Do You Focus on Acquiring New Clients or Retaining Existing Clients?
Acquiring new business and clients along with retaining existing clients are equally important in running a real estate investing business. For the moment, let’s take the acquisition of a new client out of the picture. Of course you need to market to procure new buyers, sellers and lenders. However, I’m willing to bet that you’re not as focused on the retention of your existing clients as you could be.
If you are a real estate investor, you may say, “I don’t have repeat clients; a seller is only going to sell a property to me once.” I agree, obviously they are only going to sell to you once, but you can use them as an advocate for your company or a referral source. They may know someone else who is willing to sell you a property. Additionally, the seller might be a real estate agent—you need to retain your relationship with them so that they send more deals to you. Or maybe it’s a wholesaler who will send you more deals.
It’s a lot cheaper to retain a client than it is to acquire a new client. Those of you who are doing real estate deals on a large scale probably know how much it costs you to acquire a new buyer, or find a new property to purchase. From my experience, it’s about $3000 in marketing costs. It’s going to be a lot cheaper to retain a client or getting a referral by taking good care of your people.
Let’s say you are a wholesaler and you want to do more deals with buyers.Start by surveying them—find out what was good and bad about your sales process to them and learn about what they want and what they can help you improve and grow on. They can help you to better help them (by finding the exact deals they want).
Lets use a contractor as another example. Good contractors are hard to find and when you do find good ones, you should hold on to them. Maybe they are a little more expensive than someone new, but you don’t have to take the man hours to find them or spend the money to train new ones over and over.
I would stress spending the time and money to retain employees, vendors, lenders, realtors, buyers, sellers and contractors. Put a lot of focus on working with them and helping them grow. You have to find new deals—that’s imperative BUT make sure you are spending time and part of your marketing budget on retention.