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Refine Your Customer Database Base to Identify and Best Serve Your Best Customers

May 29 2015

spre refine data identify bestHomebuyers are most responsive to marketing campaigns that bring close knit messaging directly to them. The most personal touches are usually most effective, such as handwritten letters, gifts, personalized e-mail messages, visits and phone calls. However, REALTORS® who build their databases to even a few hundred contacts will soon realize it is impossible to maintain this level of attention with everyone.

That's why identifying your closest inner circle of customers is most important, with a keen understanding of which ones bring the most value to your business.

How to begin refining your database:

According to a recent REALTOR® Magazine article entitled "Know Who Your Best Clients AreKnow Who Your Best Clients Are," there are best-practices REALTORS® can implement to identify their most valuable customers. In the article, Andrea Dixon, executive director of the Keller Research Center and Center for Professional Selling at Baylor University, advocates for ranking the best candidates for a real estate agent's most personalized marketing.

According to Dixon's research, the best candidates will be those who are:

  • Highly satisfied: those who felt your services met or exceeded their expectations
  • Promoters: word-of-mouth marketers who are likely to recommend you to a friend or colleague
  • Repeat purchasers: those who are most likely to move soon — and more often
  • Profitable: big spenders who are likely to buy either currently or in the future

How Effective Can Even a Small Database Be?

Just addressing a fraction of the contacts in a real estate agent's database with a highly-personalized touch can create significant growth opportunities. For example, consider a REALTOR® who targets 150 contacts in their database over a period of several months. Now consider that each of these contacts are connected to 150 other contacts. That leads to a community of 22,500 individuals. On average, about 20 percent of those individuals would be looking to move every five years, which accounts for 4,500 solid leads for your marketing communications efforts.

Picking the Right Contacts

Finding the right contacts to target in your database is what's going to really make a difference with your personal marketing efforts. REALTOR® Magazine identifies four best-practice steps to accomplishing this:

  1. How Satisfied Are They?—start by creating a short customer satisfaction surveycustomer satisfaction survey with those you have worked most closely with. Begin building data on these customers as soon as you close a deal and seek info on how satisfied they are immediately after closing, two weeks later and again six months later.
  2. What's Their Purchase History?—Ask your contacts when they purchased their first home, what was important to them as they made that purchase and what circumstances prompted them to move to their next home. Doing so will enable REALTORS® to identify the driving factors behind recent moves. This may help predict what will spark their next move in the near future.
  3. Are They Your Loyal Advocates?—Loyalty and advocacy metrics are based on one single question: How likely are they to recommend you to a friend or colleague? Contacts consistently referring new clients to you are always highly-valuable to your business.
  4. Do They Spend a Lot?— Conduct a client profitability analysis of your database. Track the value of each contact's historical home purchases, keeping in mind to take the time required for you to conduct each sale. If one client takes three years to look for a home before actually making a move, that client might represent a lower profitability outcome than a client who makes a move within a four- to six-month window.

Also, listen carefully for future purchase triggers. "We know if they're getting married, having children, having more children, sending children off to college, these can all be triggers for a change in real estate needs," Dixon said. Collect such data in your CRM and develop a system to monitor these life-changing events to tailor your marketing messages appropriately to their evolving real estate needs.

To view the original article, visit the Speaking of Real Estate blogSpeaking of Real Estate blog.