G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
What Consumers Like About You
Customer satisfation is an important part of your job. These tips will help take you a notch above satisfaction in the eyes of your clients.
August 1, 2007
Consumers like you. They really like you! In a 2004 benchmark survey by Quality Service Certification Inc. of San Juan Capistrano, Calif., more than 90 percent of buyers and 88 percent of sellers said they were either very satisfied or satisfied with the services provided by the real estate sales associate with whom they worked.
Those figures are mirrored in newer research. In the 2006 NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Home Sellers, 84 percent of consumers surveyed were very satisfied and 13 percent were somewhat satisfied with their practitioner’s knowledge of the purchase process. Just as critically, 83 percent and 12 percent respectively felt the same way about the practitioner’s honesty and integrity.
Since consumers in the NAR survey rated honesty and knowledge of the purchase process as the most critical factors when choosing a practitioner to represent them, the research demonstrates that most consumers are finding what they want and need when they work with a real estate professional.
But most doesn’t mean all. Consumers become aggravated when sales associates make them feel unimportant, fail to provide adequate guidance on pricing issues, and have trouble getting along with others, sometimes jeopardizing the transaction. And it’s the unhappy consumers, even if they’re a small percentage of your customer base, who can derail your success. Author Richard Buckingham (Customer Once, Client Forever, Kiplinger Books, 2001) estimates that dissatisfied customers tell 15 to 20 people about their bad experience.
To help you recognize what you’re doing right and where you’re falling short, REALTOR® Magazine went straight to the source. Here’s what consumers told us about the real estate practitioners they’ve worked with.
Are you Paying Attention?
One of the easiest ways to lose business is to make consumers feel that they’re not worth your time. Responsiveness was ranked as very important by 92 percent of home buyers and sellers in the NAR survey. Communication skills were ranked very important by 83 percent of consumers.
You’re busy, no doubt, but are you too busy to make each customer feel like the most important priority in your day? If so, you’ll end up with an Andrea Burns on your list of failed business relationships. Burns, a public relations manager in Denver, went into her first real estate purchase with the impression that real estate practitioners were aggressive salespeople who didn’t care about her needs or wants. A salesperson she met at an open house did nothing to dispel that notion.
“He thought I was small potatoes and didn’t take time to talk to me,” says Burns. “He gave me his card and went through the motions but didn’t come across as somebody I wanted to do business with. He was looking for somebody to buy right away.”
Friends referred Burns to another salesperson, who was “the complete opposite,” she says. “We probably looked at more than 40 homes over several months. I wasn’t in a hurry, and he didn’t push me. He had my best interests in mind.”
Working with her new agent, Burns joined the nearly 89 percent of buyers in the 2004 QSC survey who were pleased with their agent’s ability to provide advice based on their specific needs. “He made sure I wasn’t looking at things I shouldn’t be looking at,” she says. “He’d tell me, ‘You don’t want this house,’ or ‘This house has a problem with this.’ It was like shopping for a house with my big brother.” Buyers and sellers who responded to the 2006 NAR survey also ranked market knowledge (91 percent) and local area knowledge (78 percent) as very important.
Colleen Gelardi knows what it’s like to work with a salesperson who doesn’t seem interested. Gelardi and her husband, Mike, listed their Aurora, Ohio, home with a top producer, after which the home languished on the market. Gelardi believes the house didn’t get offers because the sales associate didn’t consider the sale important. “She sells a lot of very expensive houses, and we sold our old house for $100,000,” says Gelardi. “That was nothing for her. I don’t think she really cared to work too hard on it.”
When the listing expired, the Gelardis listed with another sales associate, who sold the home and helped the couple find a new, much more expensive home. The first salesperson “didn’t know we could afford a much bigger house and got mad at us when she learned we’d bought a pricier home through another salesperson,” says Gelardi. “It was like we should be calling and begging her, ‘Please help us buy our house.’ But she wasn’t helping us.”
The Gelardis’ second listing agent saw both transactions through to a happy ending. “I have nothing but good things to say about her,” she says. “She found us a new insurance agent who was able to reduce our insurance costs across the board. Our basement in the old house was bad, and she knew somebody who gave us a great price to fix it. Anything we needed, she knew somebody to help. She’s a great networker.”
Show Them the Money
Many consumers who were surveyed also reported dissatisfaction with their agents’ ability to set and negotiate home prices. Only 70 percent of buyers and sellers were very satisfied in their agent’s negotiating ability, according to the 2006 NAR survey. Similarly, only 76 percent in the QSC survey felt that their agent was very satisfactory at negotiating price.
In our interviews, we learned that consumer complaints run the gamut, from salespeople who aren’t aggressive enough in setting a home’s price to associates who fail to negotiate altogether.
