17 August 2018
Imagine you had a database of fifty contacts who are rapidly coming to “know, like and trust” you. They are past clients, current prospects, new real estate leads, friends and family, and those in your professional network.
What would that mean for your business?
Well, as it turns out, that’s fairly easy to calculate. Assuming those contacts are qualified contacts — meaning they fit the profile of people who are in a position to recommend you to others — here’s what you can expect in just a year.
Most of your contacts will know an average of three people who move each year. In the case of your professional network (mortgage brokers, contractors, etc.), that number can be much higher. But for this example, let’s be conservative and stick with three.
That’s 150 potential referrals.
If you stay in touch with those contacts in the right way, you’ll build those relationships and earn their loyalty. That means when they get asked by someone, “Do you know a good agent?” the chances are high that you’ll be recommended.
Let’s be conservative again and assume you get one-in-five of those referrals. Over that next year, that’s 30 new agent real estate leads.
Now, remember, these aren’t cold leads you purchased from an online lead generation service. Those types of leads are so chilly you could use them for ice cubes! In fact, less than 1% convert for anyone.
By contrast, the leads you get from your database are mostly referrals — the highest quality real estate leads for new agents, which have a strong likelihood of converting for you. Out of the 30 leads you generate from your database, you’ll probably close at least four.
Since you’ll likely buy and sell with some of those new clients, that results in six transactions in total over the next year.
How much commission you earn from that new business will vary, of course, depending on a multitude of factors. But say it’s just $12,000 per transaction. That adds up to $72,000 in income for you during the year.
And here’s the best part…
Those contacts will continue to give you referrals year-after-year. As your database grows, so does the number of real estate referrals and leads you get.
So, as you can see, establishing your initial database is crucial as a rookie Realtor. It’s not an exaggeration to say that growing your database is growing your business.
How do you do that?
First, you need a solid real estate CRM. This isn’t merely a place to store contact information — and important as that is — it’s also a relationship-building toolbox packed with features that will help you grow the “know, like and trust” factor with those people. For example, in a good CRM for real estate agents, you’ll be able to set automated reminders, so you don’t miss quarterly calls, birthdays and move-in anniversaries, and annual visits.
Your choice of real estate CRM is critical to your success as a new real estate agent, so choose wisely!
Once you have your real estate CRM in place, your next step is to start adding qualified contacts. Your goal should be to grow your database to 50 within the first year. You can probably add 20-30 right away. Here are some ideas:
- Clients, past and present. Obviously, you want to add clients you’re currently working with, or have worked with previously, to your real estate marketing If you stay in touch the right way, these contacts will become a prime source of referrals. In addition, you’ll get the repeat business when they move again.
- Prospects. Are you talking to a hot real estate prospect? Are you following up on a few long-term prospects? Be sure to add these contacts to your database.
- Event connections. Events are an ideal way to expand your network. At a new home buyer seminar, for example, you’re likely to meet many eager buyers, as well as other contacts. Add those to your database.
- Industry professionals. Real estate lawyers, home improvement contractors, stagers, mortgage advisors, movers, etc. Building and nurturing those relationships can result in a goldmine of referrals each year. Add those pros to your database.
- Family and friends. Not everyone in your personal network will make for a good referral source. But some will. Decide who is most likely to be in a position to recommend you to others and add those friends and family members to your database.
- Old work colleagues. They might not be personal friends, but they know you. That means they might be comfortable recommending you to others. So, just as you would with family and friends, decide who’s likely to be able to recommend you and add those people to your database.
These are just a few of the many ways to create your initial real estate marketing database — your first 50 contacts! — and start the ball rolling towards more real estate referrals.
A word of caution here…
Spending time building your database is one of the best investments you’ll make in your first year as a real estate agent. However, merely having a contact database isn’t enough. You need to build those relationships by staying in touch in just the right way.
For that, you need a comprehensive real estate marketing system designed for relationship-building and generating referrals.
So you actually have two simple investments to make as you pursue your dreams of becoming a successful agent. One, start building your database. Two, get the right real estate marketing system working for you.