RIS Media produces a monthly magazine publication called Real Estate Magazine. I read an article on their website a while back I would like to discuss entitled, “CRM: Cheaper to Keep Em.” Bob Corcoran is a real estate coach and speaker who was interviewed by RIS Media for this article about CRMs, which stands for customer relationship management. CRMs are a type of database software that salespeople use. This blog is geared towards realtors, but it is also important for homebuyers and sellers to see how realtors and mortgage loan officers, or anyone for that matter, organize and use their data.
The key points Bob Corcoran brought up for realtors in this article are list below, followed by my take on them.
- Bob: CRM is more than just a database. CRM is a system that lets you store all of your contact information, and the best ones let you launch action plans with repeatable activities like home buying anniversaries, birthdays, etc.
My take: CRMs should mostly be used for value added activities that do some good for the client. Saying happy birthday is fine, but the clients have plenty of people wishing them a happy birthday. Unless you have a true friendship with the client, I’d use scheduled follow-up to offer valuation assessments of their home on a running basis, neighborhood news, recent sales in their immediate area, etc.
- Bob: CRM lets you categorize your contacts so you can quickly find and communicate with specific individuals or groups. Bob Corcoran says it’s five times cheaper to keep a client than to find a new one. The National Association of Realtors says 85% of agents quit communicating with contacts after six months.
My take: It is hard to believe a realtor may give up communicating after 6 months, because sometimes it takes far longer than 6 months to buy a home. I have stayed in touch with potential mortgage clients for years, offering value added information along the way, before finally earning someone’s business. To me, when someone is in your database, they are there forever, until they unsubscribe from your email list, mention to you they are working with someone else, or find some other way to move on without you.
- Bob: Action plans revolve around connecting with contacts. Real estate is, and always will be, a people business. So I’m talking about action plans for your sphere of influence, your past clients and all prospects. The type of contact needs to encompass phone calls, letters, postcards, emails, direct mail, or a combination of any of those.
My take: I definitely think a mix of contact types is needed. Some people dislike even very informative emails, and see them as spam, so they unsubscribe from your email campaign. Other people may immediately throw away your postcard mailer, and see that as junk mail. However, they may not mind a quick call in the late afternoon. Maybe they hate all forms of contact, but follow your blog or follow you on Twitter. This is a push versus pull discussion. Some people do not want information pushed to them, but they want to be able to pull it when they need it. This requires a company to have a detailed website, blog, Facebook page, and Twitter account.
- Bob: How often should agents call through their CRM?
Bob Corcoran says it depends on how big the database is. If it’s a size that allows you to call all of them, do that. If you can’t, identify the customers who’ll give you the most referrals. I also recommend calling five people every day.
My take: This approach needs to be a tailored to each client. You will get a feel for who does not mind a phone call, and who does not want to hear from you again by phone until they need you. Figure it out, make a note in your database accordingly, and move on.
- Bob: What are the biggest struggles or challenges realtors face with CRM? Most salespeople don’t make preserving relationships they’ve already developed a priority. We like to identify what we call the director of raving fan service. Putting a person in charge of CRM is vital. Then hold them accountable.
My take: I don’t know that you need to put a person in charge of the CRM unless you have a very large team and a very large database. If your database is smaller, you can do this on your own. However, you need to allot time on your calendar for “client relationship preservation” and force yourself to make calls, send emails (not email campaigns, but personalized emails), reference a blog you wrote, etc.