Ten Steps to Real Estate Success (Step 6)
Customer followup is a skill. Master that skill, and you will be rich! Don’t, and you won’t. In fact, you’ll likely not make it in the real estate business without this skill. I’ll even go one further: In my opinion, there are two critical hurdles to making phenomenal money in this business. One, generating an unending supply of new leads. Two, learning the art of customer follow-up.
We already discussed lead generation in an earlier segment, and how any agent can make as many leads as he desires for a cost of about $3-5 per lead by using the right technology. For purposes of this segment, I’ll assume you’ve already solved the “no customer” problem. That brings us to the second critical hurdle — learning the art of customer follow-up.
In my own real estate brokerage, I’ve seen one agent close as many as one deal for every sixteen leads, while another received over a thousand leads and never produced a single closed transaction. They both used the same technology to make their leads. They both worked in the same company environment. Both started as new agents and took the same training. Both were eager to grow their practices. Why then, this big disparity in their results?
Here’s why: One learned the art of customer follow-up and the other never did. Both started about the same time. One is now out of the business while the other one will close 13 transactions this month. What a shame. So what’s the secret sauce? What’s the magic formula?
It’s not personality. It’s not education or training. It’s not even the company you choose to work with. It’s one skill: learning the art of customer follow-up. And it’s easier than you think. Remember, the buyer wants to buy. The seller wants to sell. The inspector wants to inspect. The lender wants to lend. The closing attorney wants to close. This is not rocket science. We need to learn how to keep from screwing it up and we will get paid!
I realize that’s a strong statement, but it’s true. So let’s talk about not screwing it up. First let’s think about the last installment when we talked about understanding the real estate buying cycle. If you remember, there are three phases: information gathering, search, and escrow. Most agents mess it up in phase one: the information gathering phase. A few may mess it up during the search phase, and lose the business to another agent.
I’m going to give you the secret to successful follow-up — to making that connection — and to ultimately win that client. It’s a gift! G-I-F-T.
- Goal – Remember your goal.
- Identify – Identify where your customer is in the buying cycle.
- Frequency – Determine the proper frequency of contact.
- Touch – Use the appropriate level of touch.
Now let’s look at each of these keys in detail. When you understand how to approach your customer, you will win their business. Sure, at first it will take some practice, but you will be amazed at how quickly it will become natural. And when that happens, there will be no stopping you!
Goal. Remember your goal. What is your goal? I’ll tell you. Your goal is to be first and make the customer like you. That’s all. Why? If you recall, over two-thirds of our customers only talk to one agent. If we want to have a huge advantage over our competitors, we need to be first. If we’re first, the odds of our doing the deal are 2 to 1. Period. The only way to change that ratio is to mess it up! So identify the customer before your competitor, and then make the customer like you so they won’t look for another agent. Why? Because customers universally want to do business with someone they like.
So that’s the goal. It’s not to get them to come to your office. It’s not to get them to sign a buyer’s agency contract. It’s not to get them pre-approved. It’s not to show them a house. It’s not to write a contract and get it accepted. All those things, while important, will take care of themselves if you simply get there first and make them like you. It really doesn’t get any easier.
Identify. Identify where your customer is in the buying cycle. How? Well, there are two ways that I can think of. Either let them tell you, or figure it out. If you used our LCM Gateway technology to capture the lead, the customer will tell you. If they are searching for an agent, they have told you they are in Phase Two, since they won’t be ready to approach an agent until then. But let’s assume for a minute that you don’t have our LCM Gateway. Here is another way to figure out where a customer is in the buying cycle.
Think about a time line. At the right end of the line is the closing (the part we all like best). That marks the end of the Escrow Phase. Escrow generally lasts about 3-4 weeks. Now imagine the beginning of Escrow and the end of Phase Two or the Search Phase. For practical purposes, let’s imagine that being the zero point on the line.
Now go to the left about -2 weeks and -10 weeks and imagine those points on the time line. Now in your mind, draw vertical lines through those points, at -2 weeks and -10 weeks. The -2 point is the beginning of Phase Two. The -10 point is the average search time. Now imagine a bell curve superimposed on the time line. The highest point on the bell curve should be at the -10 week line.
