So you hear over and over again in real estate…
“Build a database”
“Keep track of all your clients”
“Make sure you label your A, B, C clients and organize them efficiently”
Every real estate agent should learn how to build a database, but today I want to tell you the what the purpose of building a database really is.
It’s to transform your database into your audience! There is no point of learning how to build a database unless you want it to become YOUR audience!
Wait, what you say? What’s an audience?
A database is a collection of names and addresses that you organize into some kind of CRM or spreadsheet.
An audience is formed when your database transforms into a referral machine.
A database is just an organized list of contact information made up of the people you know in life. It’s worth nothing unless you can detract referrals and repeat business from it.
An audience is an organized list of relationships who send you referrals and repeat business and want to hear what you have to say regularly. It’s worth GOLD if you can effectively create one.
Many agents have databases, but not too many have an active audience.
Build An Audience & Business Will Come To You
How much is each person you have a relationship with worth to you? A wise man once told me that if I had more than two TRUE friends in my lifetime, that I had a good life. At a younger age I thought that was absurd and that I had hundreds of friends, but in reality I didn’t. I had hundreds of relationships.
My relationships in life are what got me into that “hard to get in” restaurant or how I got those tickets to that “sold out” game or concert. My relationships are also what my real estate business is ultimately based upon.
Your relationships are what will get your real estate business to start generating direct sales and referrals quickly! Real estate is a belly-to-belly business and most consumers tend to hire agents they know personally or are referred to because consumers want to work with someone they trust and LIKE!
Relationships are what you have with people whom you personally like or they like you. If you don’t have many relationships it’s going to be difficult to run a real estate business based upon referrals.
The only reason people teach you how to build a database is to transform it into an audience!
When you collectively market all of your relationships, they will become your AUDIENCE.
Now, I ask you again, how much are each one of your relationships worth to you? If you do not have a system in place to develop, nurture, and stay in front of your audience consistently, the chances of your database “forgetting about you” when the time comes to buy or sell a property increase. They will also “forget” to refer you to anyone they know who may need your services as well.
People buy real estate from people they like, but more importantly people USE agents they remember! You need to consistently stay in touch with your audience if you want it to create referral business for you because…
2 Types Of Clients Generated From Marketing A Real Estate Agents Audience
The entire reason to learn how to build a database is to transform it into an audience otherwise don’t waste your time.
When you market your audience, you must first understand that you will receive two types of clients from it.
The first type of client will be someone within your audience who needs to lease, buy, or sell a property. They contacted you because you were the first person they thought of when they needed a Realtor because you do a good job keeping your name in front of them.
Remember that in real estate, it’s inevitable that someone will eventually move. It’s a matter of time, not a matter of when. You are essentially farming your relationships so that when the “move time” comes, you are remembered.
You will not build a solid referral and repeat business practice without first learning how to build a database, then creating an audience out of it.
Most agents don’t understand that their database actually WANTS TO REFER them business. Marketing your audience for referrals is the primary reason why you learn how to build a database in the first place because….
Your Relationships Are Worth $20,000+ Each!!!!
In the Chicagoland area, where I am located, the average time someone lives in their home differs in the city limits than in the suburbs. In the suburbs, the average person lives in their home for 6-9 years. In the city, the average person lives in their home for 3-5 years.
I like to call marketing your database/audience “mathematical marketing” because it’s just a matter of when they need you or share your name with someone who does.
Regardless of the time a person lives in their property, the average person will buy 3-5 properties in their lifetime. If each person you know buys 3 houses at an average sales price of $250,000 that equates to roughly $18,750.00 in total potential commissions just from a single relationship.
What is the average time someone remains in their house before they move in your market?
The second type of client you will receive from marketing your audience is someone who is referred to you. Imagine all of the possible referrals that take place amongst your audience on a daily basis. How many opportunities do they come across to possibly refer you business?
How many referrals do you think your audience can send you over the course of your career? The problem most agents have when learning how to build a database is understanding the reason you are told to do so.
Your database or audience should primarily be marketed to for obtaining referrals.
You can program your relationships to refer you clients, but it takes a system to do it. The entire point of creating an audience and marketing it consistently is because it’s like having 200 part time sales people working for you at all times. When they come across someone who is looking to buy or sell a property they WILL refer you if you are remembered.
Many agents want to go and build a big fancy website that with the push of a button will spit tons of business to them, but the largest source of business is right in front of them.
