Sphere of influence in real estate – why market to your SOI list for realtor seller leads?
Why market to your sphere of influence is an interesting question. What I find is that most realtors don’t really understand it. Here is what happens. We have a list of people that are potential motivated seller leads and we say, “Well, I’ve got these people I know. I’ve got these real estate leads that I buy. Obviously, the real estate leads that I buy and the real estate leads that I generate are probably more profitable than just targeting people I know.” But it doesn’t work that way and the reason is simple.
Identifying your sphere of influence to generate more real estate leads
The most important part of marketing for real estate agents is getting that prospect to actually trust you as their realtor. If you’ve never met them before, then there is never any trust developed. What happens is you’ve got people on your list (we call it the sphere of influence list but really it’s a lot more extensive). You’ve got past clients, sphere of influence, friends and family, people you know (neighbors, people from church / temple / synagogue) etc. Here is the key delineating factor between one group that doesn’t produce as much versus a group that produces a lot. The most important difference is that they’ve met you.
I was talking to a real estate broker and he said his sphere of influence was 35 people. I said, “Hold on! You’ve been selling for 25 years and you only know 35 people?” What he was doing was saying that his sphere of influence was this very narrow group. What I would like to do in order to create more effective real estate marketing tools is expand that out if I can.
Expanding your sphere of influence as a part of your real estate marketing strategies to get more seller leads
This group should be the people you have met, people who know you and therefore, you’ve developed a higher level of trust in their eyes as a real estate agent. Let’s define that as your sphere of influence or your personal contacts. If we take your personal contacts, why do we target them? The simple answer is that they are 8 – 10 times more responsive than any other contact you have. If you can contact that 8 – 10 times more responsive list on a consistent basis, you are going to get a lot more sellers and transactions.
Let me back this up with one more data point. A national survey was done by an organization. What they wanted to understand was how many sales a year do you actually get from your personal contacts? They surveyed thousands of agents across the country. They got all the results back and tabulated them. What that found was that once you cross a threshold in terms of how consistently and significantly you touch that list, the average agent in that list… get this… got 17 sales a year for every 100 people on their list. That is huge. Half of that is probably direct and the other half is typically from real estate referrals. That includes sellers side transactions and buyers side transactions.
17 transactions a year for every 100 people! You can’t get that anywhere else, with any other real estate marketing products.
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