Let’s figure out where all your leads are on the time line. Statistically, about 12% of all your customers will have advanced along the time line to the “contract -2 weeks” point. Remember, that’s where Phase Two (or the Search Phase) starts. Roughly 12% of your leads will be in Phase Two. At the top of the bell, or at the -10 weeks line, you will have 50%. In other words, about half of your leads will be more than 10 weeks out and about half will be less than ten weeks out.
Now, while we’re at it, let’s look at some other statistics. About 2/3 of all your leads (66%) will be within 90 days of writing a contract. A full 85% will be within 120 days and 95.2% will be within 5 months or 150 days. Statistically, 98.9% (almost all of them) will be within six months or 180 days. I realize that many people teach that Internet customers are 1-2 years out, but the numbers just don’t bear that out. The probability of a customer being more than six months out is roughly 1%.
Now that I’ve given you a visual picture of the time line and the bell curve, I want you to use that as a “statistical” verification process to help as you attempt to discern where your lead is in the buying cycle. Assume that roughly 9 out of 10 will be in Phase One when you first talk to them. Next, assume an average of a couple of months (or 8 weeks) in Phase Two before they are ready to start looking at houses. Relax. Be their friend. Help them.
Frequency. Determine the proper frequency of contact. Here is the rule of thumb you should use: Phase One customers should be touched no more than twice a week. Once by phone and once by email. If you touch them more frequently, you’ll chase them away. After they move to Phase Two, you should touch them every day, again, alternating email and phone as a rule of thumb. If you fail to pick up the pace, you will likely lose the customer to a more aggressive agent. Remember, during Phase Two, they are ready to work with an agent and start seeing houses. So to recap, Phase One, twice a week. Phase Two, every day.
Touch. Use the appropriate level of touch. Here’s what I mean: During Phase One, while the customer is doing their research and gathering information, you should approach them as if you were simply a customer service rep. In fact, I teach our agents to tell the customer that they are doing a “customer service follow-up call” on the first contact. If you come on as Super-Agent, you will chase the customer away because they are not ready to work with an agent yet. They’re still building their dream and doing their research. They don’t want an agent shaping their dream or pushing them into a home.
Once they are in Phase Two, they are looking for a Super-Agent, so be that agent. Stay in touch. Be ready to go on showings. If you’re not, they will go looking without you, and call the listing agent from the sign in front of the house they like, and that agent will double end a transaction when you’ve been working with them for weeks. In Phase Two, it’s okay to be direct and suggest looking at houses.
Here is where most agents mess up: They will either come on too strongly during Phase One or they will fail to up-shift along with the customer as they move into Phase Two. And when they do, they invariably lose the customer to a more aggressive agent (think Re/Max) while they are still asleep in the customer service mode. Don’t let that happen. But remember, if you start assuming that more than 10% of your leads are in the Search Phase (Phase Two), you are probably getting too aggressive.
OK. Let’s put it all together now. When you get a new lead, remember the G-I-F-T. Remember your Goal. Identify where your customer is in the buying cycle. Determine the proper Frequency of contact. Finally, always use the appropriate level of touch. If you set out to do these four things, you’ll do well. You’ll have more business than you can handle.
In our next segment we’ll discuss getting and staying organized in all your work so that every day you’ll know exactly what activities to do to meet your goals. We’ll also talk about the use of technology tools to leverage your time, so you won’t want to miss it. Until then, work on your follow-up skills. They’re probably the most important skills you can master as an agent today.
- Ten Steps to Real Estate Success (Introduction)
- Ten Steps to Real Estate Success (Step 1)
- Ten Steps to Real Estate Success (Step 2)
- Ten Steps to Real Estate Success (Step 5)
- Ten Steps to Real Estate Success (Step 4)
- Ten Steps to Real Estate Success (Step 3)
- Ten Steps to Real Estate Success (Step 8)
- Ten Steps to Real Estate Success (Step 6)
- Ten Steps to Real Estate Success (Step 9)
- Ten Steps to Real Estate Success (Step 10)
- Ten Steps to Real Estate Success (Step 7)