Greg Borowski, a software project manager in Phoenix, has used the same salesperson for 10 transactions over 14 years and is very satisfied overall.
“I can always trust the deal will go through the way it’s supposed to. She’s very thorough, and she knows contracts inside and out,” he says. But when it comes to pricing, Borowski, who calls himself a semi-professional real estate investor, keeps his own counsel. When he and his partner, Jonathan Kenger, sold their Phoenix high-rise condo two years ago, his salesperson recommended a price based on comps, but Borowski’s gut told him it was too conservative. “It was a tight market, and prices were going up weekly,” he says. “We raised the price $20,000 over what she suggested and sold for full price in a week. Then we wondered whether we should’ve gone higher.”
Katherine L., an attorney in Oak Park, Ill., ran into an extreme example of inability to handle pricing and negotiation properly when she and her husband sold their condo and then bought a home. In each transaction, her sales associate failed the pricing test.
“Although she showed us comps on our condo, our salesperson never gave us advice on what price to list it at. She went with what we suggested,” says Katherine. The couple ended up reducing the price three times, always on their own initiative. “We’d ask, ‘Do you think we should do a price reduction?’ She’d say, ‘Well, probably.’ She wasn’t saying, ‘This unit came on the market for this amount, so to undercut it, you should go for this.’ We had to keep evaluating the market ourselves and trying to figure out where to price our home.”
On the buy side, the couple made an offer 15 percent below the “upper $600,000s” list price on a home that had been on the market for months. “The listing salesperson heard the dollar figure and flatly refused to show our offer to the sellers,” says Katherine. “I’m a lawyer, and I know that’s an ethical, if not a legal, violation.”
Her agent’s reaction to the “shouting match” over price was a disappointment to Katherine and her husband. “Our salesperson was quite alarmed and transmitted her feelings to us,” she says. After a pitched battle between the sales associates and their brokers, the offer was presented. But because there was so much animosity between the agents, the sellers asked to negotiate directly with Katherine and her husband. The parties eventually agreed on a price about 5 percent below the list price.
Katherine said she recognizes the changing market contributes to pricing difficulties. “The fact that it’s a buyer’s market now and that it switched so quickly has thrown everyone—buyers, sellers, and real estate practitioners—for a loop,” she says. Still, she doesn’t believe any of the practitioners in the transaction handled themselves well. “We needed an agent to help us negotiate price, and our agent couldn’t do that.”
Set Communication Expectations
How, when, and how often to communicate about the transaction are issues that can create another gap between consumer expectations and sales associate performance. Only 85 percent of buyers and 81 percent of sellers in the QSC survey were very satisfied with the quality and frequency of communication from their salesperson.
Amy R. listed her home in Chicago with a family friend, but that didn’t seem to make staying in touch any easier. The salesperson sometimes failed to call promptly after showings to provide feedback. When he did call, he still wasn’t really communicating. “He’d call and say, ‘We’re done with the showing,’ ” says Amy R. “But he wasn’t forthcoming with details. I’d have to ask him questions about how many people were there and what their comments were.”
That not only irritated Amy and her husband, but it also made them question the associate’s ability. “If he wasn’t giving us feedback, how was he marketing our place? How much was he following up with other associates after a showing if he didn’t call us?”
Poor communication as well as a breakdown in service also arose on the buy side. “He knew we wanted to move to the suburbs but that we had no idea where we wanted to go. Yet he wasn’t giving us any guidance at all,” says Amy. “He didn’t say, ‘I found some research you might find interesting about this suburb,’ or ‘I know people who live in this suburb.’ ”
Disappointed with their friend’s complacency, the couple began researching suburbs on their own. They settled on one southwest of Chicago and found a buyer’s rep there by driving through neighborhoods and seeing which salesperson’s signs were most common. They signed up for new-listing updates at her Web site—and the suburban salesperson demonstrated she knew how to communicate by promptly contacting them to arrange showings.
It was only after the couple did that legwork themselves that their Chicago agent offered to provide a referral to a suburban practitioner. “He didn’t tell us he knew anybody there until we’d contacted another salesperson,” says Amy.
Go From Like to Love
If you’re saying to yourself, “I’m a pro. I’d never let communication or negotiation problems come up,” congratulations. But don’t rest on your laurels. Even if you think you already provide great service, keeping quality up requires more than good skills and good intentions, says Larry D. Romito, president and CEO of QSC. To ensure consumers will love your service every time, you need to implement written service processes to follow in every transaction you do.
QSC program participants, for example, give clients a service guarantee that promises specific actions, from a written marketing plan for sellers to helping secure mortgage preapproval for buyers. The program also offers a way for consumers to evaluate participants’ service through a questionnaire sent by an independent research company. Results are compiled on the company’s site.
