There have been numerous studies done on client retention over the years, and while the exact figures vary, most suggest that it can be anywhere from five to 25 times more expensive to acquire a new client than to keep an existing one. As real estate professionals, we know this. But we also know how easy it is to get caught up in chasing the next deal and unwittingly neglect our existing sphere of influence.
According to the National Association of Realtors, 67% of sellers were referred to their agent by a friend, neighbor or relative; or used their agent previously to buy or sell a home. 74% of sellers say they would use that same agent again, or recommend them to others.
Yet, even so, 70% of sellers can’t remember the name of their agent a year after closing. This disconnect, which can be attributed to a lack of follow-through when it comes to nurturing existing client relationships, could be costing your real estate business major time and money. But we can change that.
Here are four secrets to mastering client retention:
Intentionally build your business to be a referral business.
Start by tracking your current business. Where are your leads coming from? Where are the closed transactions coming from? Understanding where business is coming from and which of those leads are actually resulting in closed transactions is powerful information in understanding how to build a strong base of repeat and referral business.
To that end, as your business grows, you’ll have less time. Find a good referral source that you want to work with long-term to provide support. Eventually, you can build a business that will run primarily off of someone already in your sphere, repeat clientele, friends and family or referrals, and you will not need to rely on outside resources to fuel your business.
Set, and stick to, client retention goals.
Repeat client business doesn’t happen by accident. Like any other aspect of your business, you need to set goals directly related to this objective in order to hold yourself accountable. For example, when you’re just starting out in real estate, you’ll need to put in sweat equity. Personally, I held myself to the goal of hosting four open houses per weekend. I contacted every prospect I met at those open houses, sending them potential listings that met their criteria along with personal notes based on our conversations. Through this, I built a strong prospect base that became a mine for repeat and referral business.
Most importantly, you must be available and responsive. Always answer clients and prospects when they reach out and be sure to get back to them promptly. 82% of sellers contacted just one agent before selecting someone to assist with their sale.
Develop a methodology to keep and nurture clients.
This should go without saying, but it’s critical to stay in touch with clients beyond the transaction of helping them buy or sell a home. Real estate is ultimately a personal business. Make it easy for yourself by creating a protocol for nurturing relationships.
For example, we reach out to our client base 17 times a year, with one high-touch outreach happening every three weeks, above and beyond email marketing. These could include a personal note, an offer to grab coffee or an invite to an industry or community party or event. Don’t be afraid to get creative — one of our top producers hosted a client appreciation derby party. With the goal set and the protocol in place, the follow-through becomes much easier.
Set a higher standard of service.
Memorable experiences and high-quality service keep clients coming back in any industry. In real estate, think about the ways you can elevate the experience for clients. A simple, but effective practice our team has adopted is being selective with our vernacular and the way we talk to clients. For example, it’s not a deal, it’s a transaction. It’s not a commission, it’s a brokerage. It’s not a company, it’s a firm or practice. Across the entire Engel & Völkers network, we refer to ourselves as advisors, not agents. These small details stick with clients long after a transaction has closed.
Like a family’s wealth manager, clients pass their connection with their real estate professionals down through generations. They tell their friends and colleagues when they’ve had a particularly good experience. Your past client base is rich with potential new business — both referral and repeat. However, this business won’t just appear on its own. You’ve got to be intentional about your client retention strategy in order to nurture repeat business for years to come.
Bret Snyder is a license partner at Engel & Völkers Bozeman. He has helped cultivate a successful brand presence across the state of Montana, where Real Trends has ranked Engel & Völkers advisors as 11 of the top 20 real estate agents by volume and seven out of the top 20 recognized as America’s Best.