Do the Math On Relationship Marketing

By
Services for Real Estate Pros with Cobel Communications

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.

 

Comments (28)

Bridget Cella
Re/Max Connection - Sewell, NJ
e-Pro, Realtor

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

Jul 14, 2009 09:54 AM
TIM MONCRIEF
Tim Monciref - Austin, TX
Over 2,000 homes sold…..

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.

Jul 14, 2009 10:08 AM
Ray Cobel
Cobel Communications - Thousand Oaks, CA
Let's Get Real About Real Estate Marketing

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.

Jul 14, 2009 10:21 AM
Lisa Udy
Platinum Real Estate Group - Logan, UT
Logan Utah Realtor

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

Jul 14, 2009 10:27 AM
Ray Cobel
Cobel Communications - Thousand Oaks, CA
Let's Get Real About Real Estate Marketing

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.

Jul 14, 2009 11:00 AM
Anna Banana Kruchten CRS, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

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.

Jul 14, 2009 11:06 AM
Anonymous
Dan Pena

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.

Jul 14, 2009 11:42 AM
#15
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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.

Jul 14, 2009 12:29 PM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

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.

Jul 14, 2009 12:52 PM
Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

POWERFUL!!!!   The numbers don't lie

Jul 14, 2009 02:16 PM
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

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.

Jul 14, 2009 02:48 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

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. 

Jul 14, 2009 03:25 PM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

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

Jul 14, 2009 03:29 PM
Roland Woodworth
eXp Realty - Clarksville, TN
eXp Realty

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

Jul 14, 2009 04:13 PM
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,GRI,SRES, Brea,CA, Orange Co

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.

Jul 14, 2009 04:18 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

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 14, 2009 04:22 PM
Nicholas Goraczkowski
Aurora, CO
Your Mortgage Resource - (720) 83-RATES

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.

Jul 15, 2009 05:24 AM
Ashley Sharum
972.978.3109 - Dallas, TX
Ebby Halliday Realtors

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

Jul 15, 2009 10:04 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

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!

Aug 19, 2009 02:20 AM
David Pylyp
RE/MAX Realty Specialists Inc., - Toronto, ON

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. 

Apr 25, 2010 03:35 AM