Although he was skeptical, Jeff Blahnik, ABR®, CRS®, co-owner of the 250-associate Five Star Real Estate in Grand Rapids, Mich., is now a believer in creating formal systems to track service. “When you tell people you’ll do these specific things, it forces you to raise your level of performance,” he says.
Another critical part of improving the consumer experience is developing a system for how and how quickly you respond when a customer is less than thrilled with service. At Rose and Womble Realty in Virginia Beach, Va., every customer concern goes right to the top. “We have nothing to sell but service,” says CEO Jim Rose.
That’s why when any office in the company receives a complaint, Rose immediately sends a personal letter to the individual, stating he’ll ensure the issue is resolved. He also contacts the department head or the brokerage office manager involved to be sure the customer is satisfied. “We review both sides of the problem. But even if consumers are wrong, they’re right,” says Rose.
To make sure problems don’t fall through the cracks, Rose has his administrative assistant add a reminder to his tickler file. That way, he remembers to follow up on the issues that haven’t been resolved within seven to 10 days.
The company also regularly surveys clients. Incentives for relocation employees and partners, such as mortgage loan officers, are determined by the results, says Terri Stickle, the company’s vice president of customer service.
Constantly fine tuning your service based on client feedback is equally critical in building customer satisfaction. Mechanisms such as customer surveys help ensure that your idea of good service matches what really matters to your customers. In addition to its Quality Service Certified program, which trains sales associates in customer service, Romito’s company maintains a Web site where consumers can review lists of certified agents and see ratings by past clients.
Still not sold on the benefit of a formal quality service program? Consider what it might do for your balance sheet. “Most clients who’ve been with us for a year or more are seeing reductions in their annual errors and omissions insurance premiums in the 10 percent to 30 percent range,” says Romito. One client company decreased its annual E&O premiums by a whopping 52 percent, he says.
Beyond cost savings and high satisfaction ratings, getting your service just right is what leads to the wow experience that keeps people coming back. “Sometimes real estate transactions aren’t fun, but this was a really fun process,” says Carol Jorgensen of Okemos, Mich., describing her experience in buying a second home. “There was no pressure at all, and our sales associate became like a friend.”
See, they really do like you.
Filisko is an attorney and freelance writer and lives in Chicago.
Free Customer Tracking
The NATIONAL ASSOCIATION OF REALTORS® offers brokers a free, Web-based customer satisfaction survey. After real estate brokerages register, NAR’s system automatically sends clients a thank-you e-mail (you can use a prewritten or customized version) that includes a link to a 17-question satisfaction survey. There’s a survey for sellers and one for buyers.
Clients’ responses are saved in a secure database; NAR analyzes the survey results and sends you both your clients’ responses and national and regional averages. For more information or to sign up, send an e-mail to email@example.com.
You’re Great — But Your Practices Aren’t
A new study from the Consumer Federation of America, a consumer advocacy group based in Washington, D.C., confirms what earlier studies have shown: Consumers—particularly those who’ve recently worked with a broker or salesperson—have a favorable view of you.
The CFA study showed that 68 percent of respondents and 73 percent of those who’d used a broker or salesperson recently viewed real estate practitioners and their practices favorably. An even higher percentage of those who’d used a broker or salesperson recently — 84 percent — viewed their own broker or salesperson favorably.
CFA surveyed about 2,000 people, including more than 500 who’d used the services of a real estate practitioner in the past five years.
CFA — which has been critical of real estate industry practices—says that if consumers better understood industry practices, they might not be so approving.
Only 36 percent of respondents (and 58 percent of those who had used a broker or salesperson in the past five years) said they were knowledgeable about “real estate agents and brokers and their consumer services.”
Questioned about specific practices that have been the subject of CFA protests for many years, consumers expressed disapproval. For example, the federation has been a vocal opponent of dual agency and what it views as lack of competition in pricing of real estate services. Here’s what respondents to CFA’s survey had to say on those topics — along with the NATIONAL ASSOCIATION OF REALTORS®’ take.
- Dual agency: A slight majority (52 percent) said they don’t believe that dual agents can effectively represent the financial interests of buyers and sellers, and 62 percent said there is a potential conflict of interest when the seller’s agent and the buyer’s agent are affiliated with the same company.
- NAR’s take: State law should determine what agency practices are allowable. Real estate practitioners should make timely and clear disclosure of their agency relationships, a belief shared by 82 percent of recent buyers and sellers in the CFA survey.
- Commission rates: Sixty-three percent of those who recently bought or sold said they believe a 5 percent or 6 percent commission on a $300,000 home is too high. The CFA survey didn’t cover other price points, but Executive Director Stephen Brobeck said, anecdotally, he’s seeing increasingly variable commission rates.
- NAR’s take: All commissions are negotiable.