There are two ways for real estate agents to obtain a client: (1) convert an existing customer into a client; or (2) convert a prospect into a client.
Existing customers represent excellent opportunities to obtain clients. You just assisted them in one of the largest financial transactions they’ll ever undertake with a successful outcome. These customers feel good about their recent purchase or sale of a property and they associate you with their recent real estate success. These customers are poised to become your clients. The easiest way to convert a customer to a client is during your initial, discovery consultation.
Like any introductory meeting, listen to your client and present your credentials to demonstrate your ability to get the job done that they require successfully. Also show the value you bring to the transaction and what differentiates you from other agents competing for the customer’s business. Here’s what prospects want to hear to become clients:
- Client vs. customer business philosophy
- Contrast the client approach and the customer transaction approach so prospects understand the additional benefits of selecting you as their agent.
- Begin with the following statement:
- “My business approach is to serve clients for life, rather than just during this transaction. My objective is to be a trusted advisor, providing services and guidance throughout and after the property transaction.”
- Here is what a client expects:
- A meaningful number of value added products and services (later in this document)
Virtually everyone you meet in your service region is a prospect. A new acquaintance doesn’t need to purchase a home within the next six months to become one of your clients. It’s important to distinguish between client prospects and customer prospects.
Customer prospects are people who are undertaking a property buy or sell in the near-term. Since these prospects deliver a potential transaction in the not-too-distant future, agents compete aggressively for this business. The agent’s ability to win the prospect’s business depends on a number of factors, including their credibility, reputation in the community, capacity to deliver quality transaction services, personal referrals and guidance and hand-holding during the complex transaction. This free-market competition to represent a buyer or seller is fierce.
Client prospects are much easier to obtain. There is little competition from other agents to obtain them. Most agents spend the majority of their prospecting activities on obtaining customers, not clients. Not enough agents have interest in expending time and energy with a person who has no immediate interest in the buying and selling of property. To them, that person is not a customer prospect, so why spend (read “waste”) the time?
The search for client prospects is actually easier than finding customers - individuals about to undertake a property transaction on which you serve as facilitator, negotiator and, yes, trusted advisor.
There are fewer agents against which to compete for long-term prospects since most agents are focused on current transaction customer prospects. So a client-first agent focuses on the ways to obtain clients with little regard given to competing agents.
The longer view also requires a shift in attitude. The agents’ objective then becomes to increase the quality of clients, placing less focus on the quantity of clients. For example, an agent with a book of 100 high-quality loyal clients is likely to generate more leads, referrals and future transactions than an agent with a book of 100 marginally-engaged clients. Thus the challenge is to target those upper-tier buyers and sellers and convert these lead generators and property buyers and sellers into your expanding client base.
They get added to the mailing lists for your client base or bases (commercial, property management, rentals, special sales, etc.).
High-quality client prospects have common attributes that are more likely to generate leads, referrals and future transactions over time than lesser-engaged client prospects.
For example, a socially active family with children living in an active neighborhood is likely to generate more leads, referrals and future transactions than a retired couple living in an older neighborhood. In fact, the quality of a client prospect is determined, to some degree, on stage in life of the prospect’s real estate needs.
Prospect Level by Life Cycle
|There’s some risk that they will move away from the community, but if they remain, there it’s usually for trade-up transactions.|
|Mature households usually experience healthy earnings growth over time, increasing the likelihood of trade up, resort and investment transactions. In addition, these households become established in the community, resulting in more referrals and leads.|
|These households are at the peak of their social interaction in the community, making it like that, as a group, they generate the greatest number of leads and referrals.
In addition, ,established families’ children are in the first-time buyer group and this, combined with this demographics’ financial ability to purchase resort property and/or invest in real estate, increases the likelihood of future transactions.
|Retired households are high risk prospects relative to other households. These home owners are entering the end of their home ownership years, and thus, may only have one transaction - a retirement home - remaining.
These older home owners are more likely to move away from the community. In addition, they are less likely to generate leads and referrals because they are not as engaged in community activity, as a general rule.
To build a client base of quality, all prospects offer opportunities for the client-centered agent and none should be overlooked. However, it’s both prudent and productive to focus on those home owners who have the greatest potential for referrals or future transactions.