As the effects of COVID-19 ripple across the real estate market, it’s difficult to see what, realistically, you can do today to handle the market disruption. This article proposes a framework that will make sense of how your client-base is reacting, what you can do to mitigate short-term impact to your business and how to prepare for a recovery.
Whether you focus on buyers or sellers, the lifeblood of your business is always your client-base. Especially during a market disruption, it’s mission critical to ensure that your clients remain engaged and loyal. Here’s why client engagement is likely the highest return on investment activity you can engage in today:
- Your short-term business is driven by your clients’ engagement and loyalty, and every dollar counts.
- By preventing client attrition now, you can save on marketing efforts and dollars you have to spend later to replenish your book of business.
- Businesses with the largest and warmest client-base will recover faster and stronger than businesses that have to rebuild their client base.
Step 1: Understand the stages of client motivation
At any given point in time, your client base can be categorized into three stages of motivation:
- Potential clients are in your sphere-of-influence and may decide in the future to work with you on a transaction. They are consuming some real estate-related information, but it’s primarily to monitor the market, or to satisfy their curiosity. These consumers are not yet loyal to you or your business.
- Opportunistic clients have expressed interest to buy or sell if the market conditions change in their favor, or if a good deal can be put together. Their timeline is undefined, but they are looking at listings or market data in earnest. They are more loyal to you and your business.
- Serious clients are already working with you to buy or sell within a finite time period. They are connecting with you often to strategize and consider next steps. These are your highest value clients since they will generate revenue soonest.
During market disruption, clients will begin to retreat, going from serious to opportunistic, and opportunistic to potential. This, in effect, is a loss in both short-term business and future potential. If practical considerations are limiting the amount of time you can spend on closing business, preventing this retreat will pay dividends by protecting your most valuable asset: your book of business.
Step 2: Take inventory of your client base
Even during normal market conditions, many agents and brokerages don’t have a good grasp on the breakdown of their client base. A disruption in the market is the perfect time to get a clearer picture.
The first and most important tool to gather information, of course, is personal outreach to the client. Especially for existing serious clients, and any known opportunistic clients, an organized outreach campaign via phone or video conference will clarify where they stand, and how they want to move forward. This alone may show that there’s enough short-term interest to keep focusing on transactions, or whether to shift focus to client engagement.
Second, it’s important to dig into any client engagement software you and your clients use. Whether it’s the MLS, an IDX, or a collaboration platform like Homesnap, Boomtown or RealScout, the level of client activity can be a good barometer of how motivated they remain. We’re finding that buyers are just as engaged with listing alerts and home searches as before, relative to listing volume. This suggests many consumers may still be opportunistic transactors.
Third, proactive email outreach can be a good mechanism to measure interest in customers earlier in their buying/selling process. Measuring the open/click rates on a highly relevant informational newsletter or email update can indicate what portion of your client base is open to continuing a conversation with you right now. This is especially powerful if you can compare current metrics to historical metrics to understand the difference.
Armed with this information, which can be compiled in a matter of a week or two, you can shift your focus on how to tackle the issue of increasing client engagement.
Step 3: Build firewalls to stop the client retreat
Although practicalities may prevent you from stopping your most serious clients from reconsidering their active transactions, it is certainly possible, and critically important, to keep the opportunistic stage as large and healthy as possible, blocking a retreat to the potential stage. As discussed at the beginning of this article, this will pay dividends by reducing the effort and money spent reactivating clients later-on, and ensures that when market conditions normalize, you’ll be ripe with transaction potential.
There are three principles that will drive client engagement:
- Relationships: Your clients need you now more than ever. Whether a buyer or a seller, a real estate consumer needs expertise and guidance especially during market uncertainty. It’s a good opportunity to schedule a remote consultation with your clients and discuss how market disruption will translate to your clients’ real estate goals. As always, a personalized, consultative approach is best, and if transactions are slowing down, it’s a great time hunker down with a video conferencing tool like Zoom to connect with clients systematically.
- Information: Especially during times of crisis, information becomes a scarce and confusing commodity. When it comes to real estate, you have both the ability and responsibility to communicate accurate information to your clients that will guide their real estate decisions. Market data is, of course, useful, but regulatory changes and refreshed tactical information is critical as well. In fact, the right information will keep serious buyers to stay serious or opportunistic, and it may even activate some potential clients to consider moving up to the opportunistic stage.
- Business network: Now more than ever, who you work with and who you know will be incredibly valuable to your clients. When the open market is disrupted, both buyers and sellers can become timid in the way they approach their potential transactions. One key way to mitigate this slowdown is to work with your trusted network to uncover information and opportunities that can reduce risk, and increase client confidence.
By focusing on these three areas, you will position yourself and your business as a remedy to the current market conditions, and not a passive participant. This will sustain client engagement, helping the short-term and long-term success of your business.
It’s just the beginning
Thinking hard about client engagement during a time of crisis is a matter of necessity, but the opportunities lie beyond market disruption. Client engagement is synonymous to high marketing conversion, high client loyalty and high repeat rates — everything a thriving business seeks during normalcy. Therefore, because the investments you make in these extraordinary times will lead to a better business in the long run, no work is wasted.
What cannot be ignored is that you have an immense amount of control on how to respond to market disruption, and investing your time and effort into cultivating your book-of-business may be the highest ROI work you can do today. Your current and future clients are looking for a partner in their real estate journey that can help you in good times and bad, and this is the time to go out there and prove your value.
Stay tuned for future articles where I’ll share more detailed tactics around the three factors that can power an effective client engagement firewall: relationships, information and business network.
Andrew Flachner is President and Co-Founder of RealScout, a startup that empowers real estate brokerages to come together and build a more diverse, sustainable, and vibrant real estate market. Email Andrew