If there’s one thing that 22 years in real estate taught me it’s that strong relationships are profitable. Whenever I appraised a property for a friend or previous client I knew I was an odds-on favourite to walk out with the listing. The better I knew the people the more likely I was to win the business—and usually at a better price and a higher commission than if I was just one of three.
My experience is by no means unique. Agents know that working with repeat and referral clients produces faster sales, with fewer problems and at higher commission levels.
For that reason, it’s in everyone’s interest to help sales people to develop the size and quality of their referral network. As a collective, these networks are a business asset that will make your agency more profitable. But how can this be done without exposing yourself to having business walk out the door when a sales rep or property manager leaves? That’s what I plan to explain in the paragraphs that follow.
One of the most powerful ways to build and maintain business relationships is through well-managed email and social media marketing programmes. Although they’ll never replace face-to-face contact, they keep you in touch with people during those periods when people aren’t thinking of buying or selling. As a result they become a key resource in generating positive word of mouth and repeat business.
To make email marketing work requires effort! Everyone in the agency needs to be involved if you’re going to build a database of email contacts. Smart agencies require their employees to store email contacts in a company-owned customer relationship management (CRM) package. Contact details stored in this manner—or, for that matter, in an Outlook contacts database on a company server—become the property of the agency.
Things get blurry when a contact database is used to build a network of online contacts on LinkedIn or social networking sites such as Facebook and Twitter. Most of these platforms provide functionality that allows users to upload a copy of their database to identify contacts who are already on the network. Using this functionality, an individual can connect with tens, if not hundreds, of people in a very short space of time.
While it’s in the agencies interest to help the individual connect with people in new and more interesting ways, doing so uses confidential contact information in a way that shifts the relationship onto a platform over which the agency has no control. Inevitably, this can and does lead to tensions in the employment relationship.
In the UK, for example, a court recently ordered that a previous employee hand over a copy of his LinkedIn contacts database and reveal details of any communication that had taken place between the ex-employee and clients of his previous employer.
But resorting to legal action is rarely productive. It indicates a failure to spell out guidelines and policies during the recruitment process. Without clear policies, an environment of distrust is usually inevitable.
The alternate is to implement a policy that gets everyone on the same side of the negotiating table and gives employees a reason to be personally invested in building their own database.
Here’s a starting point for just such a policy.
- Personal contact records brought to the business by the employee at the commencement of their employment remain the property of the employee. Aside from copies of records required to be used for the purpose of serving the customer in some form of ongoing capacity they are to be removed from the server if the employee leaves.
- Before importing any records into the CRM the sales person must provide evidence that they have obtained the consent of the individuals on the database to be sent email marketing messages. If it’s impractical or impossible to provide such evidence the employee should sign a declaration that they have obtained each person’s consent. If the employee is unwilling to provide such a declaration then the records should not be imported. This will ensure that the agency reduces the likelihood of incurring penalties for breaching the Spam Act by sending out unsolicited commercial emails.
- Contact records added to the database during the course of the employment become the property of both the employer and the employee. The employee may retain a copy of their database on termination of their employment. This will require amending the agency’s privacy statement to inform people that a copy of their records may be transferred to the employee in the event of them leaving. If changes are made, it would be wise to advise existing database contacts of the change to allow them the opportunity to unsubscribe from the database. It’s important that these contact records not be included in any future export.
- Existing contact records held by the agency (‘orphan’ records attached to previous employees) can only be used for the purpose of email communication and should not be copied and exported to a social networking site for the purpose of building a personal network.
- For agencies who have a rent roll, make it clear that rent roll client records are deemed to be confidential information. The relationship with these clients should be protected by a specific non-compete clause in your employment agreement that prohibits solicitation if the employment relationship is terminated.
By clarifying these issues in a clear policy document you’ll go a long way to building a powerful network of networks that will generate more repeat and referral income.
If you have any further suggestions to add to this framework, please post it as a comment.
Image by James Offer via Flickr.