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The Lifetime Value of a Client

The life time value of a client

Have you ever thought about what the life time value of a client means to you?

Most people buy several homes during their lifetime. Their first home, (starter home) their move up home, their dream home, their downsize home and the well…their retirement home. Let’s see that is five homes. Now if we are able to serve them well during each transaction then that is a lot of business for us.

I know personally there is one house I have sold four times in Saline. That is a lot of commission. I sold it to some folks moving in to Saline the first time. Then they got transferred and I listed it and represented both  the buyer and the seller the next time. That is four times I have been paid on this home sale.

So there you have it 4 times.

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The current home owners are still living there and their son just graduated from high school in June. They still have a daughter in high school.

Have I stayed in touch with them?

You betcha…..

I have no idea when they will move, if ever. But, by staying in touch with them and rejoicing with them in the major events of their lives…I am hoping they will work me when they decide to sell and downsize.

Current relationships are easier to maintain

It is easier to maintain the relationships we build than to gain new ones. I am all about building new business and one way I do that is through my lead generation strategies. But, oh… it is so much sweeter and easier when they trust you and the relationship already built.

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Establishing the life time value of a client is much easier. Trust is already established,you know them, they know you, they respect you and trust that you have their best interest at heart. As much as I love meeting new folks and generating new business, working with past clients is the heart and soul of a successful Realtor.

Reach Out

During this upcoming holiday season, reach out to those who you have done business with in the past. If you know of a Realtor who is not renewing their license, connect with them, offer to take care of their past clients. Have them write a letter of introduction for you and then follow up. Bring them into your sphere. Cultivate those relationships and make them last a life time.

***Photo Credit***

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Written By

Written by Missy Caulk, Associate Broker at Keller Williams Ann Arbor. Missy is the author of Ann Arbor Real Estate Talk and Blog Ann Arbor, and is also the Director for the Ann Arbor Area Board of Realtors and Member of MLS and Grievance Committee's.



  1. teresa boardman

    December 2, 2008 at 6:18 am

    This is something I have been thinking about lately. Much of my marketing expense is generated by keeping in touch with past clients. Most of them don’t move more than once a decade. If I deployed those marketing dollars to attract new business wouldn’t I be better off?

  2. Missy Caulk

    December 2, 2008 at 6:37 am

    Teresa, I spend very little money on my past clients. A phone call here and there, a newsletter once a month, (electronic) Thanksgiving cards and birthday cards. A quick email here or there.

    The last 4 years I have had less and less transactions from my past clients and sphere because in MI folks aren’t moving unless they have to. So in order to continue to grow I had to spend more on getting new clients.

  3. Lisa Sanderson

    December 2, 2008 at 9:48 am

    I am sure every area is different w/rates of turnover, etc, but keeping in touch with past clients is important regardless. Referrals from them are of course welcomed and having all those walking billboards out in the world can’t hurt! With today’s technology it does not have to be expensive to do that.

  4. Elaine Reese

    December 2, 2008 at 1:39 pm

    When I got into this business, my first two transactions were a result of clients I met at open houses. Both of those couples have since resulted in the sale of 7 homes. That’s 14 homes for a couple hours of sitting at an open house.

    So their “lifetime value” is pretty important to me!

  5. Missy Caulk

    December 2, 2008 at 3:59 pm

    Elaine, now your beating me at repeats again. LOL You OSU folks just don’t give up.

    Lisa, no it doesn’t cost a thing to pick up the phone or send a email. They really appreciate hearing too. Eventually the market will change and we will be glad we kept in touch.

  6. Elaine Reese

    December 2, 2008 at 5:16 pm

    LOL, Missy. Actually they weren’t repeats. The extra homes were kids, grandparents, and referral to friends. Still, it represents the lifetime value of a client.

  7. Mack

    December 3, 2008 at 6:42 am

    Missy it seems that every time you post an article you generate more work for me to do. Thanks for helping us remember the things that make us successful.

  8. Brian Brady

    December 3, 2008 at 10:36 am

    @Teresa Boardman

    I think marketing to past clients is a must; your message might be wrong, though. If the life cycle is such that those people will only use you once a decade, than your message might be altered to generate referral business.

    You do such a wonderful job at community building that this should be a natural for you. I think the challenge for you might be conditioning old clients to become referral machines (I know you don’t like to appear pushy).

    You might consider a monthly contest for your past clients along the lines of the v-pumpkin (a great idea). Offer a gift card to a nice dinner.

    You’ve built up an army, Teresa. Now you just need a battle plan and a call to action.

    PS: You could talk to those folks about investing.


    I can’t think of a more coveted resource than a happy past client. This article demonstrates the value a practitioner can derive from them. The economic value of a happy client, properly nourished, supercedes any lead from the internet.

  9. Mark Storolis

    December 3, 2008 at 11:10 am

    It costs 1/6th as much to market to previous clients for referral business, as it does to acquire a new/novel client – Ralph Roberts, Ron Zemke, and a variety of analysts all cite this figure.

    It’s pretty common sense to market to those who already love you. Referral business is the soul of all good business.

  10. Missy Caulk

    December 3, 2008 at 1:48 pm

    Brian, I do both. I need both. Can’t limit myself is how to do business. My stat’s up until a few years ago was typically 85 of 15 new. It is not 75/25 with 75% being new leads. It will even out I believe once buyers start to move up or down in MI.

    Mark, you are correct, it does cost more in hard money to get new clients than to maintain and care for past clients.

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