Training Handouts for Print
Tracy Arnett Realty
MaxAvenue Boot Camp Training
Presented by Harold Ware, Founder and CEO
1
2
b. Team Communication and Clear Roles
a. Measure What Matters—If You Don’t Measure It, You Can’t Manage It
2. Corporate Culture: Performance through Purpose & Collaboration Co abo at o
a. Start with the Whyy
1. Purpose/Mission/Vision/Values
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals 3. Business & Economic Model
a. Transaction Treadmill vs. Customer Lifetime Value Model M d l
4. Durable Competitive Advantage (Differentiation)
a. Raise the bar of professional competence b. The Power of Branded Differentiation c. Ritz Carlton vs. Motel 6
3
4
a. Transactional competence is “what you do”, how you make your customer feel is “how you do what you do” d ”
6. Customer Experience Management Systems
a. Warren Buffet – “perfectly aligned organization”
5. Operational Excellence
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals 7. Information & Database Systems a. Central nervous system of business b. Your database is your biggest asset
8. Endless Stream of Leads (Superior ( p Marketing/Lead Generation) a. He who controls the leads wins b. 14 Fundamentals of Lead Management
5
6
b. Know your costs
a. Align your finances to the lifetime value business model d l
Strategic Financial & Accounting Systems
a Be in business for yourself a. yourself, but not by yourself
10. The Right People & Organization
9.
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals Stay ahead of the curve
11. Productivity Technology a.
Mastering meetings, time and projects
12. Management g Systems, y Time/Project j Management a.
7
8
To be the world's leading consumer champion for homebuyers, home sellers and real estate investors investors.
MaxAvenue’s Purpose
MaxAvenue’s Mission
To serve our clients by becoming extraordinary lifetime trusted advisors through passionately pursuing professional excellence and personalized relationships.
9
10
To ensure that all home buyers, sellers and investors receive equally exceptional standards of professional competence and service anywhere in the world
MaxAvenue’s Vision
Build a database of people who know you, like you and trust you and achieve differentiated top-of-mind awareness through personal and professional relevance over a lifetime
11
12
REV. NUMBER
© 2011 MaxAvenue ®
TM
Your Business Blueprint for Maximum Success
Differentiated Value
Re-Tool Your Skills
Le
Manage Your Business
Mission
Consumer Champion
Relationships for Life
The MaxAvenue 7 Step “Work Smarter, Not Harder” Strategic Business Model for Realtors
e
Lif
c e
u
tim
e om In
Q ity l a s d a TM
M i Maximum Differentiation Diff ti ti
“The The stream of value flowing to the customer is probably the single most important element in any business business… creating and delivering superior value to the customer is the center of the value value-creation creation cycle and underpins all business success.”
- Frederick Reichheld, Loyalty Rules
13
Personal and Professional Relevance
Value-Added Real Estate Expert™
Real Estate Resource for Life
Lifestyle Resource for Life
Business Resource for Life
3
4
5
6
7
V
S U B
STE
O S I RS D ADV C O N NAL A T RC IN E RELEV S E EF E SS F I L C FO R LI UR O S FE RE
RU
DIFFERENTIATED TOP-OF-MIND AWARENESS
E
VAL
RE
Version #1
Trusted Advisor and Consumer Champion Positioning
2
CH RA E dAviMs d e M t Us oP rSu
R
ES UET A T AD E E PR C O TN T
© 2011 MaxAvenue®
Differentiated Top-Of-Mind Awareness
1
F O
RESO RE D RT UR AL E E C D P A X ESSION L RELE
Y O LE R
ATLM E R
E
The 7 Stages of Achieving Differentiated Top-of-Mind Awareness
TE IFE A T RL S E O F E E C AN N IO r
LIF
The “Holy Grail” of Lifetime Customer Value Transform One-Time Customers Into Lifetime Champions™
PE
U O S
14
Where do you rate?
High
Diff Differentiated ti t d T Top-of-Mind f Mi d Awareness A High
Top-Of-Mind Awareness Low
Differentiation
15
16
-Warren Buffet
“…businesses need a durable competitive p advantage, g , a long term sustainable advantage, which is strategic in nature and is backed up with a perfectly aligned organization to consistently deliver the promised value proposition.”
