It’s no secret that recessions are an inevitable aspect of the economy. Those periods of temporary economic declines can significantly impact just about every industry, and that also includes real estate businesses. With crazy stock market gains, record low interest rates, and uncertainty in the global economy resulting from the COVID-19 crisis, the real estate market is destined for a major correction if history repeats itself.
While recessions are scary, the good news is that there are several key things you can do to not only weather the storm, but thrive through it. Whether you are a Bay Area real estate agent or a realtor across the nation, here are some fundamental ways you can gain momentum during recessions that will help you come out even stronger than when you went in.
Build Fierce Loyalty
As a Bay Area real estate agent, you face steep competition in market highs, because there are plenty of properties to sell, and there are plenty of agents wanting in because the level of risk appears less. When the market corrects or crashes, it’s a different story. Fear kicks in, people quit, and the bulk of those agents who poached some deals move on because real estate requires true professionalism and grit to make it as a career.
Outside of online leads and networking, your customers can become your biggest lead generators if you build fierce loyalty. During the good times, it’s easy to move onto the next deal. As times change, it’s important to remember who got you there, who pays your bills, and invest in those clients. Studies show it takes 6x the amount of work to get one new client, so keeping your base happy is critical. We also know today, that online influencers and micro-influencers lead to sales, be it a cup of coffee or a new home. Understanding the lifetime value of your client, their network, and who you can tap into should change your mindset and focus to build a customer loyalty program in your real estate business. Here are some tips to get started:
- Use your CRM to capture birthdays to send a card or nice wine; capture the details and send them a cabernet if they love red wines instead of champagne, for example. Personalization is key to loyalty programs today, and using a CRM is how you can be seen as that agent who remembers everything.
- Be the realtor of choice to their entire family, friends network, and see if you can do a workshop for their employees if you are selling to CEOs.
- Know your target market, and stay focused on building loyal clients who like engaging with you.
Increase Network Referrals
Increase your resourcefulness by collaborating with accountants, building contractors, private lenders, and even bank mortgage servicing managers who will remain active during an economic recession to help you stay afloat. Remember, it’s who you know that’s important.
Focus on Marketing
If you are facing a slower market, then think outside the box and view it as an opportunity to improve your marketing. Perhaps you were too busy to invest time into it before, but now that you can, you can revamp it to optimize your sales while giving you a competitive advantage when the recession diminishes again. Sharpening your marketing tactics and appeal now will provide maximum results later when buying and selling is hot again.
Bonus Tip: Make sure to focus more on digital marketing and social media presence. You can easily reach thousands of people with just one listing going this route, and knowing how to share content. Online communities are key because your ability to network in-person during COVID-19 is essentially gone.
Diversify Your Income
No matter what profession you are in, it is always a wise idea to have several income streams. Don’t be dependent on selling properties to keep yourself going. Instead, think about branching out to rental properties because more people tend to rent during recessions than buy. This could help you increase your demand and services while minimizing the adverse effects of the recession on your business. You can also think about investing in properties while the prices are lower and flipping them or renting them out when the market recovers to earn some passive income on the side.
Conclusion – Don’t Wait Passively for the Storm to Pass
With the global pandemic hitting the nation hard, there is no denying that it has jump-started the rise of a new recession as a result. In fact, The National Bureau of Economic Research officially declared a recession on June 8th, 2020, which has been forming since February. But just because this might be the reality does not mean you have to passively wait for the storm to pass. You can do your due diligence and leverage the tips provided to keep you growing during hard times.
In the end, buyers, sellers, and real estate agents would all much rather avoid this market downturn. Since it is not negotiable, the best thing you can do is prepare, stay confident, and always remember that recessions do not last forever. If you play your cards right, you will still be standing tall when the dust finally settles again.
