Would You Like to Have More Repeat Business?
If your answer isn't a resounding "YES", you're really missing out on marketing gold!
Why Are Repeat Real Estate Customers/Clients Valuable?
Commonly accepted statistics related to customer retention and churn come from sources such as the book "Leading on the Edge of Chaos," by Emmett C. Murphy and Mark A. Murphy. These statistics don't pertain specifically to real estate, but you can certainly see the trends. Here's what you need to know:
- Finding new customers can cost 5 times more than working with past customers.
- If you increase customer retention by 2%, it can have the same impact as cutting costs by 10%.
- You can increase your profits, depending on the industry, by 25-125% if you reduce the number of customers you lose by 5%.
The message here is that you ignore the issue of retaining past real estate customers or clients at your own peril.
What Does It Take to Nurture Repeat Business?
The simple answer to that question is that you have to stay in touch with previous clients and your entire sphere of influence. That way, when someone you know is in the market to buy or sell, they'll think of you first.
1. Why is ongoing contact important? According to the 2008 NAR Profile of Home Buyers and Sellers:
- 18% of repeat buyers use an agent they'd worked with in the past for a new real estate transaction.
- 70% of home buyers (repeat and first time) would use their real estate agent again and recommend the agent to others.
- 26% of home sellers used an agent they'd worked with in the past for a new real estate transaction.
- 65% of sellers would definitely use their agent again and recommend the agent to others.
Here's what those statistics mean to me. First, a pathetically small number of consumers go back to an agent they'd worked with previously. Second, the number of consumers who would use the same agent over and over is high.
Taking those two statistics together, you really have to conclude that most agents are missing a very easy source of new revenue!
2. Why is Ongoing Contact so Difficult? There are probably several reasons. For one thing, it looks like not many agents make a concerted effort to stay in touch with their sphere of influence.
But, I think the biggest challenge is this: the vast majority of people you need to stay in touch with aren't in the process of buying or selling a house.
According to the NAR report, 44% of sellers stayed in the home they are selling 5 years or less. That means that for years at a time, your previous clients aren't all that concerned about existing homes for sale or real estate market statistics in your area, etc.
The biggest challenge in staying in contact with previous clients is finding something interesting to contact them about!
Get more ideas for increasing your repeat real estate business here.
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