Referrals work best for new agents
I know, I know. You’re told you have to be in business for a long time to get referrals. That’s just not the truth. Not if you focus on them. I’ve been thinking about this for a while because I started out working by referral in 2003 and I know it’s possible but I think I might have an answer as to why and it comes from human behavior.
You becoming a real estate agent is a new idea to most of the people who know you.
You probably started out in this business as a second career. A lot of real estate agents start because life threw them a curve. They got laid off or downsized and needed to find something new to do. They wanted to be their own boss, enjoy the unlimited income and flexible hours. Some had left the workforce and are looking for a career with a low cost to start and real estate seems easy. I think there are very few agents who start out that way. Maybe those whose parents or other mentors are agents, but not many others.
The point is for most of us, it’s a new idea we have to sell to others for us to be agents. It’s an innovation in thinking and that’s the key to this idea.
There is a theory called Diffusion of Innovations that just might apply to this. Let’s see how it played out for me and some of those I have coached.
When I decided to switch careers from engineering to real estate sales it took a bit for my wife to accept it. I’d been an engineer my whole life. She said later she thought it might ‘burn out’ in a few months but it didn’t. I’ve been doing this since 2003 and I’m glad I made the switch.
That was my first sale, to get my wife to accept the switch.
My motivation was to stop the insane amount of travel I had to do as a software engineer working in the automotive industry. Most of the time I was home 4 days a month or working 80 hours a week if I was home. Not a good way to be.
The second group I had to convince were the people who knew me. My expectation was they’d all just do business with me because I had my license.
(Oh, young Padawan, that is not how this works.)
As I introduced folks to the idea of me selling real estate there were a few who trusted me from the start. Let’s call them the innovators from the curve. They trusted me from the start because they knew me. Close friends who were a big support.
My introduction to those folks was a conversation. I told them clearly I was making a switch and I got referrals from them almost immediately. They were the source of all my deals the first year.
When people say you can’t work by referral from the start, that’s only true if no one trusts you now.
The next larger group were folks who I thought knew me, trusted me to figure out what I didn’t know and to do my best. The idea of me being an agent was new but I wasn’t.
There were 300 people I had names, addresses, and phone numbers for and enough of a relationship I could talk to them about something other than the weather. I thought they’d be the Early Adopters. I was wrong.
I was able to find some early adopters by using a script and it turned out 70 of the 300 were. That got me from 7 deals in year one to 20 deals the next year but I had more work to do to overcome resistance for the rest of those folks.
As I did the work and figured out my message, I was able to penetrate into the Early Majority category of the curve. That’s where the rest of the 300 was.
What I found was the more I focused on the folks I knew, the more referrals I got or the more those folks used me to help them with their own deals. Both the Innovators and the Early Adopters came into my Sphere of Influence (SOI) quickly and the Early Majority continue to come into my SOI as I meet them.
It turns out, that is enough to have a great business. It depends on your goals.
My goal was never to be a mega-agent. I wanted a good business and learned I could get that from my SOI. I have since discovered if you have a good solid connection to 100 people, you can expect between 20-30 deals every year. It all hinges on the quality of the relationships, not the numbers in your database. That can scale as you add agents to a team or you can just be the solo agent with an assistant. It’s up to you.
Because I focused on people who knew me and I built trust in those folks, I never resorted to cold calling or trying to deal with the general population for business on the right side of the curve. I seldom compete with agents and found it is a great way to work. I never have to market to the ‘masses’ and that saves me time and money.
One of my frustrations is to see new agents get thrown into the deep end and try to ‘brand’ themselves into a business or to buy ads and work with folks they don’t know. They focus on the right side of the curve. It takes a lot more time and money to penetrate that side. You’re competing with every other agent out there and it’s exhausting. The more you focus on the few that really know you, the more you get to work with folks who know you, like you and trust you. You get to be yourself and that is attractive to the folks who know you and the ones you meet that like you right off.
With the right focus, you can work by referral, avoid the masses, and make new friends as you go. Otherwise, you have to focus on the ‘Majority’ and even the ‘Laggards’. (I think that’s where FSBO’s live but I’m not sure.)
If you want to talk more about this, I’m open to a conversation. It is after all a theory I have that explains my success in this business.
I mean it.
If you want to schedule a call you can click on this link. It will take you to a calendar where you can request a time block. I’ll accept and we’ll get on Google Meet or Zoom to talk face to face.
This is free and it might just help if you’re stuck. No strings, no pitch, just someone to listen and maybe get you unstuck. Besides, I’d love to talk about this with someone who is sincerely curious and wants to pursue this business the way I did.
I’m here if you want to reach out.
I hope you will.
Thanks for listening,
678-616-1578 Direct Line
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