Thursday, December 29, 2011

Ideas for real estate agents

I've lived at four different addresses since I moved to New York City a decade ago. I suspect that moving every two to three years in New York City is pretty typical, or at least within one standard deviation of the norm.

What strikes me is that I've used a real estate broker for each of my four moves and that none of them ever contacted me after the move. Some ideas for real estate agents:

1) I imagine that customer acquisition cost is a significant fraction of your total expenses. That is the main function of a real estate office, after all. It would probably be cheaper to retain past customers than to acquire new ones. Ways to do this:
- Follow up with a phone call a month after the renter moves in to a new apartment - how did the move go? Is everything working? Happy with the new place?
- Send a personal holiday card
- Send out a periodic email, not so frequently to be annoying, but often enough so that you stay on the renter's radar screen. Probably once a quarter would be ideal. You could say, "Over the past three months I've helped __ families move into the neighborhood; I'm currently showing the following apartments at the following rates. If you know anyone moving in to the area who needs help finding a place, I'd be glad to help them out." Include a link to your website.
- Give something of interest / value: Include in that periodic email an update on rental prices and sale prices in my neighborhood. Many people who rent in our neighborhood might be thinking about buying a place eventually. If they got an email from you once a quarter with prices, who do you think they would call first when they do decide to buy?

From time to time I'll see an email on one of the alumni lists that I subscribe to, from someone looking to move to New York City. If I got contacted regularly by an agent, I'd connect the two of them.

- Build relationships with other real estate brokers in other parts of the city. If one of your past customers decides to move to lower Manhattan, you could be the one to put them in touch with a trusted broker there.

Transform your thinking about the job from a transaction-based role to a relationship-based role. Think about lifetime customer value. How many more times in the future might that customer need to move and use your services?

2) A much broader area of opportunity is moving beyond the narrow role of real estate broker to be a broker of relationships in the community. When someone moves into the area, there are a lot more things the person needs beyond a house or apartment:
+ Car mechanic
+ Pediatrician
+ Dentist
+ Accountant
+ Attorney
+ Financial advisor
+ Insurance
+ Babysitter
+ Connection to the local political establishment
+ Advice on schools
+ Handyman
+ Party rental space

Reviews on the Internet may eventually cover these categories in a comprehensive way, but I suspect that is still several years off. In the meantime, we'll still turn to our neighbors and friends for referrals to people they trust. Real estate brokers could play that role of connector.

I'm not sure what the best business model is. Should brokers give the referrals for free, hoping that referrals come back? Should there be an explicit commission?

3) Groupon and similar sites have demonstrated the power of highly targeted local advertising. Real estate agents could curate and offer to past customers deals that are tailored to their situations. The value to the businesses is that the deals could be hidden from the market, made exclusive to these customers, and so not impact their regular prices.

This option could be managed by a third party, and I can imagine someone building a business based on real estate agent customer lists.

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