Why You Should Make Over Your Traditional Database into a Smart Database
As an agent, you have a database, but is it smart?
A smart database is one that lets you have planned and meaningful communications with clients and potential clients and build relationships with them over time. Smart databases are a more sophisticated, built-out type of database that facilitates relationship building, making it easier for agents to focus on generating repeat and referral business.
Businesses that embrace smart databases rise to the top. They know how to appeal to customers better than others because they’ve taken the time to establish and cultivate personal relationships, creating loyal clients along the way.
The Value of Smart Databases
Building a business around a smart database means you can reliably generate income. According to Keller Williams co-founder and executive chairman Gary Keller and KW VP of Learning Jay Papasan, these relationships developed by using a smart database are the very foundation of thriving, “smart” businesses.
“The pandemic really exposed the difference between a business and a smart business,” says Papasan. A smart business, he adds, is built around a smart database.
As leaders with decades of experience forging close connections within the real estate industry, Keller and Papasan know how to create databases that ensure successful and sustainable businesses at the highest levels. Here, they share the considerations and steps agents should take in order to sharpen up their own databases.
5 Steps to Establish a Smart Database
Creating a healthy database is a process that takes both time and patience. Smart business owners know that growing and nourishing their database on a daily basis is paramount.
“Getting a sale today is incidental to me,” Keller says. “I’m feeding my database and connecting with my database. What I’m really working for is the massive payoff of tomorrow. You have to be there in the moment when someone makes a decision.”
Keller and Papasan recommend the following steps to setting up a smart database:
1) Start with your income goal. Then work backward from the goal you’ve set to determine how many people you need to have in your database, assuming that you get repeat and referral business from them. Add to your database over time by prospecting and marketing.
Here are a few equations to get you started:
1. Goal GCI ÷ Average Commission = # of Deals Needed
2. # of Deals Needed ÷ Opportunity for Conversion (6.37%) = Minimum # of Contacts Needed in Your Database
3. Minimum # of Contacts ÷ Your Conversion Rate = Expected # of Contacts Needed in Your Database
2) Make it personal. Reach out to the people in your database in ways and with topics that appeal to and are relevant to them. Personalize your communications. For example, share a customized market report with those in your database on the first of the month.
3) Reach out often. Keep in regular touch with the people in your database through frequent and consistent touch points, including phone calls, emails, events, or by offering items of value. If you only do one thing, call each person in the center of your database four times a year. Papasan calls these “care calls.” More effective, however, would be a 36 Touch plan, which would include four calls, 26 emails or direct mail (for example, sending a monthly market report, a happy birthday note, or a reminder to clean the gutters), two events (during COVID-19, this could be a virtual happy hour), and providing four items of value.
4) Regularly update information. Keep your database and all of the contact information in it that you’ve gathered up to date.
5) Leverage technology. Staying top-of-mind with your clients means touching your database frequently and purposefully. This may sound difficult, but by leaving the logistics up to technology, agents can do what they do best: build meaningful relationships. Tools such as Command’s SmartPlans can give agents back valuable time by automating listing checklists, marketing touchpoints, and drip campaigns.
The Three Levels of a Smart Database
Keller and Papasan outline the anatomy of a smart database, detailing three different levels. Levels one and two are more basic, while businesses that build their way up to the third level find that they’re able to more efficiently reach and engage their entire database.
“I think real estate agents would be surprised at how few [people] you actually have to have in a database when you have a meaningful relationship with them,” Keller says.Agents should have a firm understanding of the three levels of a smart database so they can properly gauge which level they’ve reached, and then figure out what action steps they need to take to achieve a level-three database.
1) Level 1 – Essential. You’ve input a customer’s name, contact information, and the type of business you’ve done with them in the past.
2) Level 2 – Effective. You’ve asked the customer for permission to contact them again. You’ve gathered their personal information and preferences, adding details like their birthday and their kids’ names and ages that facilitate personal conversations, which get a better response. You’ve grouped them with similar customers. Then you’ve used the information that you’ve gathered to have purposeful and consistent communication with customers that’s relevant to their likes or dislikes, personal interests, and past interactions with you.
3) Level 3 – Exceptional. This level builds on levels one and two. An exceptional database contains triggers that let you automate communication. For example, this could be a note in your database for a client’s mortgage rate when you help them buy their home. Then, the database can be automated, so that when interest rates drop to a certain level, the agent is triggered to contact the client, alerting them to the possibility of saving money with a lower rate.
Keller says that growing and nurturing your database doesn’t have to be complicated or all-consuming. “You feed the database consistently when you go out every day and just live your life,” he says. “Take care of it, tend it, develop it,” he adds. “Your business is your database and your database is your business.”