Why Are Real Estate Agents So Bad At Generating Repeat Business?
Great post. It is a lot less expensive getting business via repeat client, and referral. That's not only true in real estate, but pretty much in all service types of businesses.
The key is to figure out a way to stay in touch, even if it's just a monthly newsletter. Make sure people know you exist, and are there to help them and their firends.
Why are real estate agents so bad at generating repeat/referral business? I read an absolutely fascinating article in RisMedia the other day titled "The Consumer Rentention Conundrum." The key points in this article were that:
- Only 18% of brokerages generate repeat business
- Only 6% of agents with three to five years experience generate repeat business
- Only 17% of agents with six to 17 years experience generate repeat business
- Only 38% of agents with 16+ years experience generate repeat business
I was absolutely flummoxed when I read these statistics. Having been in this business for 22 years and having learned way, way back in business school that repeat and referral business was at least seven times less expensive to attract and maintain than new business, I've always focused much of my "lead generating" activity towards past clients. As a result, my repeat and referral business is consistently two thirds or more of my business. And let's face it, it's much more pleasant to work with people who already know you, like you, and trust you or with pepole they refer to you who are ready to get to know you, like you, and trust you because you were referred by a happy client.
There seems to be a mindset amongst both newer and more experienced agents that lead generation should focus on attracting new business. Clearly, that should be a part of lead generation. But why overlook activities that keep you at top of mind awareness with past clients and why not consider that legitimate "lead generation" deserving of a serious time investment?
Every year I review just how much of my business came from past clients. Interestingly, I've found that when I ask other agents what percentage of their business is repeat and referral business, they don't have a clue!
Focusing on your past clients works. I once heard that each client is worth five more clients to you and those five are each worth at least five more clients and so on and on. The growth is truly exponential and relatively inexpensive. So again I wonder why don't more agents focus on generating more of this type of business? Why is the emphasis on handing out a bunch of business cards each day to strangers instead of taking time to connect and reconnect with past clients? Personally, I don't even like to refer to my clients as "past" clients. That makes it easy to forget about them. To me a client is always a "current" client in a "current" relationship even if they are not buying or selling at the moment. Change your thinking and you change your entire paradigm about generating repeat and referral business. It doesn't happen by accident or because a client was happy with you 10 years ago. It's a strategic process and a daily activity.
There's always lots of talk about repeat business, but statistics show that the reality is far from the perception.
Nina Hollander
Broker, Realtor, CRS, GRI, ABR, SRES, CDPE, SFR, SPS
Carolinas Realty Partners/Keller Williams Realty
Direct: 704-779-0813
Website: www.GreatHomesInCharlotte.com
Blog: www.BestCharlotteHomesForSale.com
Search for Charlotte Area Homes: www.HomesInCharlotteArea.com2007, 2008, 2009, 2010, 2011, 2012 Charlotte Magazine 5-Star Customer Satisfaction Award Winner
Oh by the way, I'm never too busy for any of your referrals!
Comments (2)Subscribe to CommentsComment