Capturing the Vast Consumer Market- Turning Prospects into Clients

published in The Communicator, Winter 2000

With the refinancing boom over, it's time to look for another good source of business. Here's how to capture your share of the consumer market. For purposes of this article we will define consumer as a person (not a business) who is seeking appraisal services.

One advantage of having lenders as clients is that they typically generate repeat orders. With consumers, however, repeat orders are harder to come by. This article will show you how to use sales techniques to capture more consumer business and increase your referral business from those sources.

For most appraisers, a significant amount of their consumer business comes from the directory pages in the phone book. Many consumers simply go through the phone book and call a number of appraisers and ask, "How much do you charge?" and "How quickly can you get my appraisal done." The consumer calls four or five appraisers and chooses the one offering the fastest turn-around time at the lowest fee. Why do they shop that way? Because they are unaware of what makes appraisal firms different from each other. Their lack of knowledge about our profession makes us look the same in their eyes. Your firm will be remembered if you are the one who spends the time necessary to provide answers to their questions beyond the fee and turnaround time issues. But consumers generally will not ask many other questions without prompting. They might be embarrassed to ask the wrong questions. And perhaps other appraisers have been rude to them.

Be honest with yourself and estimate the time you usually spend with a first-time caller. I'd bet less than a few minutes are pretty typical. How can you extend the time you spend with a consumer on the phone to provide them with information that distinguishes your firm from others? Here are some ideas for turning phone conversations into business.

Targeting Information

When talking to a consumer, bring up topics they have expressed an interest in and let them know you have information prepared to help them. Offer to send information that provides more details on the topic of interest. The idea is to get the consumer to place an order during their initial phone call. If that isn't practical, you can follow up after they've had a chance to review the information to see if they have any questions. This is the main benefit of the information sheet. It gives you a valid reason to call back a day or so later and, while they wait for your information to arrive, it just may prevent them from going to your competition. When talking to the consumer you may consider saying something like, "This information package includes a lot of information that you really should know before placing an appraisal order."

Some possible topics include PMI removal, transferring an old appraisal to a new lender, tax appeal information, the contribution of new improvements (decks, bathrooms, etc.). Needless to say, you can create any sort of information package once you know which topics the consumer is interested in.
I'll often ask if they have a fax machine available. Most do, at least at work. I'll say, "Great, I'll fax this information to your office so that you can read it tomorrow." Now you've created a situation where they know they'll have your information at their office the next day. This might delay them from making a decision to place an order with your competitor until they've had a chance to receive your information. We're trying to control the sales process even after the consumer is no longer on the phone with you.

Even if you have no information sheets prepared, you can still offer to call the consumer back with the information they requested. Again, it gives you a chance to call back and possibly delay them from going to your competitors. How often does a potential client give you their number so you can call them back? Probably not very often. That's why the information sheets are so valuable.

Consider providing sets of these information sheets to local Realtors. Realtors are always looking for handouts for their clients. In my case, I designed the street map for our local telephone book. I keep the map updated with all the current streets and provide copies to all the local real estate firms. My logo and small advertisement are printed on the face of the map.

Give the consumer your web site address so they can learn more about your company. The novelty aspect of the Internet is still very much alive and many folks just like going to the Internet to look something up. Try to create a number of different pages on your site. For example, one page might give the consumer information about your relocation services; another might be for PMI removal. Don't place links to these special information pages. Refer each consumer directly to the specialized page. They'll appreciate the information that pertains to their specific interest. You also don't want all the other (extraneous) information on your site to confuse them and impede a decision. Targeting specific information to a consumer is a well-known and highly effective direct marketing principle.

Tooting Your Own Horn

Stress the credentials of the appraisers in your office. Your credentials are bound to be different from other firms. There's always the chance that your firm specializes in an area that is most appropriate for the consumer's needs. You'd never know that unless you tell them about your credentials up front. Consider developing a list of your firm's credentials and posting it near the phone. That will make it easier to recite the information completely rather than trying to rely on memory.

Tell them you'll provide references of clients you've had in their area. This gives another reason to call them back. Consider telling them, "You know, you really should check the references of any appraiser you plan to use." Have these client reference sheets prepared ahead of time by getting permission from prior clients. To eliminate any USPAP problems, don't provide any consideration to those prior clients. How many other appraisers would have this information readily available? Probably very few.

Handling the Call

Most consumers go through the phone book and begin calling various appraisal firms. They leave messages at some offices and get the chance to talk directly to appraisers at other firms. Your lender clients, with whom you've established a relationship, know you to the point where they can figure out if you can accept a certain order. A consumer 'ain't going to wait' for you to call back. If a consumer is satisfied with a particular appraisal firm they'll more than likely place an order with that firm before waiting for you to call back. Your firm can lose a lot of business simply because it took too long to return a consumer's call. Think about how many times you've returned a phone call only to have the consumer tell you they've already found someone else. Leave your pager or cell number on your voice mail to eliminate missing their call all together. If you don't want to give your pager and cell numbers out to everyone, consider programming your voice prompts to ask the caller to generically identify themselves. "Press one if you are a lender, press two if you are a homeowner." Speed is the issue here. Try to develop a system in your office where returning calls from consumers quickly is a priority.

