The Client-Relationship Challenge

Why the End Justifies the Means... There is a generally accepted principle that the cost of acquiring a new customer is five times the cost of retaining an existing one. O.K. -- so client retention should be a number one priority. Your clients are experiencing an increasing level of responsiveness, both on the corporate and personal level, as they get instant access to information with their stock brokerage firms, banks, travel agencies and technology providers. Why should their real estate portfolios be any different?

The realization that customer loyalty = customer relationship management = online transaction and portfolio management = we need a web platform for our real estate company is evident. That the Internet can strengthen relationships and enhance retention is no longer earth shattering news. That's why so many major brokerage and property management companies are contemplating buying web technology or building it themselves.

The challenge remains doing it right from the beginning. Your Internet strategy shouldn't detract from the client experience currently delivered via your company's traditional service delivery avenues. A fact contained in a recent Arthur Anderson/Rosen Consulting Group report on eReal Estate really hit this point home. "Charles Schwab employs more than 250 engineers and technicians responsible for their ebusiness site and data maintenance alone." Think about what this means. How many real estate providers are really planning for that kind of manpower just to maintain and update the client data contained on their fancy new extranets and transaction/portfolio management web sites? The math will quickly show that adding this kind of personnel expense will kill any projected near-term savings from increased efficiency when moving operations "virtually." So why bother?

Because client expectations will not be reduced just for the real estate industry because it is "too costly or too complex." The standard for customer service, data access and interpretation is being set by other industries. The few companies that correctly estimate the intensity of training of their people and how to analyze the collected data in a meaningful way for their clients will own the market a decade from now. Plan and budget for a higher level of web maintenance and upkeep today. Don't wait.

Note: For a copy of the Arthur Andersen report, go to www.arthurandersen.com. Skip the splash page! (Why do web designers do this?) Type "Virtual Certainty" into the Search box at the top of the page and click the Order Form at the top of the list.

--Eileen Circo