Customer Acquisition
Customer Lifetime Value
Customer Cross Sell
Customer Experience Management
Customer Referrals
Customer Retention
MaxAvenue Customer Lifetime Value Perspective: Key Measures
Customer Balance Sheet Customer Market Share Customer Lifetime Connection Customer CRM System Utilization Lifetime Value Customer Ladder
© 2009 MaxAvenue®
17
18
Customers for Life
© 2009 MaxAvenue®
Articulate the Value
Align and Integrate the Value
Brand the Value
Differentiate the Value
Create Innovative Value
Deliver the Value Measure the Value
Document the Value
Leverage the Value
Multiply the Value
Extend Lifetime Value
Personalize and Customize the Value
Continuously Improve /Expand the Value
Define the Durable Competitive Value
MaxAvenue Customers for Life Value Loop™ Business Model
Sample of Lifecycle Events
3
CS
4
5
6
8
RB
CS
RF
RF
$90,000 +
RB
9 10 11 12 13 14 15 16 17 18 19 20
20 Year Cycle RB
7
• Get Married • Want different school district • Get promoted—Trade up • Divorce
RF
RF
RF
RF
RF
• Have children—Bigger House • Want a view or different lot • Financial setback—must sell • Death/Estate Sale
RF RF
RF
*Assumes a $10,000 commission per transaction
RB RB CS RF
RF
RF
RF
RF
RF
*Assumes each contact knows 4 friends, family members or neighbors who move each year
$10,000
• Move to new Neighborhood • Move closer to work/family • Buy investment property
IT
RB
• Job Transfer • Buy First Home • Retire--Downsize
CUSTOMER IT
$20,000 +
CLIENT IT
RF
RF
ADVOCATE
RF
RF
RB RB RB CS CS
RF IT
2
1
CROSS SELL
REFERRALS
REPEAT BUSINESS
INITIAL TRANSACTION
RF
RB
IT
RF
$260,000 +
CS
3
RF
· Investment Property · Second Home
RF RF
Transform One-Time Customers into Lifetime Champions
“The 70/10 Lifetime Value Opportunity Gap : 70% of consumers say they would use their Realtor® again, but only 10% actually do. That gap could cost you millions.” – Harold Ware
RF
CHAMPION
THE 70/10 BUSINESS OPPORTUNITY ®
© 2010 MaxAvenue © 2010 MaxAvenue ® REV. NUMBER 1.00 REV. NUMBER 1.00
3 Potential Income Streams After the Initial Transaction
There are 80 referral opportunities over 20 years
2
TM
Lifetime Value Real Estate Selling Cycle
1
How to Harness the Power of Lifetime Customer Value Starting Line to Lifetime Value
GOAL: Get a mimimum of one of these four referral opportunities per year
Initial Transaction
TM
19
Tr ansf or m onet i mecust omer si nt ol i f et i mechampi ons
C U S T O ME R–O N ET I MET R A N S A C T I O N
C L I E N T–R E P E A TB U S I N E S SB U TN OR E F E R R A L S
Hi ghr et ent i on,hi ghr ef er r al s,hi gh cr osssel l i ng,onecl osedt r ansact i on A D V O C A T E – H I G H R E T E N T I O N , O C C A S I O N A LR E F f r om r ef er r al speryear Hi ghr et ent i on,occasi onalr ef er r al s
R eP pI e a tb us i n e ss b u t n o r e f e r r a l sR C H A M O N – H I G H R E T E N T I O N , H I G H E F E R R A L S Onet i met r ansact i on
20
Assumptions:
CUSTOMER
333,334 3%
$
Average Commission
100
Average Sales Price
Number of Past Clients
Sample Value of 1 Client:
10,000
ADVOCATE 10,000
10,000
200,000
CLIENT 10,000
10,000
50,000
260,001
10,000
10,000
10,000
10,000
10,000
90,000
100.0%
10,000
10,000
CHAMPION
MaxAvenue Customer Balance Sheet™ Lifetime Customer Value by Customer Segment
Initial Transaction Repeat Purchase #1 Repeat Purchase #2 Repeat Purchase #3 Investment Property #1
20,000
34.6%
10,000
10,000
7.7%
Investment Property #2
TOTAL LIFETIME VALUE
3.8%
26,000,052
20 Year Referral Commissions
Percentage of Champion Lifetime Value Potential
9,000,018
700,001
35% CLIENT
2,250,005
25% ADVOCATE
5,200,010
20% CHAMPION
1 of 1
8,350,017
100% GRAND TOTAL
20 Year Database Liftetime Value Customers by Segment Mix:
2,000,004
200,000
20% CUSTOMER
1,000,002
20 Year Database Value
20 Year Database Value
© MaxAvenue
21
22
- Harold H ld Ware W
“Your database is either appreciating in value or depreciating p g in value every y day. y The consequences q of your action or inaction can either make you millions or cost you millions. You’re either anxiously chasing transactions or harvesting the bounty of your carefully nurtured advocates and champions. The ultimate criterion for the success of your marketing programs is the behavior of your clients.”
MaxAvenue Lifetime Customer Value Business and Economic Model™
Money on the Table Income Stream Calculator™ How much money are you leaving on the table?
2010 Database Assumptions
Instructions: 1. Enter in your 2010 database assumptions 2. Enter in your average sales price, average commission percentage and listing to buyer sales mix. 3. Enter in your personal ratios for each income stream below. Compare vs. the MaxAvenue Ideal.