You must look at all of the relationships you have as dollar signs! Real estate is an industry where every single person you know is a potential client.
We all need somewhere to live don’t we?
It’s only a matter of time until people move. Think about how many people in your audience right now know somebody who may need your services in the next 12 months?
Think about that…
Do you want to learn how to build a database yet?
Why do 50% of agents who get their licenses not make it in real estate after 2 years?
The answer is: Lack of leads.
Of the 50% who do make it, why do half of those agents not make it past 5 years in real estate?
The answer: Lack of leads.
The majority of top producing agents are great marketers and networkers.
They market themselves as their brand with real estate being their product. People do business with people they like and remember. You must fully begin thinking as a marketer if you want a career in real estate that thrives from referrals and repeat business.
Referral Marketing is the most important, streamlined, and cost effective type of marketing you will use in your career.
Take a look at the following chart to show you the sources of business for agents today:
38% of ALL agent business was referral based (actually, 8% is strategic alliance referrals, which would be 46% of total business).
Where do you think you should spend 38% of your marketing budget?
How about 8% of your marketing budget towards catering to your strategic alliances like attorneys, lenders, and title companies?
The second largest source of lead generation is 23% from repeat business! Marketing to your audience also encourages repeat business too!
Did you know that the vast majority of people who buy or sell a home forget their agent’s name in 6 months?
If you work with someone and they like you, they will work with you again for their next transaction and send you their referrals if they remember you.
YOU GET “REMEMBERED” IF YOU STAY IN TOUCH WITH THEM THROUGH REFERRAL MARKETING
According to the chart, repeat business and direct referrals account for 69% of agent business. I think you can now see why, if you want to receive many referrals and repeat business, you will need a system in place to streamline your Referral Marketing.
Building an Audience Works In Any Business!
Take a look at Best Buy or Bye Bye Baby for example. One of their most important channels of marketing is their email and direct mail list.
Who do they market?
They email and send direct mail their past customers to stay in touch with them on upcoming sales, keep them informed with great content, or just to stay on top of mind with their customers.
They stay in touch with their audience and as a result that drives sales. These brands also use other channels to “remind” their database of their existence such as Facebook, Twitter, and other social medium platforms to stay in touch with their audience.
If you sit back and think about it, it’s very simple. They build a list or a following (an audience) and then consistently market to that list while continuing to grow it. As a result that drives sales and their bottom line increases.
This is the basic business plan of any large or small business that understands the power behind relationship marketing.
This concept is no different than in your real estate business.
You are probably thinking well, I’m not Best Buy or Bye Bye Baby and don’t ever plan to be.
OK fine, let’s look at another example of a local business.
Let’s take a local pizza parlor and check out their marketing plan. Have you ever gone into your grocery store and come out and see a menu under your windshield? Local restaurants and businesses advertise and market locally because they know that’s where their business comes from.
The people who live and work in the areas where they are located are their AUDIENCE. This is why they search out their local residents and market them consistently whether it’s a menu under your windshield, a coupon sent in the mail, or a consistent e-newsletter that someone may have signed up for last time they ate at that restaurant. The same fundamental concept applies virtually to many successful businesses.
A Real Estate Agent’s Audience
Now let’s talk about the audience of a real estate agent. Don’t make this complicated and keep it simple. Your audience consists of everyone you know or know of. Your audience is your friends on Facebook, your wedding list, your neighbors, and even the other parents your kids go to school with. It’s anyone you would expect to use you for their buying or selling needs or refer your services.
Our product, real estate, is not a service people use frequently, but that does not mean we lose touch with them. Our audience will use our services when they need them IF we consistently stay in front of them. The goal is to not be forgotten!
More importantly, marketing to our audience will encourage referrals for our services to their friends and family members. This is fundamentally the most important concept to grasp for a real estate agent if you want your business to run on referrals and repeat business. Facebook, Linked In, email, and direct mail, serve as channels that allow us to communicate with our AUDIENCE consistently and stay on top of mind.
Real estate agents who embrace this concept and market their audience or relationships will develop a consistent stream of business.
Do you think if you systematically marketed your audience 50-80 times a year that you would get more business? I’m telling you that YES YOU WILL. If not then why would a large corporation like Best Buy or Bye Bye Baby be using the exact same concept?
Once you understand how to build a database, you need to start marketing it! Do it consistently and you will build an audience. Want to know how to “market your audience? Check out this article below.