of this individual and when that transaction is done move onto the next. If you’ve got a long-term view on your career it just doesn’t make sense.
“It is amazing to see years later when a client wants to sell a property or buy an investment property they bring you back in and you can see how happy that whole family unit is. So there are a lot of fringe benefits in creating clients for life – more than just doing the transaction itself.”
Measuring the success of a client for life strategy can be difficult, but according to Mr Coutinho, any client could be worth up to $300,000, maybe more.
“I can’t really put a number on it, but if someone refers you 15 houses at $20,000, that is a $300,000 client,” he says.
“About 75 per cent of my business comes in through referrals from my clients and the other 25 per cent have seen my face around the area. Repeat business is important for an agent and if you do all the right things then it can really pay.”
While the return from a successful client for life strategy is evident, the work required might sound time consuming.
Ms Douris disagrees: “I really don’t think about all the little things I do; I couldn’t put a time or cost on it. It just happens, it is part of my work,” she says. “I do it because I love doing it for people.”
A client who is happy in their current home and not looking to buy is still a prospect, says Peter Fletcher, adding that this is a chance to show them you are there for the long-haul. “This is a great time to forget the agent’s needs and talk about what the customer wants. Forget about selling and start adding value to the relationship.”
In Mr Packham’s experience, asking the right questions can keep a client interested no matter what stage of the buyer cycle they are at.
“We are favoured in the sense that the vast majority of people have an interest in property; this allows us to talk property outside of a real estate transaction,” he points out. “I can’t imagine a vacuum cleaner salesman having a high level of success breaking into cocktail conversation with the state of the market for cleaning supplies. Luckily we can.
“Good questions quickly flush out where your information might be of value to a client.”
To keep a client in the loop, ask them questions like, ‘How are you enjoying the property? Does it interest you to know you have been in the property for X years today? Do you know anyone who wants to move into the area who might appreciate some assistance?’,” Mr Packham says.
Keeping a well-organised, up-to-date database is important to most aspects of real estate; however, when it comes to making clients for life, it is essential.
“A client for life would be deeply offended if they were to call ‘their agent’ only to discover the agent couldn’t recall who they were,” says Mr Packham.
“With a well-managed database, seconds into a conversation one is able to search keywords such as a name, address or contact number, and a few seconds later you can be recalling information from the client’s file such as their selling history, details of previous conversations with the client, contact details and personal particulars.”
With a database of over 10,000 people, Mr Coutinho believes his customer relationship system has been crucial to his success with clients.
“Having a detailed database is critical. I am reliant on it so I’ve always got a printed version in case the computer dies,” he says.
A true believer in karma, MrCoutinho says he runs his business how he runs his life – with a philosophy of always being good to people.
“I just run a very humble business, I’m always looking for clients at coffee shops, restaurants, out and about,” he says.
This is the same philosophy followed by Tim Heavyside, Real Estate Institute of Victoria (REIV) Residential Salesperson of the Year 2011 and director at Fletchers Canterbury.
“I believe my success really has a lot to do with the way I carry myself and do business,” he said late last year. “I know it may sound sappy, but I honestly believe if you treat people in a professional and kind manner you will achieve better results.”
Mr Coutinho agrees. “If you’re nice to people, people will want to come back to you and you get business.
“That’s my philosophy: be nice to everyone, be straightforward and most of them will come back to you. Don’t give anyone a hard time.”