Number of Clients in Database Number of Contacts in Casual Sphere of Influence Moving Turnover Ratio
Average Sales Price
$275,000
100
Average Commission
3.00%
100
Average Commission (in Dollars)
$8,250
7
Listing to Buyer Sales Mix
25%
Average Commission Average Commission 4. Review the income potential of each 2.25% from Referrals to Other 0.75% stream and compare it to the current income from Agent Referrals to You Agents generated by your business. 5. How much money are you leaving on the LEGEND table? = This row represents the ratio numbers for the MaxAvenue ideal business = This row represents the ratio numbers for your current business = This field is calculated from other fields = This is a data entry field and can be adjusted with data input = This field has a comment. Mouse‐over it to see additional instructions.
1
2
3
LTV Ratio : Client Repeat Purchase Ratio (CRPR)
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
11.0%
100
11
$90,750
Your Current Business
4.0%
100
4
$33,000
Money on the Table h bl
$57 750 $57,750
Client Repeat Business
LTV Ratio : Client Referral Efficiency Ratio (CRER)
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
35.0%
100
35
$288,750
Your Current Business
6.0%
100
6
$49,500
Money on the Table
$239,250
Client Referrals
LTV Ratio : Client
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$74,250
Client Cross Selling Cross Sell Ratio (CCSR)
23
4
5
6
7
LTV Ratio : CSOI
Casual Sphere of Referral Efficiency Influence (CSOI) Referrals Ratio (CSRER)
Number of Contacts in Number of Transactions CSOI
Gross Commission Income
The MaxAvenue Ideal
25.0%
100
25
$206,250
Your Current Business
7.0%
100
7
$57,750
Money on the Table
$148,500
Casual Sphere of Influence (CSOI) Purchases
LTV Ratio : CSOI Repeat Purchase Ratio (CSPR)
Number of Contacts in CSOI
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
4.0%
100
4
$33,000
Money on the Table
$49,500
Number of Transactions
Gross Commission Income
Casual Sphere of LTV Ratio : CSOI Cross Number of Contacts Influence (CSOI) Cross Selling Ratio (CSCSR) in CSOI Selling The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table y
$74,250
Number of Members in SSOI
Number of Transactions
Gross Commission Income
Structured Sphere of LTV Ratio : SSOI Influence (SSOI) Member Member Referral Efficiency Ratio Referrals (SSMRER)
8
The MaxAvenue Ideal
500.0%
10
50
$412,500
Your Current Business
0.0%
0
0
$0
Money on the Table
$412,500
Number of Affiliates in SSOI
Number of Transactions
Gross Commission Income
Structured Sphere of LTV Ratio : SSOI Member Referral Influence (SSOI) Affiliate Efficiency Ratio Referrals (SSARER) The MaxAvenue Ideal
100.0%
20
20
$165,000
Your Current Business
25.0%
5
1
$8,250
Money on the Table
$156,750
24
Word‐of‐Mouth LTV Ratio : Prospect Prospecting/Networking Conversion Ratio
9
10
500
15
$123,750
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$115,500
LTV Ratio : Prospect Conversion Ratio
Number of Prospects
Number of Transactions
Gross Commission Income
MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$74,250
LTV Ratio : Buyer to Listing Ratio (BLR)
Number of Listings
Number of Transactions
Gross Commission Income
MaxAvenue Ideal
100.0%
20
20
$165,000
Your Current Business
33.0%
20
7
$57,750
Money on the Table
$107,250
Number of Agents
Number of Transactions
Gross Commission Income
LTV Ratio : Inbound
Agent Referrals to You Agent Referral Ratio MaxAvenue Ideal
15.0%
100
15
$92,813
Your Current Business
1.0%
100
1
$6,188
Money on the Table
$86,625
Number of Agents
Number of Transactions
Gross Commission Income
LTV Ratio : Outbound
13
Gross Commission Income
3.0%
Property Marketing
12
Number of Transactions
MaxAvenue Ideal
External Lead Generation
11
Number of Prospects
Referrals to Other Agents Agent Referral Ratio MaxAvenue Ideal
15.0%
100
15
$30,938
Your Current Business
1.0%
100
1
$2,063
Money on the Table
$28,875
25
14
Builders MaxAvenue Ideal Your Current Business
15
REO Deals MaxAvenue Ideal Your Current Business
LTV Ratio : Sales per Number of Builders Builder Ratio
Number of Transactions
Gross Commission Income
300.0%
3
9
$74,250
0.0%
0
0
$0
Money on the Table
$74,250
LTV Ratio : REO Referral Ratio
REO Relationships
Number of Transactions
Gross Commission Income
500.0%
5
25
$206,250
0.0%
0
0
$0
Money on the Table
$206,250
Grand Totals The above income streams represent the transactions you generate by focusing on the MaxAvenue Lifetime Value Ratios™. MaxAvenue focuses you on the most effective use of your time and the most
How much money are you leaving on the table?
