At one point or another in their careers, most real estate agents consider purchasing a contact management system to help them manage their businesses. It can be an overwhelming decision – so many to choose from, offered in various platforms and formats all promising the world in features and benefits. And these features and benefits come at a cost, of course. That cost ranges from $10/month to $35/month to $90/month, or, for desktop-based versions, a one-time charge of $300 or more plus annual upgrades.

This can be a sticking point for many agents, especially those who are struggling. I hear it all the time. "But I can’t afford $35/month for a contact management system!"

Yes, times are tough. Budgets are tight. Every dollar coming into the household (or not, as the case may be) must be accounted for and spent wisely. I understand that and frankly, I’m impressed with agents who don’t just jump on a bandwagon to spend spend spend just ‘cause someone told them they should. But there are two things to consider.

First, you should never purchase a system, tool or program that you don’t believe will not cover its cost, either in hard dollars or by saving you time (with which you can go out and earn some hard dollars). I will never recommend that you purchase anything for your business that won't, at the very least, pay for itself (assuming you use it), with the goal, of course, being that it pays for itself many times over.

Second (brace yourself, this might sting a little), you are in business for yourself. You are self-employed. You made the leap of faith into selling real estate knowing (hopefully) that you would no longer be protected by that regular-salaried, benefits-included, vacations-paid J.O.B. you left.

Selling real estate professionally is not a hobby. It's not (hopefully) a side gig that you do because you have a little spare time. It's your career; it's your profession. And it's up to YOU and YOU only to invest in the tools you need to be successful. And if you're at the point where $35/month breaks the budget, it might be time to re-evaluate whether or not you're doing the right thing by you and your family by being self-employed at this time.

That said, if you spend $35/month for a contact management system, will you automatically be successful? No, of course not. Especially if you don't use it! Do you HAVE to have Contact Management to survive as a real estate agent? Again, no, not at all. But if you bite the bullet and invest in yourself and your business by committing to a good contact management system, it will change your professional life.

And you should fully expect it to pay for itself, many times over.

How so?

There are two general ways a contact management system pays for itself. The first is by managing your conTACTS and the second by managing your conTRACTS.

Managing Your Contacts A good contact manager should enable you to create and maintain a database of everyone you know, obviously. But it's what you do with that database that will make you money.

What can you do with your database to make money?

You can remember and acknowledge birthdays of the people you know. You can print out a list of those in your social network and ask two people from that list to lunch every week. You'll have a handy place to enter the contact information of new people you meet and add them to your go-to-lunch-or-coffee activities or send them your monthly mass-email and annual calendar. You can take notes on conversations you've had with friends and acquaintances and set a reminder to follow-up with them in a week or two to "see how it went" (whatever the "it" is).

Simple simple stuff! Yet, without a contact manager, even a rudimentary one, most of these easy, friendly, stay-in-touch activities simply won't get done. And it’s highly likely you'll forget all about 90% of the people you're meeting out there in the world...and they'll forget about you. A year goes by ... and two ... and three ... and then you wake up one morning and realize you've lost thousands of dollars in commissions because you lost touch with most of the people you know, and never followed-up with all those people you've met. You didn't mean to, of course, but without a contact manager, it's tough to do even a marginally good job of keeping track of those Very Important People In Your Life who can send you business.

If you don't have (and use) a contact manager, I'll bet you've lost over $10,000 in potential paychecks every year you've been a real estate agent. Probably more.

The second way a contact management system will pay for itself is by helping you stay on top of your transactions - that is - conTRACT management. And this will pay for itself in multiple ways as well!

When you're on top of your business, your clients are being well-taken care of - and they will notice! When you do the things you promised to do when you promised to do them; when you contact your client with updates before they have to contact you; when you head off problems before they even arise; when you always appear to be on top of their transaction - you'll have yourself one (or a dozen) impressed client(s) who will be delighted to spread the word of your impressiveness to the world.

But what's really sweet about having and using good conTRACT management is that you won't drop the ball - at least - not nearly as much as you might without it. When you have fully customized checklists and action plans keeping you on track, things don't slip through the cracks. And when things don't slip through the cracks, you don't have to open your checkbook to fix problems nearly as often. For example, once I got to pay for a thorough housecleaning on my listing after the seller moved out because he "forgot" to do it. So, my Listing-Under-Contract checklist now includes "Verify that seller has arranged cleaning after move-out."

Another time, I got to write a check because I hadn't verified that the HOA fee advertised in the MLS was correct... and it wasn't. We didn't find out until we were all sitting at the closing table and my buyer was, to put it mildly, annoyed. The listing agent (who made the error) wouldn't ‘fess up to his mistake, so it fell to me to make things all better. Which I did, to the tune of over $500. Now, right there on my Buyer-Under-Contract checklist is a line that says "Verify the HOA Fee."

So, the moral of these stories is to assure you that if you commit to using a contact management system in your business, it will pay for itself. Over and over. I promise.

Published: February 24, 2011

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Jennifer Allan-Hagedorn was a top producing real estate broker in Denver, Colorado before writing her first book in 2007. Since then, she has written several more books about the business of selling real estate including her flagship book: Sell with Soul: Creating an Extraordinary Career in Real Estate without Losing Your Friends, Your Principles or Your Self-Respect, the sequel, If You're Not Having Fun Selling Real Estate, You're Not Doing it Right and her latest, to be released in Spring 2011, Prospect with Soul for Real Estate Agents. Jennifer believes that the secret of success for real estate agents is not in aggressive marketing techniques or hard-core sales pitches, but rather in being competent in one's craft. Competence begets Confidence. And in today's world of increasingly suspicious and ad-weary consumers, having an air of self-assurance and enthusiasm will be far more effective than a slick sales campaign. Jennifer writes and speaks with this philosophy in mind. She preaches that salespeople should follow the Golden Rule in their day-to-day practice of business - treating clients and prospects respectfully, as the salesperson him or herself would like to be treated. Being competent, reliable and fair, and motivated by a true desire to earn a paycheck, not just show up at closing with hand outstretched. She is a regular contributor to several real estate newsletters and magazines, a member of the RE/MAX Hall of Fame and one of the industry's most popular bloggers. You can learn more about Jennifer's "soulful" philosophies at www.SellWithSoul.com. Subscribe Below to Enroll in the Daily Seduction Newsletter Mini-Clinic - Tips and Strategies to Generate Business and Referrals From Your Sphere of Influence! Your Full Name Your Email Address