Theodore Levitt, a Harvard business professor and editor of the Harvard Business Review, wrote how the “ongoing nature of services and the growing complexity of technology” will change the seller’s focus from “simply landing sales to ensuring buyer satisfaction after the purchase.”
It’s an apt summary of the challenges agents face in 2016: As technology erodes traditional value, they must add value in new ways. But Levitt wrote those words in 1983. Why are real estate agents only now catching up?
The nature of transactions might help explain the delay.
Different industries, consistent products
In the 1980s, sales contracts in many industries — manufacturing, industrial supply, even books — changed to include protocol, education, repairs and support.
Salespeople, Levitt then argued, must manage the customer relationship throughout the ongoing delivery of those services to ensure repeat purchases.
In contrast, residential real estate transactions haven’t changed as much. The property is exchanged for money. And the product hasn’t changed, either. Last time I checked, most homes still have walls, rooms and a roof.
So it’s not surprising that relationship management strategies in real estate are lagging, too. Here are three very real suggestions I’ve encountered in the past year while reading trade magazines and blogs:
- Call your clients and ask how they’d spend the Powerball jackpot.
- Send your clients three business cards, and ask that they distribute them for you.
- Create a Valentine’s Day Facebook gallery with photos of houses you love.
If a person used these strategies to generate leads for enterprise software, for manufacturing materials or for aerospace components, they would be fired.
Agents must acknowledge they sell comparable products: Homes are assets worth hundreds of thousands if not millions of dollars. They are tools selected to sustain five, 10 or 30 (or more!) years of use. They are investments expected to generate a significant return.
A home purchase, then, should be treated with the same energy, care and personalized attention as a major corporate account. And by extension — and more importantly — so too should the customer relationship.
That means an end to the wide-net gesture. Sending a just-listed postcard to a recent client is ineffective at best and disrespectful at worst. Such a gesture, after all, presumes your client is unhappy with her recent purchase. Why suggest such an idea?
The counter-argument here is obvious: “They might know a friend who’s looking!” And a Valentine’s Day photo gallery “promotes an emotional connection.”
All true. But those are excuses, not strategies. Coming up with a reason something might work doesn’t make it the most effective or efficient choice.
Post-transaction engagement must be personalized, responsive and uniquely planned from the moment the sale closes.
“The buyer expects the seller to remember the purchase as having been a favor bestowed, not as something earned by the seller,” Levitt wrote. It’s up to the seller, then, to pay back that debt or else the relationship will suffer.
Here are some key principles for managing customer relationships:
1.Build dependencies
“One of the surest signs of a bad or declining relationship is the absence of complaints from the customer,” Levitt wrote. It sounds counterintuitive, but no client is ever completely satisfied.
A lack of complaints means that your client thinks you’re unable or unwilling to solve a problem. Effective communication doesn’t just sustain awareness, it creates an environment of candor, expectation and service that expands the value of the initial relationship.
2.Plan for their economics, not yours
The client who bought a two-bedroom condo 10 years ago shouldn’t be marketed to the same way as a new young contact.
“Instead of trying to get buyers to want what the seller has, the seller tries to have what they want,” Levitt wrote.
That means supporting your client between transactions with added services. And it means adapting your business to meet client needs.
If you spent 10 years helping buyers find condos and starter homes, develop an expertise in larger properties. Be ready when your first clients look to upgrade.
3.Treat relationships like assets
The notion that a salesperson needs only charisma is outdated, Levitt argued. And that was over 30 years ago. Levitt’s article, of course predates — or predicts — the rise of customer relationship management software.
But it doesn’t take expensive software to put an effective system in place. Levitt outlined a four step process:
- Awareness
- Assessment
- Accountability
- Actions
The key takeaway here is that actions come last. Don’t spend money on marketing and measure the effectiveness afterward.
Instead, talk to your clients regularly, compare their intentions and needs with the marketplace and then invest in marketing.
Mike Pontacoloni is the director of agent services at myHomeProNetwork, a real estate technology company. Follow myHomeProNetwork on Facebook or Twitter.
