Are you handling your clients like a phone company handles customers?
About five years ago, I was working with a buyer who was considering building in a prestigious golf course community in west Austin. My business partners and I had already taken a number of people to the community, as it is pretty unique. In fact, here is a photo of a home we recently sold in the same area ------------------->
My buyer was a high-risk obstetrician looking to retire from the Omaha area after only 10 years in business. He came to look at some golf course lots and made a choice with the sales rep. We did a "hold" on the lots (two lots which were side-by-side next to one of the greens).
A couple of days later, I received a promotional email from the developer and the agent specifying that they were going to pay 6% (rather than 3%) on any lots "sold by August 31st". Needless to say, I was excited, because ours would close during that timeframe. I later spoke with the developer (who was also the proposed builder for the home thanks to my strong referral) and he said that the lots we sold would not qualify for the bonus. In other words, we were PUNISHED for selling them 48 hours earlier than the email promo. At a cost of $360,000, this was a $10,800 slap in the face. Even though our buyer was later forced to choose two different lots because of an easement issue, they wouldn't honor the bonus for us.
During our conversation, he also told us that the buyer was planning to build a smaller home, which was true at the time. He said, "If they build a bigger home, I will pay you a bonus on the construction of the house itself." Well, they built a VERY large home after all - it turned out to be around 5500 s.f. or so, yet he paid NO bonus.
I later told his salesperson that I thought the builder was a good businessman until that happened. I also told him that I thought he was a better long-term thinker than that, as we would have the opportunity to bring many millions of dollars in sales to him, yet he treated us badly and disreputably. I have forgiven the man, but I have also never taken another buyer to him, nor will I. And as I told his rep in 2002, we have directed many custom home buyers to better places to conduct business. It just doesn't seem like I am being a good steward of my time and effort to work with him again.
The last time I bought a new phone (TREO 650) was about 2.5 years ago, when they were very new on the market. I thought about upgrading to a 700, or perhaps to a different model. I had seen an ad about the low pricing offered by Sprint, which has been my carrier for about 10 years now. When I called, they explained that the low price was ONLY for new customers, not for those with existing Sprint accounts.
So, let me get this straight - I have paid thousands upon thousands of dollars already to you guys, but I must pay three times the cost that Joe Off-the-Street will pay? How does that help with customer retention and loyalty? That strikes me as the equivalent of telling a past real estate client that they must pay the going rate, even though I am charging any new clients 1/3 of my normal rate. Take that, Loyal Client!
I guess my point in writing this is to consider what loyalty is worth, and what you are willing to sacrifice for the promise of future business. Many times, I have given up a bit of money to help make a deal work (repairs, etc.) because MY CLIENTS ARE IMPORTANT TO ME. I also know that after the closing, each past client represents the potential for several future deals. Treat people well and they will return to you. It works!
Copyright 2007 Austin Real Estate