Why a Flywheel business model is perfect for real estate firms
For whatever reason, real estate agents rate poorly when it comes to our perception of ethical and honest professionals. A Roy Morgan survey (April 2021) called the image of professions survey for 2021 stated that only 5% of Australians aged 14+ rated the trust-level of real estate agents as ‘high or very high’. To give it some perspective, that’s the 3rd lowest out of all major professions surveyed, slightly above advertising people and car sales people.
The direct correlation this has for future client referrals means real estate agents have to work super-hard to develop trust. We know that client referrals are the most effective marketing channels for new listings, so finding a business model that consistently puts the shining light on customers could be a game changing move.
In recent years, the Flywheel Model has become the new kid on the block for taking a customer centric approach. In our opinion, it’s an absolutely perfect road map for real estate agents achieving this.
What is the Flywheel Model?
The Flywheel Model (or metaphor) was developed as the anti-thesis to the classic sequential sales funnel.
The traditional sales funnel is all about a sequence of events to put a customer / sale as an outcome. Perfect for seeking out new clients. The Flywheel Model puts customer satisfaction at the very heart of every business decision. The focus is keeping customers happy, allowing them to drive referrals and ultimately make more sales. It’s leveraging existing customers and building momentum over time.
The ‘actual’ flywheel was developed by James Watt over 200 years ago in his steam engine, the invention that powered the Industrial Revolution. It’s a large mechanical (wheel like) device that is highly efficient at doing three things. Capturing, storing, and releasing energy. Think of it like the wheels on a train or a car…. or in this instance below, a steam engine.
The metephor of a Flywheel was adapted by HubSpot (a marketing and sales sofetware company) co-founder and CEO Brian Halligan. Brian and the team conceptualised it to explain the momentum you gain when your entire organisation aligns around delivering a remarkable customer experience. Flywheels are incredible at storing and releasing energy — and when you think about it, that’s so important when thinking about your overall business strategy.
The thing we love about the Flywheel Model is that understanding the dynamics of ‘energy’ within a business is especially helpful when it translates to how customers help your business grow.
As Brian Halligan stated; “Other models think of customers as an outcome — nothing more, nothing less. All of the energy you spent acquiring that customer is wasted, leaving you at square one. With the flywheel, you use the momentum of your happy customers to drive referrals and repeat sales. Basically, your business keeps spinning.“
How It Works
The energy (or momentum) your flywheel contains relies on:
- How fast you spin it – The speed increases when you add a force to areas that have the biggest impact. Forces are for example, inbound marketing, a referral program, paid advertising, investing in your customer service team, post-sales support services, etc. By focusing on how you can make your customers feel loved and successful, they’re more likely to talk about this experience to potential customers.
- How much friction there is – If speed is good for your flywheel, you also need to make sure nothing is slowing it down — that means removing friction from your business. Friction is anything that slows down your flywheel. Do you have poor internal processes? Is their a lack of communication between teams, or misalignment between your customers and your employees? You can remove friction by understanding why past customers were unhappy and where prospects are getting stuck in deciding to list with you. Are all your teams aligned? Is your pricing straightforward or confusing? Are your processes thoughtful when dealing with customers?The more you speed up and remove friction, the more you will create advocates for your business. And all those advocates become a force that spins your flywheel.
- How big it is – the bigger you are as an organisation, the harder it is to influence the momentum of your Flywheel, but on the upside, any changes to increase speed and remove friction result in a momentum shift that’s hard to stop.
There’s a stack of great info available about the Flywheel Model and the importance of how your organisation implements three key phases. Attract, engage, and delight. By applying force to these three phases, you can create an incredible customer experience.
In the attract phase, you attract potential clients with useful information and eliminate barriers as they try to learn about your business. You’re trying to earn people’s attention, not buy it / demand it.
The engage phase is all about making it super-easy for clients to work with you… it’s all about their preferred timeline and channels – not yours. Focus on developing lasting relationships, not closing listings.
This is where you help, support, and show customers that you are truly thoughtful. In the delight phase, it’s as much about the little things like cool water on a hot day at open homes, as well as the bigger things, like thoughtful post-settlement thank you gifts and follow ups. Remember, a happy customer is your success. A happy client is more likely to want to return the favor for you. It provides an opportunity to get case studies, trusted reviews (and we all know how important that is given the stats above) and referrals that help you convert more listings.
The aim is to delight all clients, but the reality is, not everyone will become an advocate, and that’s OK. Don’t dedicate so much resource toward delighting an unpleasable client that you reduce the attention to for others.
So, it’s an overarching methodology of the client experience with your business and to incorporate a flywheel model into your business, each area (Marketing | Sales | Service) needs to consider how they continually Attract | Engage | Delight.
‘Delight’ is where there’s a clear opportunity to utilise the post-settlement gift as a game changer to increase client referrals.
Real estate companies that choose to a Flywheel business model have a huge advantage because they aren’t the only ones helping their business grow — their customers are helping them grow as well. If you want to find out more about how Tropolicious can help you in your post-settlement customer experience, get in touch here