"There are only two ways to grow a business - marketing and innovation. Everything else is a cost." (Peter Drucker)
The only real opportunity most of us have to gain competitive advantage and grow our business is in marketing - there is little opportunity elsewhere.
Technology and innovation are great, but are worthless unless you can communicate the advantages they bring to your potential clients via a sound marketing program.
In marketing there is enormous opportunity to leverage your efforts. It is the one place where you truly still have infinite leverage with almost no downside risk.
Everyone does some level of advertising or marketing - it could be sending letters, calling by phone or visiting in person existing clients or new potential clients, or even in the form of making a charitable donation that includes a journal advertisement.
Think about it for a moment . . .
Doesn't it cost exactly the same amount of money (and/or time/effort) to produce and/or place an ad, letter, etc., regardless of whether that ad or letter, etc., returns one response, ten responses, one hundred responses or one thousand responses?
When you bring in a new client, it costs you the very same amount of effort, time and expense whether the new client brought in by that ad or letter, etc., orders an appraisal once, once a month, once a week, once a day or ten times a day.
You must understand that you have now, and have always had, the ability as well as the responsibility to yourself and all of those who have latched their hopes and aspirations to your star to make every action, every opportunity, every cost you expend in advertising or marketing, every initiative you undertake to produce for your efforts to reap the maximum potential return on your investment of time and money with significantly multiplied results. Then, to have those results multiplied again and again by simply mastering how to apply easily acquired marketing skills as well as possibly altering the geometry of your practice.
The leverage inherent in marketing can allow you to become exponential in both thought and action.
Technology can certainly make you more effective, but only IF you have the work to which you can apply that technology. The real deal is learning how to effectively market yourself. Marketing can and will, in the long run set you free. The Appraiser does not exist who fully maximizes the real potential inherent in his/her client base.
YOUR GREATEST ASSET - YOUR CLIENTS!!
Most appraisers spend most of their marketing/advertising money, time and effort chasing after elusive new clients, while they essentially ignore their faithful client base. Sometimes new marketing efforts directed at strangers will inadvertently find their way (sometimes with a little help from your wonderful competitors) to your clients. You should always consider the "what if my best client were to see this" scenario before you launch a new effort.
Your best prospects are your existing clients. You can secure and enhance your existing client relationships in several simple ways. Keep in touch with your clients on a regular basis. Whenever possible, establish a personal relationship with the person(s) most responsible for selection and ongoing assignment of appraisal orders to appraisers. Everyone wants to be made to feel that they are special and that you might consider taking a special interest in seeing to your clients needs whenever & wherever it is ethically possible.
Call your clients on a regular basis to apprise them of any potential problems (for both problems concerning ongoing assignments as well as general problems looming in the marketplace), ask what additional services you could incorporate to make their job easier. Take them to lunch. Teach them (if appropriate) the principles and philosophies to market their business.
Everything I will teach you about marketing, as well as the knowledge I have acquired in my own experience testing these principles and whatever you successfully develop in learning to implement, is quite likely to be equally applicable to marketing your clients businesses or professional practices in some way.
Consider making sales/marketing presentations to your clients, both one on one marketing consultations as well as presentations to sales people at company sales meetings for generating referral business, writing effective sales letters etc.
Let your clients know that you are genuinely concerned about their success. Make sure they know that you value the trust and faith they have placed in you. Be honest with your clients. Most people prefer to do business with ethical people they can trust.
If you don't already use contact management software, get one and begin using it as soon as possible. I used to use and recommended Maximizer, but Outlook, ACT & Goldmine are also good choices. There are probably many other good choices available. A few years ago, I switched to Outlook (I am nearing retirement and winding down...)
Get all your existing recurring user clients entered as quickly as possible. Set them up as separate databases by client type. Concentrate first on those clients who have the most potential for increased business. These are generally in two categories. Large operations that give you a fraction of its business and small operations that give you all or much of their business. Both types are excellent candidates for expansion.
You must run your appraisal business as you would expect to be treated if you were the client. You must constantly strive to find ways to improve your treatment and enhance the effectiveness you bring to your clients. They will respond to you through the most important vote of all, increased appraisal fees. Guard against mediocrity in every phase of your practice, particularly in the areas of client service and sales or marketing efforts. These two functions form the basis of every company and will serve to separate the marginal companies from those which are quite successful.
