Customer loyalty is always something you strive for regardless of your industry, but it’s absolutely essential to your brand as a luxury real estate professional. The real estate industry relies and thrives on loyal clients for ongoing business and referrals. However, earning a client’s loyalty in luxury real estate goes beyond the closing appointment. More than ever, affluent clients expect their real estate professionals to go above and beyond to earn loyalty.
Barry Kirk, the Principal Consultant of Chapman & Co. Leadership Institute, discussed four types of loyalty between clients and real estate professionals in a recent episode of our “Estate of Mind” podcast. By understanding these types of loyalty and how they relate specifically to the luxury real estate market, you can expand your network and grow your business.
1. Inertia Loyalty: “I’m here because it’s too much trouble to go.”
Inertia loyalty is when clients choose to stay with your business not because they like it but because it’s convenient and there’s no other option available. For example, you’ve probably experienced inertia loyalty with your cable company or even an airline; you may not rave about the service, but you can’t be bothered to research other options (or maybe you don’t have any other choices). Likewise, clients who have inertia loyalty may simply not care enough about exploring other options to move on.
Inertia loyalty is the least desirable of the four types, and it draws no referrals for a real estate professional. These clients might express dissatisfaction with their friends and family, deterring them from your service altogether.
2. Mercenary Loyalty: “I’m loyal because you pay me to be loyal.”
Mercenary loyalty is also known as transactional loyalty, where it is more to do with the price of a product or service than the quality delivered. For example, a client may be loyal to a real estate professional because they offered a lower commission than the competition.
There’s nothing inherently wrong with having clients who demonstrate this type of loyalty, but it’s important to realize that the bar is low here. You may get some referrals from this type of client, but your competition could easily undercut based on your pricing or other financial matters.
Many luxury real estate professionals rely on mercenary loyalty early in their careers to build a customer base, and that’s perfectly fine. Over time, however, it’s important to look for more sustainable strategies.
3. True Loyalty: “My connection goes beyond the offer.”
One of the more lucrative types of loyalty to pursue in luxury real estate is true loyalty or loyalty of the experience, which occurs when you provide a service that exceeds expectations and differentiates you from the competition. Since the process of buying and selling a property is highly personal, you’ll retain clients better if you’re able to anticipate their needs and connect with them in a way that other professionals typically don’t.
Once you have established a personal connection with a client, they will naturally refer you to their friends and family every time the topic comes up. Either way, true loyalty sets a much higher bar than mercenary loyalty because it’s more difficult for your competition to duplicate that experience. As a result, the luxury real estate referrals you get from this type of loyalty will be sustainable for your business in the long run.
4. Cult Loyalty: “The brand reflects my personal identity.”
Cult loyalty is most known in the world of retail or entertainment; whether you’re obsessed with the latest skincare products or the newest artist, you’ve identified yourself with a specific brand. Cult loyalty is perhaps the most difficult to achieve in the luxury real estate industry. Real estate professionals are challenged to reflect on and incorporate their values into their work while building a human connection with clients. In theory, it might sound easy, but finding shared values with various personality traits and backgrounds requires time and commitment.
However, if done correctly, the real estate referrals you receive from these clients will help build a customer base that connects and thus perpetuates the cycle. These are people who will be clients for life.
Building Loyalty as a Luxury Real Estate Professional
As you can see, not all loyalty is the same in the luxury real estate market. You can genuinely differentiate yourself from other professionals by striving to achieve true loyalty and even cult loyalty among your clients. From there, you can enjoy a more successful career.
For more tips on creating loyalty in luxury real estate, check out this episode of the “Estate of Mind” podcast with Barry Kirk. For more ways to set yourself apart in this competitive industry, connect with us by becoming a Member of The Institute.