Would you be surprised to learn that only 12 percent of buyers and sellers used an agent they had used before to buy or sell a home? Peter Knight, managing director of the U.K.’s Property Academy recently presented some interesting strategies, at the National Association of Realtors’ convention in San Francisco, for helping you personally increase that percentage. He encouraged listeners to practice a “people first” approach to increase their referral and repeat business.
The typical real estate sales funnel begins with leads that filter down into appointments. Appointments filter into signed business, which ultimately become closed deals. Knight believes that old sales funnel is “completely outdated” since it fails to address what happens to those clients once their transaction closes.
Each of your past clients knows approximately 250 people. If you have 100 past clients, you could potentially have upwards of 25,000 people from which to draw as potential future clients. Knight recommended that agents prospect both ends of the funnel. You should continue to generate new business through prospecting, but make prospecting your past client list your highest priority.
A 2013 Profile of Home Buyers and Sellers confirms that the industry is continuing to fall short in the area of retaining past clients: “Forty-two percent of buyers found their agent through a referral from a friend or family member, and 12 percent used an agent they had used before to buy or sell a home.”
Almost 59 percent of the industry’s past sellers ultimately list their home with a different agent even though they would have hired the agent who represented them on their previous sale. While there can be numerous explanations as to why this is the case, the most likely one is that the agent failed to stay in regular contact with the client.
Knight made the following recommendations about how you can avoid having this happen to you in your business.
1. Use your database to stay in touch
Focus on both ends of your sales funnel: first by prospecting for new business, as well as focusing on client retention and generating referrals from them.
2. Personally contact your clients at least once every 90 days
You can do this via email or social media, but Knight argues that the two best ways to do this are either through video or by calling them on the phone. In fact, he recommends that you spend 45 minutes each day calling your past clients.
3. Supplement calls with video
Video is now the primary way that most people prefer to get information. In fact, video emails have much higher open and response rates, especially as compared to direct mail pieces. To illustrate this point, The Direct Marketing Association reports that 82 percent of the direct marketing mail pieces go into the recycle bin or trash unopened.
Video allows your viewers to experience what type of person you are, how professional and knowledgeable you sound, and help them determine whether they would feel comfortable doing business with you.
What is your experience in working with past clients? We’d like to hear from you!
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