Wednesday, January 04, 2006

Losing A Client: Three Lessons

by Osman Parvez


A Tale From The Trenches

The other day I lost a prospective client. He ended up buying a property using another agent and, at the time, I was pretty angry about it. The way I looked at it, I had put in a good deal of time towards helping him with his relocation. The situation went sour when I  happened to miss his call one afternoon and he randomly called another agent.

Sure enough, these things happen in real estate. You haven't been in real estate long if you haven't had an experience like this. There are some lessons to learn...

The particular prospective client (let's call him Louie) came via our partnership with a lead generation service. The lead generator provides people browsing the internet with access to the MLS and listing alerts via IDX. I'll go into details on that arrangement another time.

Louie probably Googled "boulder real estate," found our link, and signed up. He then started looking at properties online and left his phone number. I called Louie and found he had a number of particulars that narrowed his property choices.

Two were critical. His wife was visually impaired, and he needed property that was close to downtown shopping and public transportation. Louie also wanted a large house with at least four bedrooms. He planned to convert one of the bedrooms and about 1/4 of the square footage into a recording studio. His price range was up to $750,000.

Okay, so far so good. We went ahead and set up listing alerts from the MLS and had a few phone calls about various properties. I also sent him our quarterly research reports.

A couple months later, during which time he'd been getting my listings, I get a voice mail from Louie. It's Thursday afternoon and he's called to let me know he's coming to visit and would like to see a few of the properties I've sent him. I call him back and get his voice mail. When he doesn't return the call, I call him again the next day. Sunday I get an email from him, he tells me that when he called on Friday he had some free time and ended up calling another Broker who was now going to show him some property.

[insert profanity]

After months of working with Louie, he calls a broker at random because he gets my voice mail? Looking back I should have dropped him at this point. This was a warning sign that he didn't value my previous efforts to help him.

Instead, to later regret, I wrote him back telling him that I'd still like an opportunity at earning his business. I'm competitive and believe that adding the highest possible value to my clients experience will result in a customer (and source of referrals) for life. I doubled my efforts, taking time to map out custom bus routes for his wife from each property, the proximity to shopping, the many features that were required and preferred, hand selecting properties that were appropriate, and mailing him the results. There was no way another realtor would work this hard for a client.

About a week later, Louie flies in from California and we meet at a local coffee shop. He shows up (15 minutes late) with a buddy from college, not his wife.

Warning #2.

If he was serious, he should have brought his wife. She's a key participant in this process and (studies show) makes more than 50% of buying decisions when it comes to a home. Time is short in this situation and according to Louie, they will make a decision on short order. Yet she's not here, his college buddy is. The writing was on the wall. I forgot to read the walls.

After a short conversation about areas of Boulder and properties we're about to see, including possible pros and cons of each, we spend an afternoon looking at homes.

Now, at several points since our relationship began, I carefully explained to Louie that if there were other areas outside of Boulder that he'd like to see, I'd be glad to show him properties in those areas. Well, it didn't work out that way.

The next day I get a phone call. It's Louie. He asks for somebody else.

I say, "Louie? This is Osman."

He says he's dialed the wrong number (odd). Maybe it was his conscience pushing the buttons on his cellphone. Anyway, I ask him about where he is in the process and if he'd like to take next steps to put an offer on one of the houses he said he really liked. That's when he tells me that he's made the decision to purchase in a new development just outside Denver AND would be using another realtor. His wife was, in fact, out with that realtor at that very moment at a second showing.

Another realtor? Why? Did I drop the ball? Did I not go out of my way to add value?

It's not because he got bad service from me, certainly. I worked hard to raise the bar, to give him service well beyond the typical. He told me he benefited from my listing alerts, online resources, and custom research reports. The reason he ended up going with another realtor was because at the end of the day, that one random day, he got my voicemail when he was actively doing research.

I'm over it now, but would I have done things differently with this client? What are the lessons? What's the HBR case study conclusions?

1. Online lead generating systems are great because they provide excellent tools for a buyer doing their due diligence. It's easy for shoppers to browse listings and learn more about houses they are interested in. But, these systems don't build client/agent relationships. Lesson: To build relationships, one must connect well with clients. The best way to do that is to be attentive to a client's needs and demonstrate that attentiveness with solutions to their specific needs. Build the personal connection.

2. Not everybody will value or recognize your hard work. In an era of instantly available information, much can found with the click of a button. But there is also a ton of spam out there and the signal to noise ratio is low on the internet. Unfortunately, you can't expect every client to tell the difference between mass market advertising and custom high-end services. Lesson: Positioning the service is just as important as providing the service. To be successful, one must do both well.

3. The best clients recognize and respect the value of time (theirs and yours). They are extremely careful with how they choose to use time and thus how they will take yours. Recently I had a client from California fly in to spend the holidays with his family. Over the course of the past few months, I've snail mailed him many properties to look at as well as our quarterly research. While he was here in Boulder, I offered to take him around to see properties but he declined saying that he really wasn't quite ready yet (and that he didn't want to waste my time). Instead, using the listings I'd already sent him, he drove around to neighborhoods with his wife and vastly narrowed his search. Now this client knows that he's looking for a particular house in only two or maybe three small areas of Boulder. When ready, he'll let me know and we'll setup the showing appointments. Lesson: When qualifying prospects look for cues that a client values their own time. Most prospective clients are in a rush to "see some houses," but you as the seasoned professional should avoid showing clients property if they haven't made a decision on general location. If you want to avoid being a tour operator, it's better to buy them a cup of coffee, have a nice conversation, and give 'em a map.


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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

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