Another Key to Your Real Estate Sales Business Profitability

In 2018, Brittany and I had sold 143 units for $36M and made $1,049,931 in revenue with a ~70% profit margin. It was our third year in real estate sales. 

Since we were newer to Jacksonville (relocated from Northern Virginia in 2014), we only had a 180 person database, but due to our touch program and the level of service we provided during the transaction, we received 80 referrals that year. 

Customer Touch Program.

Our original written customer touch program implemented was only 41 touches, but by the end of the year, it expanded to more than 100 touches, including client appreciation events, emails, phone calls, mailers, texts, giveaways, and holiday pop-bys. You name it, we did it.

Being a past customer of ours started to feel like its own VIP club that you would get access to through working with The Brooks Group. People wanted to be a part of it. This was intentional and we started to notice that the business was starting to feed itself.

Pre-Release Premier of The Lion King for our Past Clients! 

Past customers of ours made sure other people knew about our team whenever they heard others were buying or selling. They would then send their contact information our way (yes, we would even teach our database HOW to give us referrals).

We even had people find us on social media and send us direct messages asking if we were available to meet and work with them. 

It was a salesperson's dream. 

The Math.

A traditional database, from what we understood, would receive a 10% referral rate (10% x the number of people in the database).

So if you have 100 people in your database, you would receive 10 referrals each year.

If you have 200 people in your database, you would receive 20 referrals each year.

The math was simple and easy to understand. 

Now, to me, 200 people in a database doesn't seem so outrageous to reach, especially for someone who signs up to be a salesperson, with the general understanding that you have conversations with people constantly to grow your business.  

Doing the math simply here: If you close 20 sales (200 person database @ 10% referral rate) at an average $375,000 sales price and a 2.75% commission, you are earning more than $200,000 in revenue. 

Want to double that? Get 400 people in your database. OR you can simply improve your customer touch program to increase your current database yield from let's say 10% to 20%, or even 30%+ (like we did). 

Consequences of Growing Your Database.

The best part about our client touch program driving our business was that we were able to start turning off our expensive online leads. Our online leads had a profit margin of less than 50% and required much more time investment. Think about making phone calls, qualifying the leads, and serving the customers — who were often buyers — and who traditionally require 4x more time spent than our seller customers. The stress of the overhead expenses didn't help either.

The decision to wean ourselves off of online leads was right for us and our lifestyle (with a baby on the way). 

At the end of the year, we realized very quickly that the most profitable AND fun lead we could generate is a referral. So we spent the majority of our energy there, and it has paid off tremendously for us. 

Our business grew tremendously when we developed deeper relationships with our past customers and executed on a powerhouse touch program. You can do it too!

Your profit margin matters. Your time matters.

We know how to do it and can help you do it too. 

At Momentum Realty, we help agents facilitate their customer touch program, by providing a complimentary email campaign (all branded toward and for the agent), which they can also turn it into a mailing campaign. We also provide the Lolo Platform which is a monthly gift subscription for your database from small local businesses in the area based on where your buyer or seller lives. Further, we have a marketing assistant available daily for you to assist you with designing your marketing materials.

Just these few extra touches and resources have helped agents execute their touch program and expand the number of referrals they receive. Of course, the agent still has to provide great service and do the other touches, but taking a lot of the creative time off their plate really helps.

For more information about Momentum Realty, visit movewithmomentum.com and check out our 100% commission model and see why Momentum's agent headcount has already increased by more than 30% in 2024 alone and why our volume is up 57% YoY in July 2024. jon@movewithmomentum.com