Want more income? Stop client attrition
A simple strategy for agents who want to increase their income, is to decrease their rate of client attrition, according to Bernice L Ross, who is an internationally renowned real estate trainer and owner of www.realestatecoach.com.
“While most business plans focus on creating new customers and working with referrals, virtually no one addresses how to reduce one of the most expensive costs in the real estate business – the attrition of past customers and clients,” she says.
“This is so even though one of the major characteristics that differentiates top producers from less productive agents, is the fact that their past clients – the buyers and sellers that they have previously worked with – and their referral sources, keep sending them new business.”
Everyone knows by now that the cost of continually finding new clients is substantially higher than working with people who have already had a positive experience with your services, but few understand just how high the cost of attrition is. Ross explains: “Losing just one out of every five potential referral sources each year over five years will require you to replace 100% of your existing clients in that time, just to maintain your current rate of business.
“On the other hand, if you cut your attrition rate, that’s the same as adding new clients that you would have to generate from your prospecting activities – and much easier.”
Some ideas for reducing attrition in your business include the following:
- Stay in touch. Call all of your past customers and clients at least four times a year and try to see them in person at least twice a year. Send them useful information, such as a regular update of what property has sold in their area, and for how much.
- Don’t write off past clients just because they move away. Their previous friends and neighbours in your area could still be a source of business referrals, and if your real estate company has a national referral system, you might even earn a fee by helping someone who lives across the country.
- Check your service. If there is anyone who has stopped doing business with you or stopped sending you referrals, try to find out why. Being honest with yourself and taking specific steps to remedy any problems mentioned by past clients can literally make you tens of thousands of rands.
- Don’t forget to say thanks. Make sure anyone who makes a referral to you receives a thank you note, plus a small token of your appreciation – regardless of whether or not the referral ends up doing business with you. Never be afraid to let your contacts know how important a role they play in your success. Helping someone makes people feel good, and they will keep doing it.