Do the Math On Relationship Marketing

Are you aware that there is one kind of marketing that outproduces every other kind, by far? And do you also realize that with today's technologies you can implement much larger camapaigns of this kind of marketing at much lower cost?

Relationship Marketing Works Best

Year after year the NAR does extensive surveys of actual home buyers and sellers. And year after year, the results are the same. When asked how people found their real estate agents they say overwhelmingly that they found them through relationships. The graphic below breaks out the detail.

Relationship Marketing vs Advertising

Ironically, the most marketing money is always spent on media that produces the smallest results.

How Much More Could You Be Making Through Relationship Marketing?

To help you answer that question I've created a free, online calculator that will help you do the math. Go ahead and run your numbers. Then come back and share your comments here. I'll bet most of you are going to be very surprised.

Posted by Ray Cobel on 07/14/2009 04:11 PM

Comments (28)

Relationship Marketing in the Sales Strategies / Tactics Channel

relationship marketing, planning

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28 Comments on Do the Math On Relationship Marketing

JUL

2009

You are right on Ray, it's still a people business and personal contacts produce contracts !!!

Ray...

It's always been my experience that the best customers a sales person can have are ones they have relationships with. Humans want to do biz with humans. Adds don't sell houses. Houses sell themselves and our job is to build and nurture the relationships that keep us employed :)

TLW...ROAR!

Great post and I highly agree with you. This is one thing that I have learned at Keller Williams and it has really turned me around on how I do my marketing. I have bookmarked your post and want to come back and run the numbers. Thanks.

Right on, Ray! It doesn't matter how much you pour into a print ad, it doesn't do the same as nurturing relationsihps and building your network. Get out and meet as many people as you can!

Thanks for the great statistical summary!

That tells the story. Its a more pleasant way to do business anyway.

Ray,

Fantastic piece! The facts regarding where to put our marketing efforts and dollars are overwhelming and undeniable. I'm going to print and keep your article above my desk just in case I ever think about straying off course regarding my marketing direction.

Keep the great info coming!

Ray great blog and interesting bit of information. I have always been bad about staying in contact it's never that I didnt want to just seems like not enough hours in a day

Getting them all in one place is the biggest battle (i think)! Thanks for the info.

The numbers you posted are pretty dead on to what our numbers have been over the last 6 years. It would be nice to get incredible leads that turned into closings; but, the reality for US is that the internet is not our game for efficiency. Some it may; but we stick to what works. This is has been the case in my 28 years and have seen no change over the last 10-15 years with the internet. That did surprise me.....alot.

Michael, TLW, Linda, Marcy, Chuck & Gene thanks for your validation.

Heather, that's where automation comes in.

Bridget, thanks for the nice segway to my next post: Optimize Your Database for Relationship Marketing

Tim, you must be doing a pretty good job of maintaining your relationships. You're right. The Internet doesn't change the elements of the relationship process, but it can make it easier to engage a whole lot more people in it, for a whole lot less.

Hey Ray,

The internet is a great way to add those couple extra closed deals, but you should focus on the face to face contact, referrals, friends, and past clients more. It's always been this way, and I don't think it's going anywhere else in the near future.

-Lisa

From day 1 I have had almost 100% business by referral. It's the only way to go.

Lisa, I agree with you. Never write if you can call. Never call if you can visit. The most intimate form of communication is where the strongest relationship building occurs.

The difficulty comes after you've done the math. It turns out that most of you need to maintain relationships with several hundreds of people in order to reach your financial goals. One face-to-face meeting per day is 365 people per year; and that means you go a whole year between meetings.

In the mean time people decide to buy or sell. They have friends, relatives and co-workers who decided to buy or sell. If you don't keep in frequent, regular touch, you are going to miss out on many of those opportunities.

Given how cheap and easy technology is making relationship maintenance support, it's foolish not to take advantage of it.

Spot on Ray - is and always been my best source of constant referalls. Raving Fans are the best in the book. We also have been quite a few off the net which is great for my agents - and then we keep them in our 'family' of clients.

Ray, Great article, I am finding that out daily, I have been a loan offcier in the same area for 20+ years and have recently tried other ways of marketing such as a new internet site and such, nothing is better than word of mouth and past client referrals. Thanks again for the rminder and the information.

Ray - "Referred by a friend" - your marketing could make you a "friend", too... i.e. they "know" you without having met you, it's almost the same thing.

At least for me the internet percentage is much higher. But I guess it may be right because so many agents don't work the internet.

POWERFUL!!!! The numbers don't lie

I'm with Russ - as a newer agent - those relationships haven't been built up as yet. Referrals are one of my sources - now that I've been around for four years. But the INTERNET is where more than 50% of my sales comes from. I think a lot of agents are in denial about this. So many DON'T USE the internet to its capacity that the numbers are skewed.

But I'm fine with that - let them put their heads in the sand....more business for me.

And people wonder why I say that I only work with my friends. Of course, the people that find me other ways generally become my friends.

Ray, I have been quoting these stats for years about the importance of knowing people but I like your presentation.

Real Estate is a relationship business.. Referrals are the best way to find new business if you keep in touch with past clients..

Hi Ray,

Great info and I'm in total agreement. My data base is my little gold mine, my goal is to create raving fans. I also understand it costs far less to keep a client than to find a new one.

Your calculator is a real eye opener for me. There is a lot of potential in all of this. I do a fair amount of it though not enough.

JUL

2009

That's why it is so important to stay connected with your clients, friends and family. If you do a good job and follow up you will be the first one they think of.

Wow, Ray!

I love the calculator you've set up and it's really let me see things in a different perspective. I know I'd much rather call someone I know in an area that I'm pursuing than a stranger who claims to be a professional. Makes sense!

Thanks again for the post!

Ashley Myers

AUG

2009

Ray: Thank you. I think the most successful people in our business understand this and do everything they can to build and maintain relationships. My personal opinion is if we're not interested in doing this, we're in the wrong business! Thanks again!

APR

2010

Here are a few more for the survey says category;

Here is some interesting information:
- 62% of home sellers only interviewed one agent before listing their home
- 19% of home sellers talked to 3 agents before they selected one
- 22% were more interested in determining the list price that would make their home competitive than any other service a listing agent would or could provide
- 1% thought professional designations were important when picking their agent. The other 99% didn't see the value to be of consequence.

We really need to reach out to our clients in a better fashion.

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Ray Cobel

Thousand Oaks, CA

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