The MaxAvenue Ideal Your Current Business Difference in Transactions
Grand Totals The MaxAvenue Ideal Your Current Business Your Current Business
Money on the Table
Total Number of Transactions 280 35
245 Gross Commission Income $2,186,250 $280,500
$1,905,750
26
MaxAvenue Lifetime Value MeterTM
Mi ni
nt
t ia n io
Hig
d de an Br
pions amn, high referrals Chhretentio rentiation
Exc
Highly Differentiated Branded Value Proposition MaxAvenue Lifetime Value DatabaseTM Hug Your Customer Profile Fields Lifetime Connection ProgramTM Repeatable Business Systems
Lifetime Value Business Model
Se Targ gme e nt t M ar atio k e ti n n
Hig r ra ls h D fi fe re
Advo High rete nt i ts referrals o n , oc c a c a ienbut no si o t e na s l Cbulsiness Moderate Differentiation re fe
g
System Driven
Transactional Business Model
ue V al
iffe ve D lusi
Maximum Lifetime Value Maximum Exit Valuation
1 to 1 in Market g
Lifetime Value MeterTM
Undifferentied Value Proposion Transactional Database Limited Personal Profile Data Inconsistent Communications “Seat of the Pants” Business Systems
g
Minimum Lifetime Value Non-Saleable Business
Turn One-Time Customers into Lifetime ChampionsTM
REV. NUMBER 1.00
© 2009 MaxAvenue ®
at
m al Perso Di nal ffe i ty No Marke D t riv Mass Marke ing en tin
ntiated Undi r P o positio Value n
s on as ati M naliz rso Pe
n pe tio Re ia nt re
Get off the transaction treadmill and add $10 million dollars or more to your lifetime income.
C us One timtom e tra nsa er ctio s n ffere
27
ph
Casua lS
e er
BLR
n
CSPR
ur c
R
CRPR
CRR
o
SSRER
CSRER
nce Refe flue rr a n I f l
ention Ra t Ret ti o
f Influence eo r Eff e i ph
Ra ti o
C
n lie
c en i c
ell S s
y Ratio
Ratio
t Ne
NPS
28
REV. NUMBER 2.00
© 2010 MaxAvenue ®
ot Prom er Sco re
If you don’t measure it, you can’t manage it!
CSCSR
ss Sell
CCSR
ro nt C
fluence of In Cr e os er
C
lie
eat Purchas ep e R t R
cy
n
Efficie n
CRER
rral efe R t
fluence of In P
Cl ie
B
ph
o Listing R at er t y io u
atio eR s ha Ca s u a lS
S
io at
d
E y Ratio enc i c ffi
Structure
a
tio
Casual Sphe re
Cl ie
How to use Key Performance Metrics to increase your lifetime income
MaxAvenue Lifetime Value Key Result Indicators Dashboard Turn One-Time Customers into Lifetime ChampionsTM
The MaxAvenue
Lifetime Customer Value Lead Generation Model ™
FRANCHISE/ BROKER LEADS • Leads Systems • National Relocations FARM MARKETING OPEN HOUSES OTHER PROPERTY MARKETING • Postcards • Internet • Print EXPIRED LISTINGS
HOME BUILDERS
FOR SALE SIGNS
FSBO’S
PUBLIC RELATIONS • Articles • Interviews • Speaking
IVR/FOR SALE SIGNS
YOUR WEBSITE/BLOG
SOI PROFESSIONAL ORGANIZATIONS • NAR • Local MLS Board • Builder Trade Associations
AGENT-TO-AGENT CORPORATE RELOCATION ACCOUNTS REFERRAL NETWORKS
SOI SOCIAL NETWORKS • Church • Jaycees • Country Club • Political
COMMUNITY SERVICE CLUBS • Rotary • Lions • Kiwanis • Community Sponsorships
DAILY ROUTINE CONTACTS/FLOW 50 • Gym/Sports • Hobbies • Starbucks • Restaurants SOI
CURRENT CUSTOMERS
PROSPECT MARKETING FUNNEL
STRUCTURED REFERRAL NETWORKS
VERTICAL VENDOR CONTACTS
PERSONAL INNER CIRCLE CONTACTS
PAST CUSTOMERS: REPEAT BUSINESS AND REFERRALS: CHAMPIONS, ADVOCATES, CLIENTS, CUSTOMERS
Maximum Value Home Selling System
• Internet Leads/Direct Marketing • PPC/SEM • Natural Search/SEO • Direct Mail • Direct Response Print • Third Party Leads • TV • Radio • Outdoor Media
EXTERNAL MARKETING
® © 2009 MaxAvenue® MaxAvenue Lifetime Customer Value Ladder™; Maximum Value Home Selling System®; Get the Price You Deserve for Your Home™; Release 2.0 Get up to 5% to 15% More Money for Your Home™ among others are trademarks of MaxAvenue®.
