Last Updated on April 29, 2020
You know that feeling you have right now that says “where is my next listing coming from?!”. That sense of urgency right there in the pit of your stomach is what usually triggers agents to make a pivotal mistake.
The pressure to chase listings builds to the point where you feel you have no other choice but to spend your time working seemingly fruitless leads, by the dozens. Take a look at your contacts – how many people are you marketing to that you don’t personally know, or weren’t referred to you by someone you personally know? How’s that going for you?
There’s certainly some short term potential in this approach, but leads that don’t already know, like or trust you, are far less likely to do business with you in the first place, and you can just forget referrals altogether.
Be real with me – how much of your time are you spending building bonds with the people that are most likely to do business with you, versus working cold leads?
If you’re not focused on a core group of people you have actual familiarity with, I have bad news… you won’t break $100k this year (or any year) unless you’ve mastered the art of marketing to 1,200 people a month. I’ll be honest, even professional marketers have a challenge successfully managing a list this size.
Here’s the good news though… this doesn’t have to be your life!
The Numbers Don’t Lie
The average conversion rate for cold leads is somewhere between 2 – 5%, but I’ve heard of rates below 1% for internet leads… this is what I mean by fruitless prospecting. Especially if you consider the rate of conversion for solid leads is 20% – and 50% for referrals!
I don’t even think this needs to be said at this point, but working cold leads is clearly not a good use of your time in any capacity. It’s old-world business, and frankly it’s counterproductive to building the bonds necessary to sustain a six-figure income year after year.
So, what do you need to capture $100,000 in commissions each year? Here’s a quick break down of the math:
$100,000 income goal
➗$6,000 average commission (3% on a $200,000 sale)
= 17 transaction sides to meet your income goal
17 transaction sides to meet your income goal
× 7 years average between buying/selling a home
= 120 contacts you must bond a real relationship with – I added 1 for good measure 🙂
You see, you don’t need to focus your energy on so many people, you just need to focus quality energy on a few good people. And in doing so, you’ll see much higher conversion rates with any contact that you put energy towards.
Your Personal Market Share
Relationships are a key part of your real estate production, in-fact a whopping 78% of people do business with an agent they actually know. These people are what make up an agent’s “Power List” (those most likely to do business with you because they know, like or trust you) and the secret to maximizing your production lies within that Power List… and how well you’re able to control the percentage of business – or your Personal Market Share – that comes from it.
Simply stated, the greater your personal market share is, the fewer contacts you need to have to achieve your income goals. Here are a few examples of how your personal market share affects the number of contacts you need to work:
3 Steps to Successful Relationship Marketing
Once you’ve got your Power List squared away, you need consistent and meaningful contact with them in order to maintain any bond or grow the relationship further. Optimal contact frequency is every 21 days, but slip past the 30-day mark and you lose that bond with about 10% of your contacts each time.
I get it though, it’s kind of weird and uncomfortable to advertise and market to your close friends. You don’t want to burden them or take time away from their day to sell them something. You know this type of marketing. It’s everything that you see today that’s highly-designed, overproduced and what I’ll just call Burned-Out Marketing.
Instead, to effectively follow up with your Power List you really need personalized, down-home communication that specifically resonates with your audience.
This really comes down to a 3 step process that I’m going to outline for you. Stay with me here, because this isn’t just another “3 step system” – in fact, it’s worked for thousands of agents just like you, for decades. So, what are those 3 steps?
STEP 1 – Get Contacts to Open and Read Your Content
Make sure the delivery looks personal: either mailing in non-commercial envelopes, or emailing using a plain text template. The design of your marketing should look as if it was created by you – trust me, this works best! Content should be valuable and beneficial to your audience, engage readership, and reinforce the relationship, not be about you, or your brokerage.
Include minimal real estate content – say what?! Real estate content only applies to people when they’re actively thinking about buying or selling (remember the average is every 7 years) so you’ll want to keep it brief to position yourself as their trusted expert, but the rest of your content should focus on other topics that have relevance and meaning to their everyday lives.
STEP 2 – Bond Real Relationships
Having a real relationship with people is the strongest differentiation you can make between yourself and other agents, and is ultimately how you win business. You bond a relationship with reciprocity, so that when you give value it creates obligation, which creates reciprocation. Executing the reciprocity model with marketing means doing things to appreciate, serve and recognize your clients, especially when they refer business to you.
Pro Tip! Recognizing those who have sent you referrals tells people you are actively doing business and creates confidence that you are the trusted expert.
STEP 3 – Motivate a Response
Here’s the one thing you need to know about getting a response from anyone in your contact database: NO ONE will respond unless there is a specific, meaningful, and self-serving reason to do so. Always include direct response offers in your content, and make sure you have referral programming built into your marketing so people actually have an incentive to act and send leads your way.
I’m covering all of this in more depth in my upcoming webinar: “The #1 Money Making Secret of The Most Successful and Respected Realtors in the World” and best of all, I’m offering it to you at no cost.
If you don’t have time to check out my webinar, at least check out this unique tool that combines all 3 of the above mentioned Relationship Marketing Strategies into a simple, pre-done system for you: the Service For Life! Newsletter. When you combine all of the strategies to stay top of mind with your Power List, you just can’t lose!
Focus on Who You Can Best Serve
In the current market you have to stay focused on where your business will actually come from, and stay tuned into the people you have the greatest ability to help. Stop chasing leads and start bonding more relationships. This approach to marketing has a way of building momentum, and I promise you one thing – as one client refers another, you will realize the exponential potential that relationship marketing has for your business, and never chase a cold lead again.
4 thoughts on “The Power of 119 Contacts: Stop Chasing Cold Leads”
What does the Service for Life Newsletter Cost. Can you send me the latest copy for my review and options for deliver. Thanks. Dee Grisamore
Thanks so much for the interest Dee. I emailed you directly.
I have to keep reminding myself … I’m in the marketing business aka people business. Staying in contact with your SOI is a form of marketing, in my humble opinion. Staying in front of your SOI is building a relationship as Mr. Camelio so eloquently put. Staying the course is building confidence in yourself.
Without you, who is there?
Thanks for the ear.
You’re very welcome Tom and thank you!
You’re 100% right – I think a good thing to keep in mind is that the people in your SOI are there because they want to be. You can’t really force people into your sphere. So take some confidence from the fact that these people like you and trust your opinion.
It’s more about making sure people don’t fall out of your sphere once you’re there as anything.
Hope this helps – and definitely appreciate the comment. Hope all is well.