This Is How Contracts Betray You
This Is How Contracts Betray You
Agents often ask clients to sign a contract at the beginning of the relationship. From the customer’s perspective, it says, “You’re stuck with me. Even if you hate the experience, you’ll end up paying me if you buy a home in the next year. So just use me.” Now, while the public may not get it, I do. The contract is a safeguard against the buyers who spend 17 weekends of an agent’s time looking at every house in the area only to decide to show up at a builder’s model home without the agent and cut them out of the deal at the last minute. It is incredibly frustrating when customers are more loyal to their profit motive than to the agent who has invested so much time helping them find their dream home.
“Make a customer, not a sale."
—Katherine Barchetti, author
While I do understand the agent’s motive, I don’t think customers should be sticking by them just because a contract says they have to. Wouldn’t it be far better if clients were loyal because they’re getting such great service and they really believe they will miss out if they cut their agent from the deal?
Fear drives customers to what I call “have to” situations. Think of how most of us talk about dental appointments. I don’t know about you, but when I’m on my way in for a cleaning or X-ray, I say that I “have to” go to the dentist. I do it begrudgingly because I’m afraid all of my teeth will fall out of my face if I don’t.
If we create an environment of fear, customers feel they have to stay with us. On the flip side, love and certainty motivate customers in a “want to” situation. If we create an environment of love, they stay because they feel genuinely loyal to us and believe they will get something with us that they can't get anywhere else.
As brokers, take these two simple steps to create a “want to” culture with clients.
1. Teach agents to make customers feel important first.
Agents should focus first and foremost on giving their clients an unbeatable experience. Every step of the buying process should be as positive as possible. One thing that deflates our arrogance faster than the 2007 housing bubble is remembering the economy is always, always, always cyclical. We may have buyers lining up at our door one season but have to struggle to stay in business during a housing bust the next. In a hot market, agents might feel like they can get away with less. But as a broker you must teach them they should always treat people right. Take the Mary Kay approach and pretend all customers have signs around their neck saying, “Make me feel important.”
2. Throw out the contracts.
Stay with me, here. I know it’s extreme (and it only works when you’ve accomplished the first step), but if you want to take this idea seriously, you’ll throw out the contracts altogether. That’s what we’ve done at FPG: Clients can fire us at anytime with no penalty. Instead of getting the biggest, baddest attorneys to draw up ironclad contracts, we strive to run our businesses in a way that makes clients want to stay with us. It pushes us, too, because we have skin in the game. We work our butts off to provide so much value that clients justify the expense, knowing our service is worth more than they pay. If we’re not making ourselves impossible to leave, it’s our own fault.
Trapping buyers into doing the right thing is no way to build trust. Convincing your agents to do the simple things that will make your customers want to stay may require a little extra effort from the entire brokerage. And of course, you will get burned eventually. But when you focus on building loyalty, looking for opportunities to provide a standout experience, and making customers feel like gold, they will return the sentiment more often than not.