29 29
MaxAvenue Boot Camp Training
Presented by Harold Ware, Founder and CEO
1
2
b. Team Communication and Clear Roles
a. Measure What Matters—If You Don’t Measure It, You Can’t Manage It
2. Corporate Culture: Performance through Purpose & Collaboration Co abo at o
a. Start with the Whyy
1. Purpose/Mission/Vision/Values
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals 3. Business & Economic Model
a. Transaction Treadmill vs. Customer Lifetime Value Model M d l
4. Durable Competitive Advantage (Differentiation)
a. Raise the bar of professional competence b. The Power of Branded Differentiation c. Ritz Carlton vs. Motel 6
3
4
a. Transactional competence is “what you do”, how you make your customer feel is “how you do what you do” d ”
6. Customer Experience Management Systems
a. Warren Buffet – “perfectly aligned organization”
5. Operational Excellence
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals 7. Information & Database Systems a. Central nervous system of business b. Your database is your biggest asset
8. Endless Stream of Leads (Superior ( p Marketing/Lead Generation) a. He who controls the leads wins b. 14 Fundamentals of Lead Management
5
6
b. Know your costs
a. Align your finances to the lifetime value business model d l
Strategic Financial & Accounting Systems
a Be in business for yourself a. yourself, but not by yourself
10. The Right People & Organization
9.
12 Business Fundamentals
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
Th MaxAvenue The M A Business B i Model M d l for f Realtors R lt
12 Business Fundamentals Stay ahead of the curve
11. Productivity Technology a.
Mastering meetings, time and projects
12. Management g Systems, y Time/Project j Management a.
7
8
To be the world's leading consumer champion for homebuyers, home sellers and real estate investors investors.
MaxAvenue’s Purpose
MaxAvenue’s Mission
To serve our clients by becoming extraordinary lifetime trusted advisors through passionately pursuing professional excellence and personalized relationships.
9
10
To ensure that all home buyers, sellers and investors receive equally exceptional standards of professional competence and service anywhere in the world
MaxAvenue’s Vision
Build a database of people who know you, like you and trust you and achieve differentiated top-of-mind awareness through personal and professional relevance over a lifetime
11
12
REV. NUMBER
© 2011 MaxAvenue ®
TM
Your Business Blueprint for Maximum Success
Differentiated Value
Re-Tool Your Skills
Le
Manage Your Business
Mission
Consumer Champion
Relationships for Life
The MaxAvenue 7 Step “Work Smarter, Not Harder” Strategic Business Model for Realtors
e
Lif
c e
u
tim
e om In
Q ity l a s d a TM
M i Maximum Differentiation Diff ti ti
“The The stream of value flowing to the customer is probably the single most important element in any business business… creating and delivering superior value to the customer is the center of the value value-creation creation cycle and underpins all business success.”
- Frederick Reichheld, Loyalty Rules
13
Personal and Professional Relevance
Value-Added Real Estate Expert™
Real Estate Resource for Life
Lifestyle Resource for Life
Business Resource for Life
3
4
5
6
7
V
S U B
STE
O S I RS D ADV C O N NAL A T RC IN E RELEV S E EF E SS F I L C FO R LI UR O S FE RE
RU
DIFFERENTIATED TOP-OF-MIND AWARENESS
E
VAL
RE
Version #1
Trusted Advisor and Consumer Champion Positioning
2
CH RA E dAviMs d e M t Us oP rSu
R
ES UET A T AD E E PR C O TN T
© 2011 MaxAvenue®
Differentiated Top-Of-Mind Awareness
1
F O
RESO RE D RT UR AL E E C D P A X ESSION L RELE
Y O LE R
ATLM E R
E
The 7 Stages of Achieving Differentiated Top-of-Mind Awareness
TE IFE A T RL S E O F E E C AN N IO r
LIF
The “Holy Grail” of Lifetime Customer Value Transform One-Time Customers Into Lifetime Champions™
PE
U O S
14
Where do you rate?
High
Diff Differentiated ti t d T Top-of-Mind f Mi d Awareness A High
Top-Of-Mind Awareness Low
Differentiation
15
16
-Warren Buffet
“…businesses need a durable competitive p advantage, g , a long term sustainable advantage, which is strategic in nature and is backed up with a perfectly aligned organization to consistently deliver the promised value proposition.”
