If you remember the standard catch-phrase tied inextricably to real estate, I want you shout it out with me: Location, Location, Location! Exactly.
While there are several definitions often batted about, the most powerful meaning assigned to this cliché is the perception that even the most horrid home or building is a prize if only standing in the right location. One person’s trash, and all that.
But is that still true? Was it ever true? You can have the best structure in the best part of town, for the best price, but if nobody knows about it, your chances of moving that inventory decrease significantly as the month wears on. What we should be concerned with is something much more powerful than location. You need to be building your Sphere of Influence!
Six Degrees of Separation
What is your Sphere of Influence (SOI) and how do you best capitalize on it? Put simply, it is everybody you know. And the people they know. And so on. Technically, you have and can maintain more than one SOI (e.g., LinkedIn has degrees of mutual connection), and doing so only seeks to improve your sales success:
- 82% of all real estate transactions are the result of contacts from previous clients, referrals, friends, family, and personal contacts1.
- 74% of buyers would use their agent again or recommend them to others1.
- 84% of consumers say they trust recommendations from family, friends, and colleagues, making peer recommendations the highest-ranked information source in trustworthiness1.
“Agents making more than $100,000 a year told the NAR that they got nearly one-third of their business from referrals from past clients. They got 34 percent from repeat business2.”
There is an allure in using, and a science to cultivating, an SOI to your financial advantage. Common lore would have us believe that everyone in the world is connected by no fewer than six people3. That means there is, inherently, the potential for both positive and negative interaction throughout your SOI, which can also play into your opportunities for success.
A Fishbowl Named Wanda (of Business Cards)
Knowing that you have an SOI, and putting it to use are two completely separate animals. The advent of social media has helped tremendously in terms of enlarging the pool of people to whom you are connected (be it personally, or tangentially based on commonality of acquaintance). At the outset, you need to collect and categorize your list – and preferably in one place (e.g., an Excel spreadsheet or some kind of sortable database, ala MS Access).
Create categories for corralling your friends and family, suppliers of goods/services (doctor, lawyer, HVAC repair, home renovation contacts, etc.). You’ll also want to separate past potential buyers and sellers4. You never know when someone who wasn’t in the market previously might be the exact person for the exact property you’re currently marketing. The only thing left is to start reaching out to them the way that feels most natural for your connection, whether your call your uncle, share posts with your current lead list via Facebook or Instagram, or you text your favorite home inspection agent. The key is to be short, polite, and memorable for the right reason.
The goal is to make sure you’re top of mind when they hear of opportunities which would be good for your business.
Hidden Figures
In the 70s, the Yellow Pages were marketed by the slogan, “Let your fingers do the walking.” It alluded to how much easier it was to use their directory of business versus doing the research on your own5. Well, an SOI is much the same. Location, location, location may still be important, yes. But without a well-groomed and participatory network, you run the risk of watching opportunity pass you by.
Create your network, and use it to your advantage. Don’t be afraid to expand your Spheres of Influence and include individuals (and even companies) outside your norm. Gems are found in most unlikely of places from time to time. Your usage of and dedication to your SOI could prove to be a powerful tool in your bag. The best part is that very often, that tool is hiding in plain sight.
Research:
https://www.zipperagent.com/real-estate-sphere-of-influence-best-marketing-referral-engine/ (1)
https://www.easyagentpro.com/blog/real-estate-sphere-of-influence/ (2)
https://en.wikipedia.org/wiki/Six_degrees_of_separation (3)
https://www.thebalancesmb.com/jumpstart-your-real-estate-sphere-of-influence-soi-2866386 (4)
https://baerpm.com/2012/01/06/flashback-friday-let-your-fingers-do-the-walking/# (5)
