Most agent training programs insist that Selling Real Estate is a Numbers Game - that is, in order to bring in enough business to keep the home fires burning, you have to touch as many people as you can with your name & number. The more people you touch, the better your chances of procuring a buyer or a listing.
We've all heard the mass-marketer's philosophy - you have to contact X number of people to get a lead and you have to have Y number of leads to get a listing (or a buyer) and you have to have Z number of listings (or buyers) to get a paycheck. Therefore, it takes X(Y-Z)2 x 25 contacts to have 25 closings. (I'm really bad at math, so that formula is totally made up - don't try it at home). During the course of all these cold calls (or door knocks or postcard mailings, etc.) you'll encounter loads of rejection, but the gurus claim that since it's all part of the game, you actually ENJOY each rejection because it means you're one step closer to paycheck.
Sounds delightful.
According to the Direct Marketers Association, the highest return rate you should expect for a direct mail campaign is 2%; for a cold-calling campaign, 5.53%. Keep in mind that these figures reflect how many people simply contact the advertiser, not whether or not they purchase anything. So, if you send out 1000 postcards, you can expect, at the most, 20 inquiries from your effort.
Your cost? Let's say each postcard costs you $.58 cents plus a set-up fee of $100 = around $700 total. Not bad if it gets results, but tough on the new agent's pocketbook!
Well, as you may know, I preach a slightly different approach - that is - building your business based on the personal relationships in your life... the relationships you have now as well as those you'll have in the future. I advise against asking for business or assaulting the people you know with your sales pitch and I teach agents to draw business TO them without ever pestering a soul. I believe you can bring in good leads one warm body at a time without ever treating anyone like a number (and you'll have a heck of a lot more fun selling real estate).
But, the idea that selling real estate successfully is a numbers game is so deeply entrenched in the psyche of the real estate agent, I figure... if you can't beat ‘em, join ‘em.
So, let's play the Numbers Game of Relationship Prospecting.
Let's say that instead of sending out 1000 football schedule postcards, you send ten of your friends a personal, non-salesy email. Just a "hi, how ya doing, great weather we're having, how's the puppy, let's do lunch" kind of thing.
Of those ten emails you send, what do you think your response rate will be? I don't know about you, but I'd expect 100% response rate - that is, every single person I wrote to would write me back, as long as my email was personal and even mildly interesting (this does NOT apply to mass-forwards or emailed infomercials). But let's say that two of your friends are on vacation, so you hear back from eight. That's an 80% response rate.
Now let's say that you followed up on your offer to "do lunch" and went to lunch with all eight in the next month. That's two lunches a week, if you treat all eight times, you'll spend, maybe, $200.
Will any of those eight friends buy or sell a house with you anytime soon? Maybe, but probably not (however, I can guarantee you that if they do, you'll be #1 on their list). But here's where it gets fun.
How many people do each of those eight friends know? How many do they work with, play with, talk with, drink with? Twenty? Thirty? One hundred? And how many people do THOSE people know?
See, here's the thing. By personally interacting with just those eight friends, you have effectively touched everyone they know. And with these eight lunches, you've also increased the possibility of being included in the social lives of these eight people. You'll be invited to their Super Bowl party or afternoon BBQ. Where you'll meet more of their friends...
Out of all those hundreds of people your friends know and their friends know, some are going to have a real estate need today, tomorrow and next month. A personal referral from someone they know is going to carry a heck of a lot more weight than a mass-mailed postcard received from a stranger.
Because, when you do a mass-mailing or other mass-marketing project, you aren't hoping for referrals from the recipients of your promotional material; you're simply hoping that one of those 1000 people has a real estate need and doesn't know anyone besides you to call. You certainly aren't expecting them to shout your praises to their circle of friends because you sent them a football schedule.
What if you took eight people to lunch every month?
Wow - Selling real estate IS a numbers game! I want to play!
Comments(17)