Customer Acquisition
Customer Lifetime Value
Customer Cross Sell
Customer Experience Management
Customer Referrals
Customer Retention
MaxAvenue Customer Lifetime Value Perspective: Key Measures
Customer Balance Sheet Customer Market Share Customer Lifetime Connection Customer CRM System Utilization Lifetime Value Customer Ladder
© 2009 MaxAvenue®
17
18
Customers for Life
© 2009 MaxAvenue®
Articulate the Value
Align and Integrate the Value
Brand the Value
Differentiate the Value
Create Innovative Value
Deliver the Value Measure the Value
Document the Value
Leverage the Value
Multiply the Value
Extend Lifetime Value
Personalize and Customize the Value
Continuously Improve /Expand the Value
Define the Durable Competitive Value
MaxAvenue Customers for Life Value Loop™ Business Model
Sample of Lifecycle Events
3
CS
4
5
6
8
RB
CS
RF
RF
$90,000 +
RB
9 10 11 12 13 14 15 16 17 18 19 20
20 Year Cycle RB
7
• Get Married • Want different school district • Get promoted—Trade up • Divorce
RF
RF
RF
RF
RF
• Have children—Bigger House • Want a view or different lot • Financial setback—must sell • Death/Estate Sale
RF RF
RF
*Assumes a $10,000 commission per transaction
RB RB CS RF
RF
RF
RF
RF
RF
*Assumes each contact knows 4 friends, family members or neighbors who move each year
$10,000
• Move to new Neighborhood • Move closer to work/family • Buy investment property
IT
RB
• Job Transfer • Buy First Home • Retire--Downsize
CUSTOMER IT
$20,000 +
CLIENT IT
RF
RF
ADVOCATE
RF
RF
RB RB RB CS CS
RF IT
2
1
CROSS SELL
REFERRALS
REPEAT BUSINESS
INITIAL TRANSACTION
RF
RB
IT
RF
$260,000 +
CS
3
RF
· Investment Property · Second Home
RF RF
Transform One-Time Customers into Lifetime Champions
“The 70/10 Lifetime Value Opportunity Gap : 70% of consumers say they would use their Realtor® again, but only 10% actually do. That gap could cost you millions.” – Harold Ware
RF
CHAMPION
THE 70/10 BUSINESS OPPORTUNITY ®
© 2010 MaxAvenue © 2010 MaxAvenue ® REV. NUMBER 1.00 REV. NUMBER 1.00
3 Potential Income Streams After the Initial Transaction
There are 80 referral opportunities over 20 years
2
TM
Lifetime Value Real Estate Selling Cycle
1
How to Harness the Power of Lifetime Customer Value Starting Line to Lifetime Value
GOAL: Get a mimimum of one of these four referral opportunities per year
Initial Transaction
TM
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Tr ansf or m onet i mecust omer si nt ol i f et i mechampi ons
C U S T O ME R–O N ET I MET R A N S A C T I O N
C L I E N T–R E P E A TB U S I N E S SB U TN OR E F E R R A L S
Hi ghr et ent i on,hi ghr ef er r al s,hi gh cr osssel l i ng,onecl osedt r ansact i on A D V O C A T E – H I G H R E T E N T I O N , O C C A S I O N A LR E F f r om r ef er r al speryear Hi ghr et ent i on,occasi onalr ef er r al s
R eP pI e a tb us i n e ss b u t n o r e f e r r a l sR C H A M O N – H I G H R E T E N T I O N , H I G H E F E R R A L S Onet i met r ansact i on
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Assumptions:
CUSTOMER
333,334 3%
$
Average Commission
100
Average Sales Price
Number of Past Clients
Sample Value of 1 Client:
10,000
ADVOCATE 10,000
10,000
200,000
CLIENT 10,000
10,000
50,000
260,001
10,000
10,000
10,000
10,000
10,000
90,000
100.0%
10,000
10,000
CHAMPION
MaxAvenue Customer Balance Sheet™ Lifetime Customer Value by Customer Segment
Initial Transaction Repeat Purchase #1 Repeat Purchase #2 Repeat Purchase #3 Investment Property #1
20,000
34.6%
10,000
10,000
7.7%
Investment Property #2
TOTAL LIFETIME VALUE
3.8%
26,000,052
20 Year Referral Commissions
Percentage of Champion Lifetime Value Potential
9,000,018
700,001
35% CLIENT
2,250,005
25% ADVOCATE
5,200,010
20% CHAMPION
1 of 1
8,350,017
100% GRAND TOTAL
20 Year Database Liftetime Value Customers by Segment Mix:
2,000,004
200,000
20% CUSTOMER
1,000,002
20 Year Database Value
20 Year Database Value
© MaxAvenue
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- Harold H ld Ware W
“Your database is either appreciating in value or depreciating p g in value every y day. y The consequences q of your action or inaction can either make you millions or cost you millions. You’re either anxiously chasing transactions or harvesting the bounty of your carefully nurtured advocates and champions. The ultimate criterion for the success of your marketing programs is the behavior of your clients.”
