The 20-60-20 Principle | The Zebra Blog

The 20-60-20 Principle

The 20-60-20 principle covers many different facets of a real estate agent’s business, but nowhere does it have a more poignant meaning than with past clients. In today’s busy real estate market past clients are often forgotten or agents simply do not have the time to be focused on their past clients while they are busy taking care of current clients and possibly potential clients.

However, if an agent doesn’t always want to be chasing new business, once the transaction is over, past clients must be kept in touch with or past clients will quickly find other agents in their day-to-day lives that they connect with. These agents are all too happy to pick up the pieces of what has been left behind.

Many agents will think their past clients will naturally do business with them again and refer them because they did a great job at the transaction. They may have done the best job in the world, but in reality only some past clients appreciate that hard work enough to be loyal forever.

In my calculation, about 20% of an agent’s database including past clients and sphere will always be loyal, raving fans. However, 20% of them will easily choose another agent if the situation presents itself. For example, imagine an past client is out for dinner with an acquaintance who happens to be a real estate agent and they begin talking about that past client getting their home ready for sale. The agent may offer a walk-through of the house and a CMA and if this past client is in the 20% non-loyal section, he or she won’t think twice about saying, “sure, come on over.”

60% of your past clients are fairly neutral. Neutral means they aren’t your raving fans and they might think twice about working with another agent.

Think about your own buying habits and I bet you will see this 20-60-20 principle in action! About 20% of the things you buy are probably products that you are vehemently loyal to. That might be hair products, coffee, laundry soap, or even peanut butter. It doesn’t matter what coupons you get in the mail or what sale is going on at the store, you are buying that product you have been buying for years. You are so loyal to this product, your kids will probably buy the same thing when they move out just out of habit. In fact, if a store in town stops carrying that particular product, you might even consider shopping somewhere else as this product is a non-negotiable for you.

About 60% of the things you buy are things you are a little more ambivalent about. The intent to be loyal is there, but when the mood strikes, you may buy something else. Perhaps someone is handing out free samples of juice and although you always buy one type of juice, you decide this time to buy the sample because it was tasty and on sale. If there is no reminder to go back to the original juice, you might stay with this new juice option as nothing is compelling you to go back to the original juice.

The final 20% are items that you are much more opportunistic about. Perhaps this list includes things like potatoes (and because you always mash them, you don’t care if you use russets, white or red potatoes. Whatever is on sale is okay by you!) or milk (your kids go through it so fast and they don’t care if it is 2% or full fat milk, organic, or expires in three days). Whatever coupons you have is what you buy.

These same principles apply to your database of past clients. Making sure that 100% of your past clients are cared for will not only make your loyal 20% even more loyal, but will keep your 60% coming back for more, and will make your opportunistic 20% think twice before going elsewhere.

Never forget the 20-60-20 principle of past client care and make sure you connect on a regular basis! I highly recommend a monthly mailer that includes your custom brand and real estate information that they would find relevant and connect once a year either via a client appreciation event or by sending an in-depth property report (annual client review). The opportunity to make 100% of your past clients ongoing raving fans is there with a little effort on your part!

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