This week, we're proud to present WAV Group's latest whitepaper on Home Services. This is Part 2 of 5. Read Part 1 here.

Integration into Consumer Communications

There is a fundamental resource management process that many enterprise brokerages have not yet figured out. They operate their home services companies as independent companies that do not work together very effectively at supporting the consumer. Cooperation between the companies is so limited that the only thing they usually have in common is the shareholder. Cross selling is poorly executed and poorly communicated. Insurance and mortgage service providers generally get most of their in-house referral business by literally bumping into an agent in the office who is working with a customer. Enterprise brokerages must have enterprise resources in place that allow all home services companies to share consumer information across the enterprise.

The structure for enterprise resource management is a combination of Business-to-Consumer and Business-to-Agent-to-Consumer.

• The Business-to-Consumer communication has a number of prongs. Among them are the broker website, broker advertising, and leads generated by the brokerage. In addition, brokerages should be developing communications to clients who have already completed a transaction with the brokerage. There is always some friction with agents on this strategy. Agents do not want the broker communicating to "their" client. The brokerage must solve for this in their resource management. You must be able to demonstrate that the company is not stealing the client from the agent for the purpose of mining future real estate transactions.

• Business-to-Agent-to-Consumer communications are one way to solve the friction issue with agents. The brokerage develops a communications plan that is branded to their service provider, and delivered through their service provider. Depending on the solution you choose, the agent either has the ability to modify and send the communication, or the enterprise broker automatically sends it.

All home services offerings must be communicated in a meaningful way in all of these communications. Consider your audience and compose your message accordingly. Enterprise resources used to effectively reach these audiences include email, website publishing (or blogging), and social media publishing.

Transaction-Based Mindset

Most enterprise brokerages operate each home service company with the focus on transaction volume per month. The marketing to support monthly transactions is overweighed in the direction of new business acquisition and ignores the potential of assisting past clients. This is perplexing and irrational since every piece of data (e.g. NAR, CAR studies and others) indicates that repeat and referral business constitutes 80% or more of sales. If anything, communication and marketing to past clients should be outweigh efforts made to acquire new business. A strategic shift toward past client social networking, newsletters, and mailers may secure increased sales penetration beyond the transaction.

There are not as many new buyers in the marketplace today, as some have purported. First-time homebuyers are generally scarce and have difficulty in today's market obtaining traditional financing. Before the mortgage crisis and Frank-Dodd, first-time homebuyers made up 1/3 of the market. Today, in most areas, they represent less than 20% of transactions because of new and more stringent lending guidelines. Another factor to consider in allocating marketing budget to new homebuyers is that many new buyers choose their agent from a family or friend's referral.

Resourceful companies will profile a consumer's entire family and endeavor to market mortgage refinancing, second mortgages, and annual renewals in insurance, and home warranty. Brokers need to stop focusing on unit sales, and begin focusing on sales over the lifespan of the customer. Profit per transaction is a variable that is dependent upon the use of all available home services. WAV Group uses the common term "Customer for Life" in developing the core elements of this critical strategy. Sophisticated direct marketing firms refer to this strategy as the lifetime value of a customer.

Click here to read Part 3.