It costs businesses a lot more money to acquire a new customer than it costs them to retain their old customers. It is easier to get people who know and trust you to buy from you again and again than it is to get perfect strangers to take a chance on you. This is true for all businesses, including real estate agents and property management firms.
As an estate agent or property manager, how much are you paying for each new customer? To find this, divide your total marketing expenditure by the number of new customers added. In order to be maximally profitable, your business needs ways to attract a steady stream of new customers while keeping the cost of each new acquisition to the minimum.
How can you do this?
Your best opportunity for ensuring a steady flow of new customers into your business without any need to increase total marketing expenditures lies in exploiting your networks. The relationships you have built over the past years hold the keys to expanding your reach without spending more money.
Your next customer is currently a long-term customer of a business that is well-known to you. Among the thousands of people dealing with the hundreds of professionals on your contact list is someone who needs what your business offers. But you have no access to that person because you have no way to access the wealth locked within your network.
Think about this: real estate agents and property managers often deal with the same clients. But since what they do for those clients is completely dissimilar, real estate agents and property managers are usually not in competition with one another. They serve the same clients but in a way that is complementary rather than competitive.
This creates opportunities for estate agents and property management firms to build synergies or mutually beneficial partnerships. Property managers and estate agents can give each other access to each other’s clientele without being afraid that the other party will take away their customers.
How does this arrangement work?
How do property managers and real estate agents benefit one another?
As a real estate agent working to buy income property for a client, you only solve a small part of the client’s problems. After you find the property and the client pays for it, your work is done. Yet the client’s problem is not over since they still need a property manager to make that property profitable. Although it’s not your job, you most often than not know of a property manager who can do a good job of managing the building.
In this scenario, you can do one of two things. You can walk away and let the owner find a property manager for themselves. This is the path taken by most real estate agents. It is an option that offers short-term convenience and huge losses in the future. This is because this limits your relationship with the buyer to that one property because you do not make the effort to build a lasting relationship with them.
The second option is that you take an interest in the operation and success of the customer’s income property. You do this by introducing them to a local property management firm that will help them manage their property. By doing this, you show the client that you are invested in their success and become a part of their story going forward.
What this does is retain your firm as that property investor’s go-to estate agent. They will turn to you when it comes time to sell that property or if they decide to add more properties to their real estate portfolio. By being invested enough in your clients to want to ensure their success, you elevate yourself from being an estate agent to becoming their investment consultant.
But this is not the only benefit that accrues to your business.
When you refer your client to a property management firm and they end up signing a management agreement, the property management firm will pay you a commission for sending them that client. By facilitating the success of the property owner and the property manager, you improve the performance of your business by adding an additional source of income.
Furthermore, you gain access to the property owners who are already signed up with that property manager. If any of the owners decide they want to sell their asset, the property manager can connect you to that owner. They will also refer investors who are in the process of expanding their portfolios, as well as, tenants who decide it is time to buy their own homes.
Taking advantage of their relationship with local property management firms is one of the best ways estate agents get a steady flow of new customers with almost zero customer acquisition costs. If your estate agency is not using this strategy, you could be leaving a lot of money on the floor.
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