Keeping past customers coming back should be easy…
After all, you don’t need to “sell” them on your service and phone calls to them are warm and friendly. In addition, if you did your job right, they know, like and trust you.
So, why do so many agents fail miserably at retaining past customers? And how are you going to ensure, as you head into the new year, that you keep your past clients present?
Beyond this being a smart question, it is also an important financial decision.
The following are some statistics that explain why you should strive to remain top-of-mind with former customers and some tips to help you do so.
The puzzling facts
Nearly 90 percent of real estate consumers surveyed by NAR say that they would use their agent again and that they would recommend their agent to others.
Yet the same statistics show that, sadly, only 12 percent of consumers actually used an agent that they had worked with in the past. Dive deep into these numbers and you can easily see that real estate consumers want to use the agent they’ve worked with in the past,
Yet curiously, few do.
And, it’s a safe bet that they don’t because they forgot about the agent and went with one referred by a friend, family member or colleague.
A financial reality
“Depending on which study you read, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one,” claims Amy Gallo at Harvard Business Review.
In fact, there’s a formula you can use to determine just how much chasing after new business costs you each year.
Divide your total marketing and sales costs (what you spend on gas driving buyers around, listing expenses, etc.) by the number of new customers you acquired during the year.
Scary, isn’t it? Those are some expensive customers.
Former customers, on the other hand, are gold mines. “Increasing customer retention rates by 5% increases profits by 25% to 95%,” according to Frederick F. Reichheld and Phil Schefter of Harvard Business School.
How’s your past customer list looking? If it appears dry and parched, it’s time to try nurturing it.
Customer retention strategies
Remaining top-of-mind with former customers doesn’t have to be an expensive endeavor, although the larger and splashier the “touch,” the more memorable you’ll be.
Less expensive ways to keep in touch are the no-brainer methods that tend to fall through the cracks of the busy agent’s schedule.
- Drip email campaigns
- Monthly direct mail, of interest to your customers, such as newsletters and market updates
- Birthday and anniversary postcards
- “Or offer home maintenance reminders (e.g., changing out smoke detector batteries once a year),” suggests Melissa Dittmann Tracey at realtormag.org.
Face-to-face
Some experts recommend a quarterly face-to-face visit with former customers. Take them to coffee, happy hour or lunch. Or to get the most bang for your customer-retention buck, throw some sort of annual customer appreciation event.
It can be as lavish as the black-tie event Buyer’s Edge agent Steve Israel holds (complete with orchestra and catered food), or as simple as a casual backyard summer barbecue.
You might even consider an event that not only brings your past customers back into your sphere but benefits your favorite non-profit as well.
Kathy Broock Ballard invites customers, past and present, to “The Annual Erin Go Bra(gh) Party” on St. Patrick’s Day. She asks that they bring an item of clothing for the local women’s shelter and in return, lunch and an open bar are theirs to enjoy.
An agent in San Francisco holds a crab feed every year during Dungeness season. He holds it in partnership with a lender and title company to keep expenses to a minimum.
Don’t forget to ask
Whether it’s one-on-one or as part of an event, don’t forget to ask former customers if they know anyone who may be thinking of buying or selling real estate. Focusing your “ask” may bring better results, according to the late Jay Conrad Levinson, father of Guerilla Marketing.
Narrow “the universe of those you ask,” he suggests in the book “Guerrilla Marketing in 30 Days.” For instance, instead of asking your weekend golf partner to thumb through his mental database of everyone she knows, ask her who else she plays golf with who may be thinking of buying or selling real estate.
The smaller you make the “universe,” the more likely your customer will be able to come up with a name.
Keeping in touch with the customers you already know and who know you is one of the easier parts of your business. By not periodically reaching out to them, you’re leaving easy money on the table for your competition to grab.
Start sending out a Community Newsletter to your clients each month to remind them of who to turn to for expert guidance when needed.
Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!
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