The person who controls the data, controls the game. This statement should serve as the best advice for every business owner.
In our world, data represents the contacts we enter into our CRM systems; those individuals that we come into contact with when assisting them with their real estate needs. The contacts represent and include property owners, buyers, investors and tenants.
Some of those contacts we may have transacted with, many we haven’t. We begin the relationship at the point of first contact, and thereafter we hope to nurture that relationship over a period of time through consistent and quality communication.
The fight for data is fierce in every industry and is becoming ever more difficult to acquire. Hence the ever-increasing battle to protect it. Permission-based databases are extremely valuable because they allow for authorised communication to nurture and build trust with future clients.
We strip back four rules which when applied, create and extract the greatest value and return from a database.
Rule 1. Annual revenue value
Insights into the revenue value of your customer database is crucial. The fact that your client base has value is obvious because no company would exist without customers. Having the opportunity to covert contacts into clients that you have met should not be underestimated.
To calculate value in terms of residential sales, it’s a matter of estimating how many of those contacts would sell in a twelve-month period. Simply put, if you have 1000 contacts of which 50 sell, with an average $15,000 selling fee, the estimated annual revenue value of the database sits at $750,000.
It’s an important formula to remember and further acts as a good motivator to protect it.
Rule 2. Quality over quantity
The value of a database is in direct correlation to the quality of the data. That is, the contact type (seller, buyer etc) and the communication channels obtained, such as mobile, landline, email and property address. The more channels, the more flexibility and availability to connect.
Using a multi-channel strategy optimises engagement. For example; a long-term potential seller would be on a communication plan that would include an annual hard copy, coffee table, quality market report, monthly email market update, property anniversary phone call and as they happen just listed / just sold SMS messages. Naturally, communicated information needs to be of value and timely to the recipient.
A point to consider. If the action plan is difficult to implement, it is less likely to be actioned. Overzealous action plans are rarely followed.
Rule 3. Frequency of communication
This rule is an interesting one. When can communication with your contacts become too frequent? That is, you may have reached the point of borderline harassment?
I find it interesting as many agents may feel uncomfortable and make the mistake to dramatically reduce their contact points for the fear of over contact. When using the multi-channel approach as mentioned, your chances of crossing that line is reduced.
The aim is to remain top of mind and build trust so that when those contacts are ready to engage, you are at the top of the list, let alone the only one on the list. That requires frequency of communication.
Effective database management, therefore, requires a tailored and personalised approach for each contact. It all starts at the beginning of the relationship and any future communication and the channels used are those that best reflect the needs of the contact.
Rule 4. Data acquisition and ownership
Real estate is a transient profession and disputes often arise as to the ethical, moral and legal rights to data ownership. When agents find themselves considering a move, it is imperative that they gain a full understanding of their database position. Agency principals need to have an office-based strategy to protect their position.
To capitalise fully, many agents and agency principals are allowing in-office agents the opportunity to take full control and ownership of their databases and client relationships. Others choose to take full control by going into business for themselves and building their own agency. There is no absolute right or wrong; just clear rules of engagement needed.
There is no question that an agent’s database is an invaluable asset when it is cared for and used correctly. It is the first, and most important, piece of advice that a newcomer into our industry can receive.
Wishing you every success in your real estate career.