MaxAvenue Lifetime Customer Value Business and Economic Model™
Money on the Table Income Stream Calculator™ How much money are you leaving on the table?
2010 Database Assumptions
Instructions: 1. Enter in your 2010 database assumptions 2. Enter in your average sales price, average commission percentage and listing to buyer sales mix. 3. Enter in your personal ratios for each income stream below. Compare vs. the MaxAvenue Ideal.
Number of Clients in Database Number of Contacts in Casual Sphere of Influence Moving Turnover Ratio
Average Sales Price
$275,000
100
Average Commission
3.00%
100
Average Commission (in Dollars)
$8,250
7
Listing to Buyer Sales Mix
25%
Average Commission Average Commission 4. Review the income potential of each 2.25% from Referrals to Other 0.75% stream and compare it to the current income from Agent Referrals to You Agents generated by your business. 5. How much money are you leaving on the LEGEND table? = This row represents the ratio numbers for the MaxAvenue ideal business = This row represents the ratio numbers for your current business = This field is calculated from other fields = This is a data entry field and can be adjusted with data input = This field has a comment. Mouse‐over it to see additional instructions.
1
2
3
LTV Ratio : Client Repeat Purchase Ratio (CRPR)
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
11.0%
100
11
$90,750
Your Current Business
4.0%
100
4
$33,000
Money on the Table h bl
$57 750 $57,750
Client Repeat Business
LTV Ratio : Client Referral Efficiency Ratio (CRER)
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
35.0%
100
35
$288,750
Your Current Business
6.0%
100
6
$49,500
Money on the Table
$239,250
Client Referrals
LTV Ratio : Client
Number of Clients in Database
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$74,250
Client Cross Selling Cross Sell Ratio (CCSR)
23
4
5
6
7
LTV Ratio : CSOI
Casual Sphere of Referral Efficiency Influence (CSOI) Referrals Ratio (CSRER)
Number of Contacts in Number of Transactions CSOI
Gross Commission Income
The MaxAvenue Ideal
25.0%
100
25
$206,250
Your Current Business
7.0%
100
7
$57,750
Money on the Table
$148,500
Casual Sphere of Influence (CSOI) Purchases
LTV Ratio : CSOI Repeat Purchase Ratio (CSPR)
Number of Contacts in CSOI
Number of Transactions
Gross Commission Income
The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
4.0%
100
4
$33,000
Money on the Table
$49,500
Number of Transactions
Gross Commission Income
Casual Sphere of LTV Ratio : CSOI Cross Number of Contacts Influence (CSOI) Cross Selling Ratio (CSCSR) in CSOI Selling The MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table y
$74,250
Number of Members in SSOI
Number of Transactions
Gross Commission Income
Structured Sphere of LTV Ratio : SSOI Influence (SSOI) Member Member Referral Efficiency Ratio Referrals (SSMRER)
8
The MaxAvenue Ideal
500.0%
10
50
$412,500
Your Current Business
0.0%
0
0
$0
Money on the Table
$412,500
Number of Affiliates in SSOI
Number of Transactions
Gross Commission Income
Structured Sphere of LTV Ratio : SSOI Member Referral Influence (SSOI) Affiliate Efficiency Ratio Referrals (SSARER) The MaxAvenue Ideal
100.0%
20
20
$165,000
Your Current Business
25.0%
5
1
$8,250
Money on the Table
$156,750
24
Word‐of‐Mouth LTV Ratio : Prospect Prospecting/Networking Conversion Ratio
9
10
500
15
$123,750
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$115,500
LTV Ratio : Prospect Conversion Ratio
Number of Prospects
Number of Transactions
Gross Commission Income
MaxAvenue Ideal
10.0%
100
10
$82,500
Your Current Business
1.0%
100
1
$8,250
Money on the Table
$74,250
LTV Ratio : Buyer to Listing Ratio (BLR)
Number of Listings
Number of Transactions
Gross Commission Income
MaxAvenue Ideal
100.0%
20
20
$165,000
Your Current Business
33.0%
20
7
$57,750
Money on the Table
$107,250
Number of Agents
Number of Transactions
Gross Commission Income
LTV Ratio : Inbound
Agent Referrals to You Agent Referral Ratio MaxAvenue Ideal
15.0%
100
15
$92,813
Your Current Business
1.0%
100
1
$6,188
Money on the Table
$86,625
Number of Agents
Number of Transactions
Gross Commission Income
LTV Ratio : Outbound
13
Gross Commission Income
3.0%
Property Marketing
12
Number of Transactions
MaxAvenue Ideal
External Lead Generation
11
Number of Prospects
Referrals to Other Agents Agent Referral Ratio MaxAvenue Ideal
15.0%
100
15
$30,938
Your Current Business
1.0%
100
1
$2,063
Money on the Table
$28,875
25
14
Builders MaxAvenue Ideal Your Current Business
15
REO Deals MaxAvenue Ideal Your Current Business
LTV Ratio : Sales per Number of Builders Builder Ratio
Number of Transactions
Gross Commission Income
300.0%
3
9
$74,250
0.0%
0
0
$0
Money on the Table
$74,250
LTV Ratio : REO Referral Ratio
REO Relationships
Number of Transactions
Gross Commission Income
500.0%
5
25
$206,250
0.0%
0
0
$0
Money on the Table
$206,250
Grand Totals The above income streams represent the transactions you generate by focusing on the MaxAvenue Lifetime Value Ratios™. MaxAvenue focuses you on the most effective use of your time and the most
How much money are you leaving on the table?
