Relationship marketing emphasizes customer satisfaction and retention, with an eye toward building longtime profitable relationships, according to Author Mari Smith.
It differs from other forms of marketing because it focuses more on the client relationship and its value over the long term, rather than relying on more intrusive promotional and sales messages. Its key principle is customer retention.
The good news for the real estate agent is that relationship marketing is less expensive in the long run than other forms of marketing – especially in competitive markets, according to Philip Kotler, co-author of “Principles of Marketing.” “In markets with increasing competition,” the author says, “it may cost five times more to attract new customers than it would to retain current customers.”
Pretty amazing, huh? FIVE TIMES MORE money to chase after new clients than to cultivate the ones you already have.
If your database is populated with only former clients you’re missing out on a huge chunk of new business. You should have every single person you know in your customer relationship management (CRM) platform – from your hairdresser to your aunt Martha. If they have a pulse, they should be in there.
Here’s why this is important: the relationship marketing approach also focuses on customization of your marketing efforts, according to Jim Novo, author of “Drilling Down.”
“Customize programs for individual consumer groups and the stage of the process they are going through,” says Novo, “as opposed to some forms of database marketing where everybody would get virtually the same promotions,” he concludes.
Marketing whiz Seth Godin, in his book “Purple Cow: Transform Your Business by Being Remarkable,” agrees and insists that you should “differentiate your customers. Find the group that’s most profitable. Find the group that’s most likely to influence other customers. Figure out how to develop for, advertise to, or reward either group . . . cater to the customers you would choose if you could choose your customers,” suggests Godin.
A basic, no-brainer example of this would be compartmentalizing your database population into potential buyers and potential sellers. A more focused approach would involve drilling down deeper into the database customizing your marketing approach to an ever more concentrated population.
So, now that we know the “who, what and how,” let’s take a look at additional ways to drum up referrals.
One of the best ways to grow your farm and stay top of mind with your network is by reaching out to each person, consistently, over time.
Many agents swear by their drip email campaigns, where automated emails are sent out to selected contacts in your CRM database. How frequently you contact these people, however, sits on a fine line between reaching out and spamming.
Some experts claim that dripping on these folks once a week is going to eventually get your emails tossed in the trash or blocked from delivery to your contacts entirely – especially if they don’t plan on moving for a year or so. A monthly email is more appropriate – even longer is fine. Just making the contact without annoying people is what’s most important.
I live in a city that is home to a certain local home-oriented magazine. The first time I received one of the glossy publications I read it cover to cover only to learn that it is completely void of relevant content and full of advertising. Every time I receive one now it goes directly into the trash.
You have one chance to lure your email recipients into actually reading your drip campaign and that occurs with your first email.
Depending on how large your database is, you may have to create several focused email campaigns. Some of the categories to think about include quick (the operative word here) information for:
To stay top-of-mind with past clients, think about sending information on their interests:
Whatever you choose to send, make it count. Wow them – make the recipients look forward to the next one.
While email drip campaigns are an efficient, inexpensive way to keep in touch with people, sometimes a face-to-face encounter is called for. Many successful agents plan client-appreciation events periodically throughout the year or one splashy annual event.
One California agent classifies her clients according to how big their sphere of influence is. Those with a huge network of contacts she calls her “A” group and those are the ones she tends to go a bit above and beyond to maintain relationships with. Her preferred method is to never miss their birthday by issuing a lunch invitation for birthday week. Pricey? Perhaps, but memorable and tax deductible as well.
Zephyr Realty San Francisco’s Wes Freas holds an annual event that his former clients never miss: a holiday wreath decorating party. This is a highly planned event that he begins preparing for weeks in advance. Held in his oversized garage, there is food, a bar and tons of baskets, laden with various decorating tidbits. Oh, and wreaths to decorate, of course.
When Kathy Broock Ballard with Max Broock Realtors in North Oakland County, Michigan found out that the local women’s shelter was in dire need of bras for their residents, she came up with an idea to mix fundraising and client retention. Named The Annual Erin Go Bra(gh) party, she invites her “A” list clients, friends and colleagues to a buffet lunch and cocktails each St. Patrick’s Day, asking only that they bring new bras or other undergarments for the women’s shelter.
Then there’s the soirees made famous in Bethesda, MD thrown by Buyer’s Edge’s Steve Israel. He and his wife and business partner Wendy think nothing of holding a catered cocktail and dinner event for over 500 former clients. With music by the tommy Dorsey Orchestra amidst the sophistication of a historic ballroom, it’s an event clients will not soon forget. And, best of all, guess who will be top of mind when asked about real estate agents?
Like Ballard and the San Francisco agent, your “A” group — and maybe even the “B” group – is who you want to keep in touch with face-to-face contact during the year if at all possible.
Read more here.