The other day I presented seven deadly objections to running an SOI-dependent business (SOI = Sphere of Influence = People Who Know You) and asked for your comments. THANKS for all of them! JMac pretty much summarized my thoughts on the matter - actually he nailed them - eliminating the need for this follow-up blog! But I'm in the mood to talk SOI, so I'll do it anyway.
Here are seven objections I listed and my responses:
1. "I don't know anyone who wants to buy or sell right now and even if I did, how can I base my entire business on them?"
In my first year, I sold 25 houses, all to my SOI. Of those 25, all but three were to people I didn't know the day I got my real estate license. They were people I met as a result of the personal relationships in my life. Some were referred directly to me by my SOI; others I met at weddings, parties, etc.; yet others were service providers in my life who weren't my friends, but knew I had a real estate license.
As JMac alluded: Your SOI is Everyone Who Knows You and Knows that You Sell Real Estate. Not just your friends, family and past clients. And if you add up all those Who Know You and figure out how many other people they know... that's a lot of potential business! (Read Teri Lussier's great blog on this topic.)
2. "I refuse to be one of those annoying real estate agents that the family avoids at parties."
So don't be! Contrary to popular belief, an effective SOI strategy is not about bothering your friends for their business. Sure, that's a common tactic, and many real estate agents give up on their SOI because they suspect their friends are sick of hearing from them - and they're probably right. Just be a genuinely nice person with a good head on his or her shoulders... who happens to sell real estate for a living.
3. "My friends would expect a discount or kickback because they know me."
So? I do, too! When appropriate (and I do know the difference), friends DO give friends discounts or freebies! I don't have a problem making my good friends and family feel special by giving them a deal, especially if they've been supportive of my business or are frequent buyers or sellers. But in reality, it doesn't happen nearly as much as you think it will, especially if you have confidence in your value and abilities. I get much more commission objection from strangers than I do from my SOI.
4. "I don't believe in mixing business with pleasure. If the deal goes sour, I could lose the friendship."
Could happen. Probably won't, if you take great care of your business. Yes, things go wrong, but if you can fix the problems professionally and competently, you'll probably win even MORE brownie points from your friend than if the deal went 100% smoothly. Anyway, if you do a great job for someone who knows you and cares about you, you'll get GREAT PR in your social circle for it! I'll take that risk because I have faith in myself.
One caveat here - DON'T take SOI business that you aren't confident you can handle. For example, if your buddy wants to buy a strip mall, and you're a residential agent, REFER IT. I don't believe we should "practice" on anyone, but especially not on our SOI.
5. "My family doesn't take me seriously - they see my new career as just another phase."
This is actually a valid objection. Family can be tough; much tougher than friends. If you suspect this will be an issue for you, don't pursue your family's business until you've built a track record you're proud of. They'll come around (or not, which is okay too). There are plenty of other people in the world for you to WOW.
6. "I don't want my family and friends to feel obligated to use me if they don't want to."
"Obligation" is a dirty word in our business. Never ever ever think that someone is obligated to use you and don't get hurt if they use someone else. It's probably not personal (people have lives outside of our real estate business), and if it IS personal, take the opportunity to figure out why. Always give your SOI the benefit of the doubt if they don't use you - for them, it was the right decision. Respect that.
If, in your heart, you feel that your SOI is obligated to use your services, they'll feel it and resist. Conversely, if you respect their right to "choose," they also feel that and will probably beat down your door!
7. "My broker says I need to cold-call, door-knock and mail to a geographic farm - that selling real estate is a number's game, so I need to get my name out there everywhere I can."
Somehow we get the idea we need a shot at every piece of real estate business out there in order to succeed. But we don't. If this is your first year you really only need to sell 10 - 20 properties to have a banner year. That's only 10 - 20 people in your whole town who have to hire you! It's tough to get 20 clients by throwing doo-doo against a wall, especially for new agents on limited budgets. It's not likely there are 20 strangers out there sitting by their mailbox, waiting for your fancy farming postcard, but there certainly ARE 20 people in your SOI who would love to help you, if you approach them correctly.
So... there you go.