If the consumer decides to use your firm, you might also want to consider offering to call back the appraisers your new client left messages with. They'll be more inclined to use your firm if you handle the callbacks. It's a tough call to make. Only you can decide how badly you need the business. This is a popular tactic among real estate agents when they pick up an expired listing. The homeowner is often too embarrassed to call their first agent back to tell them to pick up their for sale sign.

When you get a consumer who calls regarding PMI removal work, offer to call their lender. Or, offer to check back with them in a few days after they've had a chance to get the particular appraisal requirements from their lender. Better yet, have one of your information sheets available for this topic. Tell them, "I have an information sheet available on PMI removal. It tells you what you'll need from your lender prior to ordering an appraisal. You wouldn't want to order an appraisal and then find out it won't work for your lender." Get their lender's name by saying: "Maybe I've already worked with them, who are they?" If they happen to be using a local lender with whom you have a relationship, that's fantastic. "Oh, I work with them all the time…" When calling back a few days later you can provide them with information on their lender and let them know you can provide a compliant appraisal. Even though we all do PMI removal work, who do you think will capture more business? The appraiser who says, "Yeah, we do PMI removal work" or the one who says, "You've called the right place. Let me step you through the process. First, …."

Checklists

Consider having checklists available for taking incoming orders. I changed accountants a few years back and interviewed a number of prospective firms. I remember that everyone, except one accountant, just sat across from me and answered my questions. The accountant I finally chose pulled out a formal interview sheet and went through a progressive series of questions asking me about my business. Was she more organized or a better accountant than the rest? Who knows, but her adherence to her checklist conveyed to me a level of professionalism that was better than the other accountants. Do the same for your business. Have a formal interview checklist that you can go through with a consumer and it will give your firm that higher level of professionalism.

For Sale by Owner

If you get a for sale by owner consumer who is inquiring about getting an appraisal for listing purposes, consider offering a more complete FSBO package. This may seem obvious but many appraisers will only develop a typical market value appraisal and leave it at that. The consumer has their market value but doesn't have everything they need to competitively price their house for sale. If you provide specialized FSBO services you need to stress that during your conversation. You want the consumer to be satisfied that they've found an appraisal firm that specializes in their needs. Consider telling them something like, "We do a lot of listing appraisal work. While some appraisers only provide market value, we've developed a complete package including…" Obviously, any competent appraiser can provide things like on-market competition and anticipated market time estimates, but your specialized services might be enough to distinguish yourself from the appraiser who simply says, "Yeah, we can give you a value."

Are you really desperate for work? Offer to drive by or do an interior inspection before you give the consumer a quote. I guarantee you'll get most of these folks as clients if they place an order. This technique also works well when you tell them you'll send them something in the mail. Ask for their address and say, "Oh, I have an appraisal there today (or some work in that area) and I'll just stop by to drop the information off…" Or, I'll be in the area this afternoon (of course, to drop it off!). I got an order just last month because I was the only appraiser willing to drive by the consumer's house before I quoted them a fee. After the amount of work I did they didn't trust the other appraisers who quoted them over the phone without seeing the property. Remember, the consumer's perception of reality is just as important as the reality of the situation. I'm sure the other appraisers could have handled the order as well as I did. But by doing all the up-front work, I showed them that I wanted their business.
Offer free delivery of appraisals to consumers. Many appraisers might offer this service if asked but you can win by being proactive. Tell the consumer that you have free delivery. Your competitor might not convey that they offer the same service. Do you really think a consumer will call them back to see if they also offer free delivery? I doubt it.

Finally, make sure to ask for the order- you'll be among the few appraisers who do. Consider something like, "You know, I would really appreciate your business. We've talked quite a bit and I know you've considered other appraisers. Can we set up an appointment today or are there some other questions I can answer? If they aren't ready to place an order then get their permission to call back. Consider: "Can I call after you've had a chance to think it over?" or "I can save you from having to keep going through the phone book calling other appraisers?"

Handling Questions--

Consumers will ask the same types of questions when they call an appraisal office. Make sure you have responses memorized for these typical questions. One standard sales technique is to answer a question with a question. This isn't something you want to do repeatedly, as it gets annoying. Rather than using my phraseology, come up with your own. By asking the consumer your own questions you are getting information that will allow you to tailor your appraisal services to their particular needs.

Consumer asks: "What is your turn-around time." Rather than answering, "Oh, we can get it done in a week," you should ask, "When do you need it by?" Once they've told you their deadline you can quote a fee based on that. If you say a week but they need it in five days, they won't be interested. But if you know that you can possibly accommodate their order with a little extra work then you can get their order at a higher fee. You won't get their order at all if you tell them a turn-around time that is longer than they can wait. Perhaps you can get a verbal value to them before the written report is entirely done. You wouldn't know this if you just told them your typical turn-around time without knowing their needs.

