Hierarchical-customer-management systems let you follow your referrals

Zagros A. Bigvand, founder and CEO, Stazzle.com

As published in Scotsman Guide's Residential Edition, January 2008.

Customer-relationship management (CRM) is a broad term for the tools an organization uses to manage its customers, contacts and vendors, as well as its internal and external processes. The key purpose of CRM technology is to build and maintain a strong referral base of customers.

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As many brokers will attest, referrals can represent cost-effective, sustainable production, as well as future profit. In other words, without a plan to manage, organize and reward its referral base, a business can plan to fail.

In the past, those brokers who understood the importance of maintaining contact with customers may have attempted to reward their referral populations through unscientific and generic processes. For example, a broker with 500 clients and a $5,000 gift budget might have sent the same $10 gift to each client. Although the broker was smart to send gifts, the effort was not used wisely if the client who sent the most referrals to the broker that year received the same golden nugget as the client who sent the fewest.

This can be avoided by using a CRM system that manages clients in a hierarchical fashion. Known as hierarchical customer management (HCM), this form of data management tracks and organizes customers based on their referral source. The hierarchy takes a system of individual contacts, including their vital data, and ranks the clients according to the original individual who referred the business.

HCM gives users a visible tree that shows where their business originated, much like a family tree delineates ancestry. This tree can apply to many aspects of a broker's business:

• Managing Realtor relationships: Strong broker-agent relationships are vital to both professionals' business. If brokers send enough clients to their agent-partners, and vice versa, their businesses can become 100-percent referral-based. With HCM trees, brokers can track the referrals that real estate agents send them and make sure they refer clients back to the correct original source. That way, they can reward those agents accordingly.
• Sending client gifts: Brokers face the mounting task of not only remembering clients' birthdays, but also of choosing appropriate gifts for these clients, all without wasting marketing dollars. HCM trees can help keep brokers' gift selections appropriate and objective. For instance, a broker may decide to send some clients flowers or chocolate, others birthday cards and others only a birthday e-mail, based on how much business the customers have referred. The broker can look at each client's HCM referral tree to determine which clients are worthy of which gift.
• Tracking advertising returns: Many brokers advertise in many different places -- usually some combination of local radio, television, Internet and print media. HCM can help manage how effectively their advertising funds are spent. When a new lead calls, these brokers should ask where the person heard about their services. They can then enter this, along with the client's other information, in an HCM tree organized by media type; specific station, site or publication; and date. Each quarter, brokers should export this information and objectively decide -- based on dollars spent and returned -- on which media they will focus in the following quarter.

HCM can offer everything traditional CRM offers -- with the addition of visually tracking one's referral tree. It also allows more scalability and can give brokers greater command of their customer base. As such, brokers who take advantage of HCM to track their relationships can likely develop stronger relationships with their past and future clients.

Zagros A. Bigvand is the founder and CEO of Stazzle.com, a leading hierarchical-customer-management (HCM) solution for sales professionals in referral-based industries such as real estate, finance and insurance. Stazzle.com's patent-pending HCM technology is a free, Web-based solution created to fill the void and complement leading customer-relationship-management services. Stazzle.com is one of the fastest-growing Web sites on the Internet. To learn more about Stazzle.com, contact Bigvand at ZBigvand@Stazzle.com.