The quality of your work product is also important and must be maintained at consistently high levels. Before I became involved with Jay Abraham (my marketing guru), I always thought that our high quality work was the key to our success. We had always prided ourselves on "well above average quality" when compared with many of our peers. We always included extra comparable sales, interior photos (long before they became a client requirement) and a consistent mind set to always exceed, not just meet industry guidelines on every assignment.
I always endeavor to under promise and over deliver.
I learned from my clients using a survey form that although consistent quality of the work product was important, it was service oriented enhancements that really rang their bell & fosters a tremendous degree of client loyalty.
I can't stress strongly enough the importance of ongoing communication with your clients. In person is best, but telephone is almost as good.
One of the most powerful commitments you can make to help you grow your practice is to help your clients to grow their business or professional practice. If you use a newsletter, include a marketing column. When you write letters to your clients, add marketing tips, whenever you feel it would be appropriate. Be on the lookout for your client's advertising and/or marketing materials. When you see that they are doing something that is ineffective, suggest how they might handle it better (ie: an ad with no headline or using the name of the company as the headline, or the use of technical features instead of "what's in it for me" benefits.
What you will learn from me about marketing is equally applicable to your clients, or anyone else's for that matter... [hint - spouse, friend or relatives] business or professional practice]). In many instances, you will have a much better opportunity to grow your practice by teaching your best clients how to grow theirs, than you will ever have to grow yours by bringing in new "volume" clients. This works best with small clients who almost always welcome help in growing their business or practice.
Another viable avenue to expand your practice is to market to your former clients who no longer use your services. Just like your current clients, your past clients already know you and know your capabilities. Your clients do not always stop doing business with you for the reasons you may think.
There are typically two principal reasons why clients stop using your services.
Something happens to the client or his/her business (which may have absolutely nothing to do with you or your company) that causes them to cease using your services for a short period of time. They become accustomed to the interruption and simply just never start up again.
The second scenario involves some type of an unpleasant experience (in the client's eyes) involving you or your company. It is very likely that any clients you have lost fit into one of the two categories.
Why leave this easy money on the table? Why not at least try to get these former clients back into the fold? You must first come to the realization that you and your services are really just a small segment of your client's life.
Clients may stop utilizing your services for many legitimate reasons:
- their method of doing business changes for reasons beyond their control, such as a corporate shift to AMC's;
- they experience a change in economics;
- they go on vacation;
- they get sick;
- they get sucked into another appraisers offer for whatever...
The point is, that something happened to change your clients mind about using you, at least temporarily. Most appraisers when faced with a situation in which a client stops using them either just forget about them altogether or make a really half-hearted attempt to re-establish the relationship.
The first thing you must do is decide whether they are worth the effort to re-establish as an active client. Look at their billing record. What were they worth to you when they were active? What could they be worth to you in the future? Look at them as an income stream and cap them at an appropriate rate. Sometimes, due to excessive pressure to "make numbers" or "soften repair requirements" or low fees or other problems, they simply may not be worth the effort. But, more often than not, they are.
A key realization is simply to understand that a number of your inactive clients ceased to use your services temporarily and it is your responsibility to prevent that temporary interruption from becoming permanent. Irregardless of the reason for the interruption in utilization of your services by the client, after a relatively short period of time, they begin to become prone to inertia and get stuck in their now current status quo.
Whenever possible, go see the key decision maker in person. Calling them is far less effective than a personal visit, but sometimes is necessary due to physical location or time constraints. Writing to them is probably better than doing nothing (barely) and should be avoided unless you are unwilling to make more of an effort. Even delegating it to someone else is probably better than just writing to them, but hey, I can only lead you to the water, so to speak. You must make yourself drink! Did you cap their potential income stream yet? That is something that could be quite useful to use on yourself to help motivate you to make the effort to do it right.
Once you begin to communicate with your former client, job one is to impress upon them that you are truly concerned about them. You haven't heard from them in some time & you want to make sure that everything is okay. If there is any problem, let them know that you care about them & and you want to know if there is anything you can do to help out.