Consumer asks: "Do you do a lot of work in my area?" Obviously what they are looking for is an appraiser who can do appraisals in their neighborhood competently. If you haven't done a lot of appraisals in their area, try answering, "I know you're looking for an appraiser who really knows your market; I don't blame you. Let me tell you how we research the market so that we're sure not to miss anything." Even if you haven't done a lot of appraisals in their neighborhood, this sort of response allows you to explain the appraisal process to them so they can be comfortable knowing you will do the research required to give them a credible appraisal. This technique will assist you in getting more business in new neighborhoods. It sure beats saying, "Well no, I really haven't done much work in your neighborhood."

Remember that the sample responses given above should be rephrased into your own words so they sound natural. Try to memorize some key phrases so you can convert more callers. You'll start to convert more inbound telephone calls into actual orders if you approach them with practiced techniques rather than just "winging it."

Following Up

After doing the appraisal, leave referral information with your client. I have a little booklet that I provide entitled: "Understanding Your Real Estate Appraisal." It provides explanations for the major sections of the URAR form and eliminates a lot of phone calls. Remember to include an explanation of other appraisal services in which your client might be interested. They are consumers, so your advertising literature to them should provide more explanations rather than just short abbreviations of your services. Instead of a bulleted "PMI Removal," consider providing a paragraph of information explaining that they may be wasting money with their monthly mortgage payments and you can help. Sell the benefits of your services.

Once a consumer becomes a client, consider calling them even if they don't call you with any questions. If you did an appraisal for PMI removal and the value was enough to satisfy the lender's equity requirement, call them up later to make sure your appraisal was acceptable to their lender. You can assume it was because they didn't call you back. What you are doing is called customer service. You are placing one more impression in their mind about your firm's ability to satisfy their appraisal needs.

Send thank you notes. This is another one of those simple items that everyone has heard about but few use. I have some generic thank you note covers that can be folded over onto a paper insert. I have a thank you message template as part of my appraisal form-filling package. I print out the thank you message with the appraisal and fold and insert it into the cover. I mail it about a week after the appraisal is delivered. Develop your own procedure to ensure you can consistently get thank you notes mailed to all your consumer clients. My thank you note says, "Thank you for ordering an appraisal from Appraisal Services, Inc. You should have had a chance to read your appraisal by now and I wanted to let you know that you can call anytime if you have questions. If you need to know the value of your house in the future just give us a call- we provide discounted fees for updating an appraisal. Finally, a lot of our business depends on referrals. I would sure appreciate it if you could tell your friends and family about our services if they ever need to value a property. I've enclosed a brochure outlining our complete range of appraisal services. Thanks again!"

Targeting Your Advertising

If you plan on attracting consumers from your directory advertising then you'll have to put some thought into the content of your advertising. Customize your Yellow Pages advertising to be specific, not generic. There are plenty of generic ads in most directories. A generic ad is not going to stand out. An ad that specifically mentions your areas of expertise will pull better than a generic ad. You need to determine your firm's expertise and find a way to put that information into a small ad. Have you ever thought about stressing only those services that would be most attractive to consumers? Try leaving out any areas that appeal mainly to your business clients (lenders, attorneys, etc.). These business prospects already know that most appraisers can provide these services for them. The typical consumer isn't likely to know whether the average appraisal firm does PMI removal work or relocation appraisals. They'll be scanning your ad looking for their specific need. Don't waste the valuable space in your small ad trying to sell a service to a businessperson who, more than likely, already knows what you do. In short, try focusing your directory advertising toward the consumer market and use other methods of promotion for your business clients.

Learn from the Competition

If you find that some of your competitors have larger-than-normal telephone directory ads they might know what works for that particular directory. If you have access to some older directories, see if your competitors have systematically increased the size of their ads over the years. Also, check to see what rewording they've done. If you start to see that they are now placing an emphasis on PMI removal, for instance, then perhaps that directory pulls particularly well in that area for that service. Take advantage of your competitors' marketing research. The changes in their ads throughout the years will generally reflect what is working for them. If it is the first year that you are advertising in a particular directory then your competitors' ads are probably the best source of marketing research you'll find.

Consider not putting in your city location in your directory ad if you are advertising in many outlying directories. Many consumers feel they need an appraiser whose office is located in their same town. Solve this problem by not placing your city in your advertising, or better yet, by setting up local numbers for each geographic area.

Partnering

Partner with Realtors. Avoid USPAP conflicts by not providing anything of any value to Realtors who refer business to you. But offer to be available to answer their valuation questions. Try to build a relationship with local Realtors so they think of you first. Remember, many Realtors are the first to talk to a homeowner about many issues, such as PMI removal work, the value of a house they are considering buying, etc. Keep in mind that to capture a share of a certain segment of the consumer market, you will probably have to capture your share of the Realtor market first.