Agent Ratings and Social Capital

When I first started selling real estate in the 1980s, the best advertising that money could buy was a full-page ad in the local newspaper. Three decades later, the best advertising for a brokerage or individual agent can't be bought with money: a five-star rating on one of the growing number of agent-rating platforms or websites.

Some brokerages such as Redfin have proactively integrated agent-rating systems into their websites. Others partner with companies such as RealSatisfied to collect and publish verified client testimonials. This is part of a larger trend: consumers' increasing desire to validate their purchases and decisions through social proof.

The past decade has seen massive growth in Internet commerce and the simultaneous rise of social media. This has resulted in consumer transparency like we've never before seen. Customers want to offer advice about products and vent about issues in order to help others make the "right" decision. By providing social proof, consumers are also validating their personal feeling about a purchase.

Unlike traditional branding, advertising, marketing, or even newer native social media campaigns, money can't buy social proof. It can only be purchased with the most valuable currency in real estate: social capital. Put simply, social capital is your reputation, and everything that follows.

Measuring the Value of Social Capital

For a brokerage, social capital can be measured in the opportunities, referrals, word-of-mouth marketing, and — now — the public ratings you and your agents collectively attract.

Social capital has real monetary value. The average person moves seven times in their life. For the investment you make in your clients – your time, knowledge, and top-notch customer service – customers will want to pay you back with loyalty. So even if the first home you sell to a given client is a loss leader, the next six might be extremely profitable. That profit increase is the return on your social capital, and it can be huge.

Seek Opportunities to Earn Social Capital

Consider how you conduct yourself with the people around you. Every business transaction takes place within a larger social environment. To build your social capital in life and in business, treat people the way you'd like to be treated.

Ensure that your agents are helping clients make choices that are right for them. Never put money before people. Dream with clients about big houses — but also support them and their small mortgage. Financially and spiritually, your social capital is always worth more than any individual deal.

A Brokerage Rich in Social Capital Starts With You

The best way to create a company culture around social capital is by taking great care of your agents. Offer encouragement when first-time buyers take them on emotional rollercoaster rides. Praise their patience and their kindness. Explain the importance of investing in relationships. Coach them on how to break from their sales scripts and speak to clients from the heart.

In the short term, you and your agents will undoubtedly earn five-star reviews. But over time, you'll earn a loyal book of business.

To view the original article, visit REALTOR®Mag.