The Real Estate Encyclopedia
The Next Level of Customer Retention
Category - Real Estate Information Sources - Real Estate Articles
All profit minded real estate professionals want their business to grow. At the same time, they struggle inwardly with how to fulfill the assignment of attracting and retaining prospects in a constantly changing real estate environment. So what should smart agents know?

Understanding The Requirements

For starters you must understand new guidelines, technologies and action plans designed to find, serve and retain more customers. If the task seems overwhelming don’t worry; there is good news for you ... it really isn’t overwhelming. You just need to break it down into its component parts and then execute a strategy dealing with each segment.

Guidelines, Technologies and Action Plans

During the last decade, the Internet became a driver of fantastic financial hopes and enchanting customer acquisition dreams with its potential for worldwide outreach and almost instant communication. Unfortunately, as many disillusioned website owners can now testify, clicks don't necessarily equate to paying customers.

With this in mind, it is crucial for real estate professionals to lay down a solid foundation to work from. Whether you continue down your existing path, or use one of the new business models that have been created during the last decade, you must move your real estate business to the next level. This is going to require you to use good strategic customer retention procedures and those procedures involve multiple and varying components that are largely founded upon two important customer acquisition rules.

Rule #1 - Without Customers - Businesses Fail

  • Business must understand customer behavior.
  • Business marketing strategies must be designed around customer behaviors, needs, supplies and demands.
Rule #2 - Without Profits Generated By Customers - Businesses Fail
  • Profits must be sustainable over a specific initiative life cycle.
  • Business must foresee, forecast and build a profit model that takes into consideration all possible contingencies.
Five Steps To Customer Acquisition

As you begin this customer acquisition journey, it is important to first examine a few concepts that introduce the current state of customer acquisition. Let's start by offering the following 5-step methodology, which looks simple but requires diligence to both implement and maintain as a sustainable initiative:

  1. Identify imminent buyers/sellers with purchasing/selling intent
  2. Target these potential clients
  3. Capture their attention
  4. Convert them into clients
  5. Retain them, providing lifetime value
Every real estate professional's situation is unique and therefore there are many different customer acquisition services and tools available to address each situation.

Current Services & Tools Include:

  • Direct response
  • Dedicated inbound services
  • Multilingual services
  • Outbound call management
  • Interactive Voice Response (IVR)
  • Advanced speech recognition
  • Web based services
  • Contact management
The ABCs of Customer Acquisition

Real estate professionals must understand their customers’ behavior in order to influence, acquire and serve them effectively. When it comes to understanding customers there are six basic stages that they pass through, which affect how they behave:

  • Unaware prospect
  • Aware prospect
  • Interested prospect
  • Trial customer
  • Repeat customer
  • Loyal customer
Customer behavior and marketing strategy studies, concerning increasing profitability, consistently note that businesses must gain a better understanding of their customers to be successful. Therefore, they note, that customer acquisition strategies should take the following into consideration:
  • The psychology of how customers think, feel, reason and select between different alternatives (e.g., brands and products).
  • The psychology of how customers are influenced by their environment (e.g., culture, family, signs and media).
  • The behavior of customers while shopping or making other marketing decisions.
  • Limitations in customer knowledge or information processing abilities, which influence decisions and marketing outcome.
  • How customer motivation and decision strategies differ between products.
  • How marketers can adapt and improve their marketing campaigns and strategies to more effectively reach the customer.

Understanding these issues can help you adapt strategies that earnestly take the customer into consideration. After all, customers are sometimes persuaded more by logical arguments than by emotional or symbolic appeals.

The Economic Value of a Customer

If you think in terms of customer value – the potential profitability of each customer to the company as a financial asset - your acquisition and marketing programs will change. It all comes down to customer equity management, which is the building and implementing of powerful new business and marketing systems centered around five key practices:

  1. Customer behavior research and implemented strategy.
  2. Balancing customer acquisition, retention and add-on selling.
  3. Managing the customer life cycle.
  4. Exploiting the power of databases.
  5. Precisely quantifying customer value and return on investment.
Understanding Customer Value

Understanding customers will enhance your ability to make better decisions and generate higher profits. Basic awareness of customer lifetime value should include items such as:

  • The level of investment in customer acquisition efforts
  • Customer value understanding and strategy
  • Commitment to customer relationship management
  • Customer retention plans
  • Direct marketing programs
  • Distribution of services offered to customers
  • Market analysis
  • Market research
  • Marketing planning
  • Marketing strategy
  • Sales and marketing tactics
  • Service management.
Business marketing strategies must therefore be designed around customer behavior, customer needs and the laws of product/service supply and demand. Approaches to acquiring new customers are also changing as technology changes. You are going to need to optimize all the traditional marketing channels available to you as well as find ways to optimize new avenues made available by the Internet. Discovering and breaking into new niche markets often requires exploring and testing a comprehensive array of prospecting, profiling and modeling options.

One example is a solution offered by a large credit-reporting agency – 215 million customers in 110 million households across the US – is a customer acquisition program that begins with individual customer data. As a large information provider it maintains data on individuals and businesses – both demographic and credit information. It offers the company’s proprietary decision making tools, hosted database technologies, industry-best list processing services and expert letter shop and e-mail delivery systems to identify and reach the best prospects. A service like this is invaluable in advancing your customer acquisition program. Its benefits would include improved response rates, a reduction in promotional and delivery costs and a higher return on the marketing investment – both online and offline.

Customer Acquisition Costs

Online customer acquisition costs are high and getting higher. International Data Corporation (IDC) reported that the average online customer acquisition cost in 2000 was $95. IDC predicts that this number will most likely rise beyond $120 in 2004 with pure-play “e-tailers” bearing the highest costs. With online customer acquisition costs on the rise, having an effective customer acquisition system has become More than just something to talk about.

Broadly speaking, there are three ways to bring online customers to your website: Link propagation (sharing links between websites), banner ads and email.

These three methods cannot be used in isolation but should all be used in harmony to find and capture the target audience. The more you know about your customers, the better prepared you are to communicate effectively with them. This applies to everything from phone calls to email and Instant Messaging. When you have good information about your customers, you can effectively shape your customer care and acquisition accordingly.

A People-Centered Approach

A well-founded, people-centered approach will help you exceed even the expectations of your most demanding customers. It helps you determine which cost alternatives to pursue, depending upon the customer: low-cost alternatives for low-value customers and high-cost for high-value. If you're not sure which of your customers contribute the most value your resource allocation may be ineffective and inefficient.

In a world heavily influenced by fear-generating events your customers want safety and assurance, which often means that they need someone to walk them through a new experience. Successfully acquiring customers requires that you not only understand their fears but that you build into your acquisition efforts some factors to counter-balance those fears.





References


External Links
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Real Estate Information Sources - Real Estate Articles
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