Many Realtors worry about how and where to begin their marketing. They sweat over the details of “prospecting” – how to define your niche market, how to recognize and profit from your sphere of influence, post card campaigns, e-mail campaigns, letter campaigns, door knocking, even cold calling in the age of Do Not Call. Dozens of books have been written on the topic and it is all there for those willing to look.
The other side of the coin is how much is enough? Although few ask “When can I stop marketing?” you may have justified that you had done enough because you are satisfied with your current transaction volume. If so, then it is possible that your marketing strategy has a strong prospecting component but slowly just fades away because you've become preoccupied with your current business opportunities. However, all too often the result is that you are paying 95% of your attention to “the live one on the line” and not paying much attention to possibilities that lie farther out, including repeat sales and customer referrals for new business. And, you should be preparing yourself for a day when buyers and sellers are not so easy to find.
The point is that the correct answer to the question is “You never stop marketing”. You must prospect to attract new business; incubate all of your leads from all sources for the 6 to 24 months it may take for them to make the decision to move, insure quality service during the transaction to build satisfaction which leads to loyalty, and then incubate them again after the sale, with the same level of commitment as before the sale, to build a future recurring revenue stream. Even after your retirement you will want to maintain your relationships if you wisely planned ahead and sold your book of business on a referral basis to a new up-and-coming agent.
This is what I call “Relentless Marketing”. I am always amazed at the willingness of agents to perpetually prospect to replace customers, but not to put much effort in retaining customers. In spite of the well accepted knowledge that it is always less expensive, less time consuming, and more profitable to keep a customer than to replace a customer. Is this because we learned to prospect so well at the beginning of our careers that we're addicted and can’t give it up? Based upon my observations I am sure that it is not because we love cold calling or spending Sundays sitting at open houses. And yet, for most agents the ratio of effort invested in prospecting far outweighs that invested in all other marketing areas.
Most, that is, except for the small percentage of our industry that are recognized as top performers. These agents wisely invest a greater deal of their time and marketing dollars in promoting the Customer For Life concept. They have learned that every customer represents not only a resale possibility, but many times that in commissions to be earned from referrals to friends and family. Most have repeat customer rates of 65%, and some as high as 85%.
What is your retention rate? What would you think if I told you that the industry average is about one in eight? That means that around 50% of the average agent’s potential commissions are going to be lost to a competitor because the agent didn't even show up. How much business are you forfeiting to your competition?
