Care about your client, before somebody else does…

With stock hard to come by for some time now, it is obviously vital to avoid losing your current listings to the competition, who may be swooping in and actively touting your clients. So what can you do to combat that threat?

I recently had a really interesting conversation about training with the proprietor of an estate agency, during which he shared his key performance indicators for the previous year. I made an observation about one of his hidden outgoings which had cost him a fortune, to which he responded incredulously: “Almost £1m?”

I replied “Conservatively. In fact, it has actually almost certainly cost you much more than that”.

Most of the offices of the estate agency in question have an admirable market share, but its partners believe there is room for improvement, hence why they provided me with their detailed figures for analysis to identify weaknesses.

One figure jumped off the second page. During the previous 12 months, 37% of the firm’s total resale instructions had been withdrawn from the market without selling.

The branches had been instructed on 2.353 resale properties, with 871 having been withdrawn without selling. At an average fee of £2,850, this translates into a cost of over £2.4m in lost commission.

In our search for estate agency utopia, a dollop of common sense must be applied. Some properties will be withdrawn because vendors change their mind about moving, or because a competitor occasionally sells a multiple agency instruction.

However, while a 0% withdrawal rate is straying well into “perfect world” territory, the partner agreed that 37% was too high, and we settled on 25% as a sensible initial target. Had that been the rate for the previous year, the total withdrawals would have been 588 rather than 871, leading to the opportunity of 283 extra sold instructions at £2,850 per transaction, resulting in £806,550 in extra resale commission.

Of course, the real figure was higher than this because the cost of the abortive work in handling withdrawn instructions had not been calculated. All the time invested in marketing and handling them had been at a cost without return. Furthermore, a figure for the cost of the reputation damage caused by comments made by these unsold vendors to friends, family and colleagues had not been (and probably could not be) estimated.

Solution

We provided extensive training on the numerous steps involved in attaining this 25% target, the key points of which are detailed below.

Staff attitude

Office teams mourn collapsed sales, but are only mildly miffed when a vendor withdraws to try another agent. These events must be treated with equal concern, since both lead to potential lost income.

Attitudinal change sometimes takes time to bed in. A valuer with two messages to deal with – one to call an existing disgruntled vendor/landlord, the other to call somebody taking their instruction away from your main competitor and coming to you instead – will more often than not call the new client before the existing one, which is a questionable decision.

Client care

A reminder system is essential to flag up all available properties requiring a review. Top agents set a fixed time aside each week (eg every Tuesday morning) – often referred to as ‘protected time’ – to contact and update clients about their progress. Agents who fail to maintain such a system risk leaving vendors unattended for lengthy periods of time, which is madness given that research has shown that vendors switch agents due to lack of communication as much as failure to sell or let.

Managing expectations

If a new client is left with unrealistic service expectations at the start, the agent in question will rapidly fall into the overpromising/under delivering trap, leading to inevitable problems. Clarity is crucial at every stage of the transaction.

Trust is also key, with the most trusted agent likely to be successful in securing an initial instruction. However, that relationship of trust must be maintained throughout the process. Agents who fail to launch a property quickly and accurately, to include the property on the agreed portals and to generate interest in a timely fashion will soon lose a client’s trust, increasing the likelihood of switching firms. Meeting, or ideally exceeding, client expectations is best practice.

Client contact

Increased client loyalty is more likely if the vendor has rapport with the whole sales/lettings team rather than just the valuer. Such rapport can be achieved by viewings being conducted and followed up by a mix of team members, or simply through them visiting a property to make selling an easier task. With the right system and attitude in place, agents can proactively provide clients with updates about the sale of their property to maintain their relationship and to optimise client satisfaction.

Rapport building paves the way for challenging conversations an agent may need to have further down the line in the process, such as the need to reduce their asking price, as well as providing clients with a heightened awareness of the efforts the agent is making to achieve a sale. Detailed regular email updates beats no contact at all.

Conclusion

The new mantra in the company is now to “Care about our clients, before somebody else does” already resulting in a more palatable withdrawal rate, enhanced client loyalty, more sales and better presence and reputation.

As a point of reference, one of my client firms had a 2021 withdrawal rate of 4% - imagine the extra income that the firm discussed in this article will bank if they can drive theirs down to that level!

Marvellous, I reckon. Get in touch if you would like to discuss any of the contents of this article. Thanks for reading.