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If your approach to prospecting is not yielding the results you require then you may need to expand your focus.
There are two kinds of prospecting in real estate. Geographic-based prospecting is also known as prospecting farm areas. You basically draw a circle on a map and market to all the residents within that zone. The concept of dividing a large marketplace into farm areas and assigning those areas to individual agents is attractive, but in reality it may not be the most effective approach.
In relationship-based prospecting you focus on leveraging customer relationships. You may have a thousand people in your farm area, but no listings. That might be because you lack market share: Your farm area is too small to yield enough turnover for the income you need. It is likely you need to grow your market into a larger area, and you will best accomplish this through maintaining and building upon great client relationships.
Which of your team members would be best to convert your existing relationships in play? Should you send out a new rep to build new relationships, or a seasoned agent who already has some established relationships in the area? That answer may depend on the quality of existing client relationships and whether they have been properly maintained. For example, if you are still marketing to your past clients as though they are new clients, then you are not being relevant, frequent and consistent in your relationship with them.
Another question might be how large your farm area should be. Size could be important, but the actual turnover rate of properties in the area, plus your market share percentage, is what truly determines your possible number of listings and level of income for that area.
Traditionally the best farm areas are assigned to existing agents who are already established in those areas. That’s fine, but then new reps are assigned to new areas and expected to build market share there before they really know how to accomplish that. A more progressive approach involves the entire business working a core market area whilst individual agents work to develop secondary markets outside of that core. Then we measure growth to make sure agents are maintaining market share in their given areas.
The strategy most successful real estate agents use is to prospect both geographically and through relationships. They also work in several farm areas instead of concentrating on just one. Every person they meet goes into the database where they are placed into all categories that apply. This way automated target marketing by categories is relevant to each individual inside those categories.
Whether you focus on geographic or relationship based prospecting, it is vital that you have a system and follow it. You need a consistent marketing program that will reach your target markets with information that is meaningful to them. You must also build and expand your social proof, primarily with large numbers of your brand’s For Sale signs being visible throughout your marketplace, preferably with SOLD stickers on them. Build a strategy for getting more listings more often and follow it consistently, and you will see growth inside of your business.
I hope you’ve enjoyed today’s Coaching Tip, and I look forward to seeing you here again next week.
The BDA is a current issue of concern for me in the way you market you, your brand and your office. With agents selling in your BDA who are not active in that core area. They list, sell and then market their result within your BDA. This dilutes your investment with one benefit, the option to quote a sold property in your BDA.
Hi Pat, Market share is critical, so the more boards up the better, having said that at least great to have your name on as the second contact if it’s in your BDA, even if there isn’t any financial reward. The key – keep growing your database and service a larger area :) JP