Leads or Relationships?
We all say it and we all hear it... "I need more leads!" I've been wanting to talk about this topic for a while and a few things I have experienced over the past several weeks have finally encouraged me to get to the point. Just so you know I didn't come up with this in a vacuum, here is what has influenced me recently. A few weeks ago I attended the annual conference for Leading Real Estate Companies of the World and sat through some amazing sessions and seminars. Just last week I attended an event where Michael Maher was the keynote. I also have been staying in closer contact with my real estate coach. Yes, I have a coach and if you have thought about it but haven't pulled the trigger, what are you waiting for? Then just yesterday, Tom Ferry posts a video to his YouTube channel on this exact topic and his thinking connected with what was going on in my head.
Okay, so leads. Everyone has a different way of defining "lead." For this purpose let's say a lead is a potential customer with whom you have no prior connection with until they contact you about real estate (online leads, expired listings, call-ins, etc.). This is separate from a referral or a contact from your sphere. When we are looking for more business, many Realtors look for leads first and leverage their sphere second. Why?
According to the 2015 NAR Profile of Home Buyers and Sellers, 70% of sellers and 58% of buyers found their real estate agent through some type of relationship (referral from (or agent is) friend/family, used the agent before, referred by another agent).
Relationships = 70% of sellers + 58% of buyers
If our relationships can result in 70% of our listing business and 58% of our buyer business, why do we focus on leads so much? I'm not discounting lead sources, we need to fill the rest of the 100%, but unless you have already exhausted your relationships, why focus on leads first?
The ultimate reason is that most Realtors do not have a system. Most Realtors are on-accident Realtors and do business when if falls into their lap instead of being on-purpose Realtors with a system they can use to dial business up or down as they need.
You all have heard of the Pareto Principle (80/20 rule); this applies very well to the real estate industry. The commonality of the 20% of Realtors that do 80% of the business is that they all have a system and they all focus on relationships first. Yes, leads are a big part of the strategy but the relationships exist first. Why? Because leads turn into relationships and we are in a relationship based business. Let's not act like this business is transactional, there is just a transaction that takes place.
So, you want more leads? Develop and follow a system, build your relationships and nurture your customers.