We all know that we should stay in touch with our past clients. We all know that the cost to generate a new lead is much higher than having an existing client do business with you again. But how much better is database marketing versus cold lead generation?
I wanted to find out. And I did.
Getting Outside Our Industry
Too often we look within the real estate and mortgage industry for answers. Limiting our focus means we may miss out on information that can give you an edge in our competitive market.
When I researched information about new versus repeat/referral business I did not limit myself to just real estate. By doing so you can get a unique perspective and some new ideas you may not have considered.
Check out this stat:
Bain & Company found that a 5% increase in customer loyalty produced more than a 25% to 95% increase in profit!
Let’s look at why this is…
Repeat Clients Spend More
Do you generally find that clients who work with you again purchase a higher priced home than their first? Yes, of course. And for a few reasons. First, housing appreciation will naturally increase their purchase price. But their situation is likely improving as well. Incomes are going up, home equity is increasing, assets are being accumulated. All of which allows them to buy a more expensive home.
The stat: 67% more!
Repeat Client Willing to Pay More
Repeat Clients Repeat Again
But, do you realize that once they have done business with you for a second time they are more likely to do business with you for a third, fourth, fifth and so on?
Once they worked with you and had a good experience they chose to work with you again. Assuming you did a similar or better job as you did when you first assisted them it solidified their decision even further. Why would they look for another agent when they already know you and trust you. The fear of loss outweighs any potential gain they may realize from looking elsewhere and choosing another professional to work with.
Repeat Clients Refer
For all the same reasons a repeat client is likely to continue to business with you again in the future, repeat clients are also more likely to refer.
In fact, they are 50% more likely to refer you than non-repeat clients.
Repeat Clients Cost Less
According to National Law Review it costs five to ten times more to acquire a new client than retaining a current client.
What’s more interesting is that if you do acquire a new client it costs 16 times more to bring that new client to the spending level of the current client.
Repeat Clients Convert Better
According to NAR, 89% would recommend or do business with their real estate agent.
Yet, the conversion rate of new customers is just 13%.
It Adds Up
Repeat clients spend 67% more.
Repeat clients are willing to pay 5% more.
Repeat clients are more likely to work with you again.
Repeat clients are 50% more likely to refer you to others.
Repeat clients cost just 10-20% of the cost to acquire a new client.
Repeat clients convert at a much higher level than new clients.
How Do You Maximize Your Repeat & Referral Business?
Here are a few pointers:
- Provide an amazing experience during the transaction
- Make it easy to do business with you
- Simply apologize for any negative experience
- Provide proof of great customer service
- Build a 5-star reputation
- Hire great people
- Personalized touch points
- Stay in touch consistently
- Always add value
Don’t Let Fear Get in Your Way
What do humans fear more than anything else?
That’s why kids are afraid of the dark. But as adults we aren’t much different.
We don’t pick up the phone out of fear of what people might say or think.
We don’t knock on that door our of fear of how people will respond.
We don’t send an email because we don’t know what to say.
We don’t send something in the mail because we don’t know how often to send something.
We don’t reach out because we don’t know the value we are offering.
What if you could eliminate every one of these fears? You can…
We’ve got the step-by-step process to turn your database into golden opportunities. In implementing these strategies we have personally increased our repeat & referral business by over 400% in just 24 months.
Take a high-touch approach with your database using high-tech tools!
Our Database Gold Webinar covers:
- incredible value of your database
- maximizing results through the 51/1 rule
- systematic method of creating raving fans
- countless opportunities you have to stay in touch
- cultivating repeat and referral business
- time-tested 4X database marketing plan
- suggested technology tools to make it easy