The MaxAvenue Ideal Your Current Business Difference in Transactions
Grand Totals The MaxAvenue Ideal Your Current Business Your Current Business
Money on the Table
Total Number of Transactions 280 35
245 Gross Commission Income $2,186,250 $280,500
$1,905,750
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MaxAvenue Lifetime Value MeterTM
Mi ni
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Hig
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Highly Differentiated Branded Value Proposition MaxAvenue Lifetime Value DatabaseTM Hug Your Customer Profile Fields Lifetime Connection ProgramTM Repeatable Business Systems
Lifetime Value Business Model
Se Targ gme e nt t M ar atio k e ti n n
Hig r ra ls h D fi fe re
Advo High rete nt i ts referrals o n , oc c a c a ienbut no si o t e na s l Cbulsiness Moderate Differentiation re fe
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Transactional Business Model
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Lifetime Value MeterTM
Undifferentied Value Proposion Transactional Database Limited Personal Profile Data Inconsistent Communications “Seat of the Pants” Business Systems
g
Minimum Lifetime Value Non-Saleable Business
Turn One-Time Customers into Lifetime ChampionsTM
REV. NUMBER 1.00
© 2009 MaxAvenue ®
at
m al Perso Di nal ffe i ty No Marke D t riv Mass Marke ing en tin
ntiated Undi r P o positio Value n
s on as ati M naliz rso Pe
n pe tio Re ia nt re
Get off the transaction treadmill and add $10 million dollars or more to your lifetime income.
C us One timtom e tra nsa er ctio s n ffere
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CSPR
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CRPR
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Ratio
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NPS
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REV. NUMBER 2.00
© 2010 MaxAvenue ®
ot Prom er Sco re
If you don’t measure it, you can’t manage it!
CSCSR
ss Sell
CCSR
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C
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CRER
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Casual Sphe re
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How to use Key Performance Metrics to increase your lifetime income
MaxAvenue Lifetime Value Key Result Indicators Dashboard Turn One-Time Customers into Lifetime ChampionsTM
The MaxAvenue
Lifetime Customer Value Lead Generation Model ™
FRANCHISE/ BROKER LEADS • Leads Systems • National Relocations FARM MARKETING OPEN HOUSES OTHER PROPERTY MARKETING • Postcards • Internet • Print EXPIRED LISTINGS
HOME BUILDERS
FOR SALE SIGNS
FSBO’S
PUBLIC RELATIONS • Articles • Interviews • Speaking
IVR/FOR SALE SIGNS
YOUR WEBSITE/BLOG
SOI PROFESSIONAL ORGANIZATIONS • NAR • Local MLS Board • Builder Trade Associations
AGENT-TO-AGENT CORPORATE RELOCATION ACCOUNTS REFERRAL NETWORKS
SOI SOCIAL NETWORKS • Church • Jaycees • Country Club • Political
COMMUNITY SERVICE CLUBS • Rotary • Lions • Kiwanis • Community Sponsorships
DAILY ROUTINE CONTACTS/FLOW 50 • Gym/Sports • Hobbies • Starbucks • Restaurants SOI
CURRENT CUSTOMERS
PROSPECT MARKETING FUNNEL
STRUCTURED REFERRAL NETWORKS
VERTICAL VENDOR CONTACTS
PERSONAL INNER CIRCLE CONTACTS
PAST CUSTOMERS: REPEAT BUSINESS AND REFERRALS: CHAMPIONS, ADVOCATES, CLIENTS, CUSTOMERS
Maximum Value Home Selling System
• Internet Leads/Direct Marketing • PPC/SEM • Natural Search/SEO • Direct Mail • Direct Response Print • Third Party Leads • TV • Radio • Outdoor Media
EXTERNAL MARKETING
® © 2009 MaxAvenue® MaxAvenue Lifetime Customer Value Ladder™; Maximum Value Home Selling System®; Get the Price You Deserve for Your Home™; Release 2.0 Get up to 5% to 15% More Money for Your Home™ among others are trademarks of MaxAvenue®.
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