Agents Succeed Through Relationship Banking

by Dave Skow, on 14th December, 2009 •

In a market such as the one in which we find ourselves today, agents need to have a rapport with their current clients to be able to work with them in achieving the highest possible sale or rental price for their property. They also need to look to past clients for future business.

Real estate is possibly the industry which most relies on referral and repeat business to ensure continued success.

How do we make sure that the clients and customers we deal with today will come back to us in the years ahead? The answer is relationship banking.

Think of the relationship that you have with a client as a bank account. To keep that client happy you need to ensure that there are always funds available in that account.

To do this, deposits must be made. Things like returning phone calls promptly, providing detailed feedback and going that extra mile for your client are all forms of deposits.

Once the account is in credit, you have built a rapport with the client and they should now trust you with the sale or management of their property. If necessary, you can now look to make withdrawals from the account. If you need to adjust the price, arrange an inspection after hours or if we make a mistake and leave the living room light on after an open house inspection, we possibly have enough credit to cover this.

While dealing with their vendor, an agent provided a comprehensive weekly report outlining how many inspections had taken place, what prospects there had been for the property so far, and what kind of prices these people were gravitating towards.

The agent also made regular contact with the vendors to make sure they were satisfied with the job he was doing. After their property had been on the market for six weeks without having any offers that met the vendors’ desired target, the agent met with them and discussed reducing the price in accordance with what the public thought the property was worth.

The vendors agreed immediately, not only because of the evidence that was presented to them, but because the relationship bank account was in credit due to the deposits the agent had made throughout the marketing program.

The relationship account can never go into overdraft! To guarantee a strong affiliation with the client, the account must always remain in credit. It is easy enough to ensure this by making positive deposits and limiting the need to make withdrawals.

Should an account go into debit, the agent runs the risk of performing to a lesser standard than expected of them, or losing the business all together. Not only does this mean a loss of income, but it also leaves the agent vulnerable to criticism and bad references to the clients’ friends and family and therefore no referrals.

A past client of mine was relocating to Queensland from Wagga. Being an elderly lady with no family in town, she found it hard to obtain boxes to use for the move.

I had a relative in town who managed a retail store, so I arranged for a short period of time for the boxes to be kept. At the end of the week, I collected them and took them to the client who was absolutely astounded at the gesture.

Such a small thing which took me one phone call and half an hour of my time meant so much to her and added a huge deposit to the relationship bank account.

In return, a subsequent three listings were referred to our agency by her. It is that easy to be a master of relationship banking!

As with bank accounts, over time you will receive interest so long as you keep boosting the account with deposits. This interest is seen by way of repeat and referred business.

Relationship Banking Via Your Database

It is imperative to maintain an up-to-date database of all past clients and keep in regular contact with them.

There are a variety of ways to do this. Some agents will give clients and customers a bottle of wine or some other gift once a property sale has settled, but there are far too many that don’t follow up after this.

All agents should make contact with past clients at least every 12 months. And it should be something a little more personal than a mass mail-out announcing that you have ‘Just Sold 1 Smith Street – Looking for Similar Properties’.

It could be something simple like a Christmas card or a lotto ticket or gift voucher on the anniversary of their purchase. By doing this, not only are you keeping the account in credit, but when it comes time for them to sell or buy, your name will be the first they think of.

The worst feeling as a real estate agent is to open up the real estate section of the local paper only to find that a property you sold 12 months ago is back on the market but with a different agent.

Why didn’t the vendors come to you? Was the service you provided them less than satisfactory?

The truth is that you probably did a great job as their agent at the time, but have lacked the follow up needed to get the repeat business. The competitor agent probably got lucky and just happened to cold call the vendor while they were contemplating selling.

You cannot rest on your laurels and wait for business to walk through your door just because you think you did a good job last time.

Every highly successful agent is also a great communicator and relationship banker. They understand the importance of maintaining a positive balance in the relationship bank account and that to be proactive is the key to repeat business and maintaining the relationship bank balance.

Not only will maintaining the accounts go some way towards getting repeat business, but it will also lead to referrals from these past clients.

Almost everybody has a friend or relative who currently have, or are considering putting, their house on the market. So if you have sold 30 properties in the last year, you have 30 past clients who know at least one other person each considering selling.

If you have maintained the relationship bank accounts with these past clients, they are going to tell their friends and relatives what a great agent you are and you will most probably get a call from them and the chance to list 30 properties without knocking on a single door!

On the flip side, if you have not maintained the account, your balance will be whittled away with bank fees and charges, and your past clients will not even think to tell their friends and relatives about you because you have simply done the job you were paid for and nothing more. They see you as an ordinary agent, not an extraordinary agent.

Your past clients and customers aren’t the only source of referrals. Everyone you have regular contact with is a potential client, as well as a potential referrer.

Therefore, we also need to make sure we are maintaining a positive relationship banking account with these people. They could be your hairdresser, community leaders, your children’s school teachers or restaurant owners. The possibilities are endless, but only if you keep the account balances in credit by making regular deposits.

Any referrals that you receive should be appreciated, and as such you should demonstrate your appreciation. There are strict penalties under the Property, Stock & Business Agents Act (2002) for inducing clients and customers through a third party, however a bunch of flowers or a nice bottle of wine to someone who refers you business is not classed as a commercial inducement arrangement.

By rewarding the referrer, you are making yet another deposit into that relationship account!

Relationships really are the new currency of the real estate industry. Relationship banking is creating growth and profit through caring and connection and is long lasting with endless possibilities to produce results. It is a skill that the majority of agents do not fully use to their advantage, but for those who do, it creates real wealth through long lasting associations.