There’s a famous, true story about a farmer who desperately wanted to get rich.
He sold his farm in Africa and went abroad in search of gold. After many years with little success, he returned to his home country, only to find his old farm had become the largest diamond mine in the world.
Too busy looking elsewhere for riches, he had failed to search for the acres of diamonds that were already in his own backyard.
Similarly, most real estate professionals spend thousands on marketing aimed at unearthing new listings from new clients, but neglect to stay in touch with their existing database. Sadly, nurturing relationships by maintaining regular contact with past clients, appraisals, friends, family and acquaintances – people who already know, like and trust you, and would do business with you again in a heartbeat – is often reduced to a once a year Christmas card.
Did you know?
Research shows it costs at least 7x more to find a new client than it does to do repeat business with someone you already know?
Let’s do the math…
Around 1 in every 16 New Zealand homes is sold every year. If you have a database of 400 homeowners, statistically there are 25 transactions occurring every year, right there in your database.
How many potential real estate listings in your database in the next 12 months?
No. homeowners in your database = x
x divided by 16 = no. listings in your database in the next 12 months
Are you making all those sales? Half of them?
Or are you losing some to your competitors?
Interestingly, here are some more thought-provoking facts…
The #1 Reason Your Clients Switch to a Competitor
Market research shows that the #1 reason a company’s clients switch to a competitor is not because they are dissatisfied or receive bad service. Surprisingly, it’s simply because they feel ignored, taken for granted, uncared for or neglected.
The #1 reason clients switch is not dissatisfaction—it’s neglect!
On their own, outstanding customer service and exceptional negotiation skills are not enough to guarantee repeat sales and referrals. What happens after the transaction is equally important.
Unlike Elephants, People Forget
Most people can only maintain acquaintance with and remember the names of around 150 people. If you fall out of regular contact with your database, they’ll forget your name.
If your clients can’t quickly recall your name, they can’t refer you on the spur of the moment during a casual conversation and they certainly won’t be able to Google your contact details.
Chances are, what could have been your listing will go to your competitor.
How To “Mine” Your Diamond Listings From Your Database
1. Stay Relevant With a “Not Only About Real Estate” Newsletter
Top performing real estate professionals stay in touch with their database every month in a way that adds value to the homeowner and builds and strengthens the relationship. (There’s nothing worse than constantly being asked, “Are you thinking of selling? Are you thinking of selling?”)
The best way I know how to do this is with an interesting, informative and light-hearted monthly newsletter that appeals to homeowners, whether or not that person is interested in buying or selling.
“…my single biggest recommendation is the use of a monthly customer newsletter… Nothing, and I mean nothing, maintains your fence better.”—Dan Kennedy*
*Dan Kennedy is a marketing guru and author No B.S. Sales Success. “Fence” refers to the method used to keep your clients “in” and your competitors “out”.
To be as effective as possible and achieve maximum readership, your newsletter needs to achieve two goals:
a) Position Yourself Above Competitors as The Local Area Expert
To pre-educate vendors and demonstrate that you are knowledgeable and therefore the local real estate expert (not just a fly-by-night, part-timer making money on the side), include helpful articles with topics such as:
- Selling Secrets to Achieve the Best Price
- Why You Need to Use Professional Photography
- How to Select An Agent
b) Make You Stand Out From Competitors as a Fun & Friendly “Real Person”
If you bump into past clients in the supermarket, do you immediately launch into a conversation about how the market in your local area is booming and ask, “Are you thinking of selling? Would you like a free appraisal?”
Of course not! If you are one of “those” salespeople, your client will see you coming and busy themselves reading the Weetbix box!
Face-to-face you’re a real person. You talk about the family, the dog, the rugby and the weather. Likewise, your newsletter also needs to have a relaxed, friendly tone with articles about current events, inspiring stories, local events, jokes, puzzles and competitions – things that add value to the 90-95% of people who aren’t interested in buying or selling right now.
Ideally you want your clients to happily receive and even look forward to your newsletter – just like they look forward to their Sunday paper or favourite magazine.
We have a client who regularly has locals pop into her centre-of-town office asking when the latest newsletter will be ready. Guess who is their top-of-mind, go-to real estate agent?
2. Touch Base with an Added Value Phone Call
When using a “not all about real estate newsletter” it makes it easy to phone your database 3-4 times a year with a script such as:
Just calling to check you’ve received my newsletter…?
How have you enjoyed it?
This makes for an easy, natural conversation starter followed by a smooth segway to the exploratory question:
Has it raised any real estate questions for you?
This is a much friendlier, more natural and low key approach to what could be considered a hard-sell, annoying questions, “Are you thinking of selling?”
This approach sits well with real estate agents to whom building strong, long-term relationships with clients is important.
3. Use the Power of Reciprocation
Have you ever wandered into the supermarket, been offered a taste test of a tempting new, product being baked right there in front of you, enjoyed the treat, then felt obliged to put a whole packet in your trolley? That company has invoked a well-known marketing technique called “using the power of reciprocation”.
Although no obligation is required, human nature is to reciprocate acts of kindness; “If you scratch my back, I’ll scratch yours.”
Use this technique to add value to people on your database – regular prize draws, competitions, small gifts, special deals from a local business, sponsorship for local organisations and community events. Be creative.
How Long Since You’ve Been in Touch with Your Database?
What will you do this month, and every month, to nurture relationships with past clients, appraisals, friends and family so you’re the first person they think of when it’s time to buy, sell or refer?
Now knowing it costs 7x more to find a listing from a new contact, than to make a repeat sale or get a referral from an existing contact, how much of your annual prospecting budget will you focus on “mining” listings from your database.
To “mine the diamonds” (listings) already in your database, keep in touch monthly in a way that adds value to everyone, whether or not they are thinking of buying or selling. Position yourself above your competitors as the fun, friendly and professional Local Area Expert. The local “go-to” agent.
- Dominate your market,
- Create a continuous flow of new listings,
- Take your income to $240K and beyond.