This approach will typically attract their attention, since they are not likely to have given much thought about whether anyone is worried about them. Maybe you really should be worried, unless the client's circumstances have changed beyond their control (ie: national corporate decision to go to AMC's), because you should concern yourself with the reason why they used to utilize you, but no longer do so. This should definitely not be viewed as a normal ebb & flow of business.
You must look at this as a red flag! And realize that something is wrong. Unfortunately, in our profession, losing a client is caused by things we can never control and yet remain ethical. Undoubtedly, you will lose clients because you can't consistently "make the numbers" they desire. There is little you can do in that type of scenario other than to educate the key decision makers to the process & show them why you cannot ethically accommodate them.
Another strategy might be to go well over the head of the loan officer - maybe there is someone higher up with scruples who can rescue you. The main point is, however, that there is a myriad of other potential reasons that you will never discover if you don't ask. Things like an arrogant or abusive employee, a lost or excessively delayed assignment that you may not have even been aware of, untrue adverse information about you or your firm provided to your client via a competitor etc., etc.
At this point, it becomes crucial to determine whether the problem was caused by: (a) you or someone in your organization; or (b) something in your former client's situation that had nothing to do with you or your firm.
In either possibility, you must now try to identify and help the client solve the problem. Don't you want to be more than just someone who takes the client's money? You might consider adopting a mind-set that your purpose is to be your client's best ally; their greatest asset; their most trusted friend.
OK, you have made contact and expressed your concern that something may be wrong. You should now say (in your own words - of course) something like...
"Perhaps we have done something that either offended, disappointed or inconvenienced you. If we have in any way let you down, I really want to know about it. I would like to have an opportunity to make it right for you. I would like to ensure that something of that nature never happens again to you or anyone else" Then assure them that your intentions & desires have always been to serve their needs and provide the highest possible level of satisfaction and quality of work product. Tell them that if you have failed them in any way you will not tolerate the situation and must "right the wrong".
This approach, particularly when delivered in person is disarmingly simple, yet extremely powerful, and has an incredible impact on many, if not most people. They will often realize that they stopped utilizing your services without any real justification and will be likely to resume using your services.
If you find out that they stopped using you for cause, listen attentively to their tale of woe and be sincere when you tell them that you only wish that you had been brought into the situation at the time, so that you would have been able to correct it and set up a procedure to short circuit that type of situation from recurring (assuming of course you could and would want to do so. I am certainly not trying to tell you to bend your ethical conduct or do anything you find imprudent - you are probably better off losing clients that cause problems in those areas).
Then continue with something like this:
" This of course does not make up for the disservice and/ or disappointment that was unfortunately inflicted upon you. With your permission I would like to try to make up for the inconvenience etc..."
Then simply do whatever seems appropriate for the situation ie: refund the fee, offer a "free appraisal" give a discount or credit... whatever seems to make sense or you think might fly. Say
"I know there is no way I can make up for your past disappointment, but I hope this will help to show that we really appreciate your business. And even if you choose to never, ever do business with my firm again, it is crucially important to me that you can say to anyone that the last experience you had with us was positive and satisfactory."
Most people when approached with honesty will quickly succumb to your sincere expression to rectify the situation. This approach is used successfully by many, yours truly included, with astounding results.
Conclusion:
The most predominant reason for clients becoming inactive is due to lack of ongoing frequent meaningful communication on the part of the appraiser. You must make a habit of calling and seeing (in person when applicable) your clients, particularly your best clients on a regular basis.
Give them ideas they can use; any information that would be of value. Ask them what would benefit them most. Maybe they would appreciate real estate articles cut out & copied or MILS statistical printouts etc., etc.
If you stay in contact with your clients on a regular ongoing basis, you can easily nip problems in the bud before they escalate out of control.
Above All Else - Implement!!!
AUTHOR: Ken Rossman - NY Certified General Appraiser Serving Long Island for 35 years -www.eappraiser.ws - Residential, commercial, industrial, and warehouse appraisal services. Forensic and litigation real estate appraisal specialist for plaintiffs or defendants. 2953 Kinloch Road, Wantagh, New York 11793 Phone: 800-491-6380 - Fax: 800-517-1296 - kenr@optonline.net
Recent Comments