Our focus for this summer has been the pillars to success in real estate and the bedrock foundation of customer service that all four pillars are built upon. So far, we have covered personal development and strategic planning. Now we move on to pillar number three, lead generation.
As real estate agents, we are in the business of generating leads. You can call it customer acquisition, you can call it generating new business or opportunities, you can call it whatever you want but it all boils down to the same thing and it is not negotiable — if you want to succeed.
Most agents struggle to find success because they simply do not generate enough leads. They may generate 20 or 30 a year when they need to be generating that many each month if not more. If you are not in the business of generating leads, well, you won’t be in the business very long.
‘I work by referral’
I don’t know how many times I have been in a class or teaching about lead generation and I have had some dude (yes, it is usually a man) pipe up in the back row with this dismissive statement: “I don’t need to lead gen I work by referral.”
Yeah, OK, Bud. You and everyone else on the planet. So what? We all work by referral. That doesn’t make you special and it sure as hell doesn’t mean that you can ignore marketing or prospecting.
I see and hear this refrain most often from agents who don’t want to prospect and market for new referrals as they would rather sit back and wait for the phone to ring. Inevitably, the phone stops ringing if they are not proactive.
People refer you because you provide excellent service and because you follow up, keep in touch, and continue to provide value long after the sale is completed. Don’t forget that everyone knows eight to 10 real estate agents and it is certainly a “What have you done for me lately?” world out there.
Why do so many people ‘fail’ in real estate?
Over 75 percent of people who get their real estate license are out of the business in two years. Of that group, there is another huge percentage that doesn’t make it to their fifth year. Why? The answer, which can be somewhat surprising in its simplicity, cuts to the core of what drives success in any sales profession or business venture.
Most people fail in real estate because they do not generate enough leads. They generate a few dozen leads a year when they need to be generating hundreds of them. They might summon the courage to make a few phone calls per month or push out a mailer every quarter; meanwhile, they need to be making five to 10 calls a day, mailers every few weeks, and hundreds of social media and text connections per month — in addition to the plethora of strategic initiatives to drive future business.
They simply fail to do the work with enough consistency and volume to find success. They don’t sow in planting season, they don’t water and care for their crops, and when it comes time to harvest they are left empty-handed.
Very often, even when people do figure out how to generate leads consistently themselves (personally), they have an extremely difficult time transitioning to building a business that can generate leads independent of their prospecting time. This leads to burnout, frustration and an overall reduction in client services and customer satisfaction.
Contrary to what I was told for years and what is still being peddled today by many coaches and trainers, real estate is not a sales business driven by numbers alone nor is it a relationship business where you only have to be good at building relationships but not sales. It is both a sales business and a relationship business.
As it is practiced by the best agents in the business, real estate is a specific category of relationship selling marked by long sales cycles, enormous amounts of uncertainty (where trust and rapport are critical), conflicting messages and extreme competition. While most people know a dentist or two, and maybe one car salesman, everyone knows 10+ real estate agents.
It is not enough to have a massive database and do a lot of marketing if you provide bad service nor will you succeed providing great service if you don’t also work every single day to generate leads and ask for the sale. Success demands that you balance these disciplines and become great at them both if you want to rise to the top of the industry.
A key question that I used to ask myself and keep on a sticky note in front of my face every single day: “If real estate is a business about building and nurturing relationships, then what new relationships you are starting today and what existing relationships are you nurturing today?” Keyword? Today. What are you doing right now? Take action.
The foundation for success in generating referrals (leads) is not going out and meeting as many people as you could possibly meet. It is not a special combination of words or phrases that unlocks the key to the magical kingdom where people do what you want them to do. Neither is it buying hundreds of leads or having them given to you by someone who doesn’t value them enough to work them personally but will gladly have you work them on their behalf.
No, the foundation is something simple but very difficult. The foundation is your habits. Specifically, ingraining the habits of:
- building relationships
- following up with people
- answering your phone
- never letting the conversation die on your side of the court
- doing what you say that you are going to do
- educating yourself
- executing your prospecting and marketing activities with consistency.
A quote to ponder
“By far the most efficient approach to deal with your leads is always to use a process that automatically brands you, supplies worth to your prospects, follows up with them and sorts out the uninterested people.”
It doesn’t matter how many new people you meet or how many new leads are given to you, if you don’t already have the correct habits, the correct systems, those leads and those people will be like so many grains of sand slipping through your fingers. The magic, the conversion, what matters is never in the introduction or the first meeting. It is the second, the third, the fifteenth contact you have with someone.
The consistency. You doing what you say you are going to do. The follow-up.
I equate it to pouring water into a jar that has holes in the bottom where it doesn’t matter how fast or how much water you pour into the jar, it runs out just as quickly. This is a miserable way to do business and it is a recipe for failure in real estate. It is also a very common way to do business in real estate.