It’s what you’ve worked so hard for. It’s why you market your business. It’s why you nurture that lead to land that client. And then the transaction is complete and you get your $10,000 commission check and you think to yourself, “Thank you Mrs. $10,000 client!”
But I want you to think again. And this time, think bigger.
The check in your hand isn’t the true value of your client. And that transaction isn’t the end of the story. There are variables you should take into account before assigning a value to your client. Variables such as age, average time in a home and referral opportunities.
Transactional thinking is short term mindset. And while the idea of nurturing “relationships” is hardly new in real estate, I want to put hard numbers to the soft concept of the value of a client. Namely, the lifetime value (LTV) of your client.
And we built an LTV calculator calculator to help you explore this.
Mark Slade, a Keller Williams agent in Maplewood, New Jersey, has also done the math and knows the numbers don’t support a transactional strategy.
“Having recently done an analysis of my business, I find that repeats and referrals are a critical source of income in a very positive way,” he said.
Mark calculates that each buying client offers a 40% chance of a referral, and for listing clients, that potential is even higher. He tried out our LTV calculator and felt it was right on the money.
“I love the tool,” he told us. Because repeat clients are less expensive to close and they are each a channel to referrals.
At Adwerx, we talk about using brand awareness to stay top of mind for that moment when new clients are ready to call an agent, but that’s true for past clients as well. You already converted them once. Don’t let the lead go cold.
Alison Domnas of 501 Realty in Durham, NC gets it. “My ‘million dollar’ client didn’t buy a ‘million dollar’ house,” she said. “She bought a $100,000 house. But she brought me so much referred business, she became my million dollar client. And I treat her that way.”
And that’s the crux of this calculator tool: it will change the way you treat your clients. It will affect just about everything: from how you market yourself to how you market listings. From how you show your gratitude for the sale to how you follow up a year later.
Try our LTV Calculator tool and see how the results change how you view your clients.