GREATEST RISK TODAY - LOSS OF EXISTING CUSTOMERS

We are finding the greatest risk in today’s business is the loss of existing customers. And we all have known the best opportunity for growing sales is through your existing customers... would you agree?

You must know who are your core customers and find out which satisfied customers can become loyal customers. There is a big difference between satisfied and loyal.

Nothing beats meeting a loyal customer for breakfast, lunch or a cup of coffee. Second is picking up the phone and talking for a few minutes with your grade A customers. Third and just as important is a consistent way to create value added benefits and consulting services for customers to differentiate you from those trying to erode your customer base.

But first you must know your customers well enough to know which are "core loyal customers" and which could be "cultivated" to become core loyal customers. How do you accomplish that? "DEEPER" KNOWLEDGE OF YOUR CUSTOMERS BEYOND THE "OUTER SHELL"

Your customers do not always want to hear about real estate! In fact most of the time you they do not have any interest in real estate. You must trigger their work-life interests, home-life interests and lifestyle interests.

There are companies that offer services and or programs to help you accomplish just that. Seek them out and find companies that specialize in customer relationships.


Arnie Goldberg, co-founder and Vice President with Loyalty Builder,LLC. Arnie says, "Loyalty Builder is a relationship management and marketing firm that I believe is dramatically different from the standard industry focused firm. We are driven to generate relationships to grow your real estate business."

REALTOR CUSTOMER BASE MARKETING

Realtor Customer Base Marketing
Important information
A National Association of Realtors Technology Survey in 2007 found that REFERRALS, REPEAT BUSINESS and INTERNET were the main sources of leads.
And I have found in realtor surveys that the majority of realtors are still spending more of their marketing budget on soliciting new clients than on their customer base. Why?
The traditional brokerage office is still hiring as many agents as possible, hoping for as many sales as possible, and using old techniques like open houses, floor duty, and email. I include email because email is now a marketing tool that is loosing it’s value.
New technology and a new approach
The advent of the social media boom, the massive availability of information on the Internet, the younger generation of multi-tasking and fast paced living have dictated a major shift in the way realtors approach their business.
The information below reviews the need to consider a shift from traditional marketing budgets to a new approach. The low cost of advertising and publicity and information gathering allows realtors to allocate more to customer base marketing than prospect marketing.

Marketing Costs Per Closing
Assumptions:
• The realtor tracks their commissions (If they don’t I bet the IRS does)
• The realtor tracks marketing costs
• The realtor tracks revenue from repeat and referral business closings (Although many do not, we suggest they begin immediately as it takes more and more knowledge of their business to survive and/or grow today’s climate.)
Realtor tracked - customer value
• Original commission earned on purchase of a home $ 3,200
• Referral to a neighbor for a listing which sold $ 3,800
• Listing customer’s home/repurchase of a new home $ 8,200
• Referral to a home builder (2 sales in 2 years) $ 5,500
• Listing of older parents moving to assisted living $ 3,100
• Introduction to HR person where customer works
(value undetermined as of yet)
Total $ 23,800

Economics

Closings per year (assuming) 30
Commissions $90,000
Total Marketing Costs $6,000
% of Referrals 70% or $63,000
Marketing cost on Customer Base 30% = $ 1800.00 (typical)
Marketing on Prospecting 70% $ 4,200.00

Marketing Costs New Prospect Closings $4,200.00 or $466.66 per closing
Marketing Costs Referral or Repeat Business Closings $1,800.00 or $85.72 per closing


Re-alignment of marketing dollars

If your referral and repeat business is 70% of your income, why spend only 30% of your total marketing investment on your customer base.
We strongly suggest you reverse the marketing investment and allocate 70% of total budget dollars toward your customer base.

Customer Service Retention Trends in Social Media

By Arnie Goldberg

Faculty, John Sperling School of Business, University of Phoenix Website Article

Keeping a client year after year requires attaining customer loyalty which involves fitting together several pieces of a relationship puzzle. There is a science to understanding client loyalty. This includes recognizing the value of loyal clients, and creating and maintaining those loyal clients.

Research surveys have held the position that customers who were satisfied were more likely to remain loyal to a company (Klein & Einstein, 2003). When organizations delivered a customer experience that met their needs, customers returned to that organization more frequently than to its competition. However, current thought reveals only the top echelon of satisfied customers remained loyal to an organization.

I have found while teaching a course on customer retention, the best starting point is to have the students answer a few questions. This process helps a person realize the many factors that affect customer loyalty, and how these factors play on purchase decisions in his or her life. The survey thought process also shows how we are all different and have different motivations, which is important in developing customer loyalty strategies and programs.

Introducing Social Media

Today, there is a swing back to gaining knowledge of the customer and his or her behavior patterns as a key element in designing loyalty marketing plans and strategies. With the viral expansion of social media, and the younger consumer demographic’s use of social media as a daily communication tool, this phenomenon becomes an opportunity for businesses to maintain contact and provide current information to existing customers.

Traditional means of advertising and flows of providing information to existing customers are losing their effectiveness. Advertisers are not seeing positive results from newspapers and print media and have reduced expenditures in those media outlets. Social media provides free platforms and the advent of “permission-based” communication, with a huge word-of-mouth, viral scope.

People are now in a hurry—not only the younger generation but their parents too. The fastest growing segment of social media platforms is said to be those from ages 40 to 55 (Corbett, 2009). They read news on the Internet in brief “tidbits” of information, and they are multi-tasking with several software applications open at the same time. Often they are switching in the middle of a news article when a message arrives and often they never return to the article.

While surveying several social media users, I found they build trust within their social media friends and rely heavily on these friends for purchasing information and company reputation. Positive flows of purchase satisfaction can provide a major component of customer loyalty programs by company marketing departments.

Three Factors that Influence Customer Loyalty

1. Customer satisfaction–involves prior expectations of quality and customer service, and the comparison of those expectations to actual performance received.
2. Perceived alternatives–have to do with the difficulty and/or the cost of moving to a new vendor or service provider.
3. Business relationship–relates to how strong the business relationship is perceived.

Trends in the growth of social media are providing platforms to aid in all three of these customer loyalty influences. Businesses must begin and continue to use this important avenue of communication to increase customer service retention.

References

Corbett, P. 2009. 2009 Facebook Demographics and Stistics Report. Retrieved May 13, 2009 from Istrategylabs.com

Klein, M. & Einstein, R., 2003. The Myth of Customer Satisfaction. Retrieved May 13, 2009 from Strategy + Business; Booz & Company.