Agents: The Real Cost of NOT Staying In Touch
Realty Times frequently shares the benefits of building and maintaining a saleable book of business or sphere-of-influence such as knowing where your next commission is going to come from, developing long-term friendships and relationships, solid referrals you can count on, etc. What we don’t usually talk about is the flip side of that coin. What is it COSTING you when you DON’T stay in touch and follow up with your sphere or farm?
What if ONE prospective seller or buyer fails to call you when they are ready to sell or buy because they ‘forgot’ you were in real estate since you didn’t stay top of mind? Because you didn’t follow up when you said you would? Because you stayed in stealth mode, waiting for the phone to ring? Because you didn’t create a database to manage your lists, so they simply slipped through the lack of system?
We know that on average, top agents get more 66% of their business (or more) from their sphere. (People who know you, like you, trust you, and you’re top of mind with.) We also know that 1 in 12 will deliver a transaction or referral per year on average. So let’s run SIMPLE numbers using our SOI calculator.
If I wanted to make $200,000 per year in real estate and my average commission was $6,000 that would mean I would need AT LEAST 33 transactions in a year (plus whatever your fall-through rate is) to reach that goal. If 66% of that is coming from my sphere — that means I can count on 22 of those transactions coming from the people I am staying in touch with. If 1 in 12 are sending me that business, then I’ll need at least 264 in my sphere to hit the numbers.
The reverse of that is this…22 commissions LOST. That’s $132,000. But it’s even more than that-right? Because let’s face it, if good news travels fast, bad news travels faster-doesn’t it? So, for every broken promise, lack of follow up, or poor customer experience you provide, that can mean a loss of not just a customer, but every referral they might send your way. Add social media in the mix, “don’t use Agent X because they don’t follow through” — and you’ve got a slippery slope that’s tough to recover from.
1. Commission loss per seller or buyer? _____________ (Average commission)
2. Loss of referral? ______________ (Average commission x let’s just say 2 referrals)
3. Loss of re-list and future sale? _____________ (Average commission x average homeowner moves — lists, sells, and buys new — every 9 years)
4. Loss of marketing dollars spent on those sellers and buyers not recaptured? ________________
Lastly, loss of reputation as a turn-to, stand-up, get-the-job-done agent. That’s really too much to calculate, isn’t it? And that’s not YOU anyway! You’re the stand-up agent-right? Besides, staying top-of-mind is an easy, and affordable investment. Remember that SEND-CALL-SEE + NETWORK approach I’ve shared in the past.
Start with how many you need in your sphere by heading over to our Sphere of Influence Calculator.
SEND – let’s take our example from above — if I needed to stay in touch with my sphere of 264 customers every 30 days to stay visible, (and help earn that $132,000) – and I wanted to send a standard sized postcard first class, that would be 60¢ per card or $158.40 per month. Or you could choose jumbo cards, or newsletters, our Dominator, or even handwritten cards — or better still a combination of all of the above. See what your budget allows and start somewhere, but be consistent every 30-45 days.
CALL – you should call your customers every three months. If you break down that 264 number over 12 weeks — that means you just have to call 22 per week to reach everyone. Easy peasy!
SEE – you should see your customers at least two times a year. Many agents host open houses, holiday events, or even neighborhood block parties (with sponsors for each) which gives them a chance to see many customers at once. Take that top 20% of your list — the ones who consistently send you business — and be sure to spend some one on one time with them. Take them to lunch. Drop by a gift. Deliver tickets to the movies for their family. Our Master Marketing Schedule has some terrific ways to creatively connect each month.
NETWORK – In today’s hyper-connected world, networking has to be part of the equation. From social media to joining local groups, to developing a mastermind of like-minded people to share with — networking is a key source of knowledge AND referral business.
Don’t lose any more dollars, branding, or reputation to lack of connectivity. You are your business. The connection you have with each and every one in your sphere will determine whether they stay a client (and a referral source) or whether you take a loss.
Need help? Contact our team at 866.405.3638 today.
Written by Julie Escobar Realty Times Staff for www.RealtyTimes.com Copyright © 2014 Realty Times All Rights Reserved.