Ask yourself these four (4) questions regarding optimizing your SOI referral marketing in real estate, and make a mental note of your answers.
1. Did you know that over 50% of a Realtor® business nationally is generated from referrals?
2. Do you have a marketing system in place that optimizes referrals to your business?
3. In that marketing system, how much of the budget is spent specifically on referral
4. How much time do you spend on referral marketing
If the first two questions elicited a no answer or the last two questions a none answer, then it’s VITAL that you continue reading this article; it may completely change your business for the better. That’s because SOI/Referrals are a Game Changer!
How would you feel if someone that was close to you – someone you knew very well or a close relative – used someone else to sell their home for them? We’re here to tell you how to avoid becoming that agent that gets forgotten by friends and family by following a few simple Guided Discovery rules and strategies.
Remember, it’s not your client’s job to remember you; it is completely your job to be absolutely unforgettable.
Let’s dive right in and get coaching. The first thing you need to know is what is your SOI, or Sphere of Influence. This is one of the simplest concepts for an agent to understand but is often made more complicated than it actually is. Many agents think that they don’t have a sphere of influence and feel that they don’t know that many people that they could influence. Others might reason that they don’t want to bother their friends, and people already know what they do for a living.
Some simply don’t know how to build a sphere of influence or how to get that many people’s contact information or attention. Good technique doesn’t care who uses it.
The key is to not make it complicated. Really, your SOI is simply the people that
know your name and would say hello if they saw you. Who does that include?
Your Sphere Of Influence As its name suggests, your Sphere of Influence is a circle with several layers, much like our planet.
You, of course, are the center of the sphere.
- Around you is your inner circle, the network of family and close friends that enfold you. These are the people who love you and support you no matter what.
- Beyond them are those acquaintances that make up your outer circles. Although your acquaintances may not be as familiar as your close friends, you enjoy meeting with them and they know who you are
- In the outermost layer are your professional and industry contacts—the people you do business with, and who are in a position to refer business to you too.
Your inner circle consists of your loved ones, your closest allies and your advocates. These are the people who want you to be successful in your real estate business, and they’ll do whatever they can to help you out. Typically, your strongest advocates for referrals can be found in the following categories (and, by extension, within the network of each of these people):
- Your spouse or partner
- Parents, siblings, and immediate family members
- Close friends
- Relatives who live nearby
- Close neighbors
- Former Co-workers
- Industry Contacts
- Organizations, Clubs & Groups
- Former classmates
Professional Service Providers
The point is clear; these are people you know, who know you. There should be a liking or mutual respect between you. This is you sphere of influence (SOI), and this collection of people is the main source of your referrals and repeat business.
You will not get referrals from people who don’t know you, and then if you don’t ask the people who you do know you won’t get referrals-> that’s the facts.
Think of it this way:
All of the people in the above list live somewhere, and that means that they are future
clients. They also have the potential to bring you referrals of people who might need your services now or at some point. Naturally, you’d expect someone that you had a relationship with to use your services if they were going to buy, sell, rent or invest in real estate. Couldn’t you then expect that this same person would also refer you to their friends and family who were going to buy or sell and needed a great Realtor® to help them through the maze of a real estate transaction?
Discovering that someone you know has bought or sold a house without your
help (like in the attached video) will be the day you’ll need to rethink your referral marketing strategy. It can be an eye-opening experience when this happens, and the best time to handle the situation is before it happens. That’s why it’s vital that you see the value of building your relationships in your SOI and make sure you remind them of what you do for a living.
Otherwise, you can’t expect them to use you or refer you to others. You are the brand and you need to create and occupy mindshare through a Hyper Sphere Of Influence approcach so that you are omnipresent without hitting them over the head with your Lockbox of Real Estate all the time.
It has been proven that the best practice for marketing your SOI consistently is to contact them at least 3 times a month. When you do this, and communicate from abundance and gratitude they will become your enamored audience, and your enamored audience will be the ones to send you repeat business and referrals.
Build Your Audience and Let Business Come to You
In order to build a strong, solid customer base, any business needs an audience to drive
sales and make the business “machine” go creating. For a realtor, their sphere of influence is
that critical mass audience. While it’strue that marketing to an SOI can feel awkward or uncomfortable at first for some agents, it’s proven, by far, to be the best way to gain business and increase profits. In fact, it’s a necessity if you want to have a lengthy career working in real estate. It’s called called creating a book of business. Modern technology, including Facebook, Instagram, YouTube and LinkedIn, especially with videos, has made this type of marketing fun and more cost effective for agents as well as their audience.
Referrals Don’t Come From Strangers, They come from people who know, like and trust you
Building your audience from your sphere of influence needs to be authentic and must include qualified relationships. These are people you actually know and like, and they must feel the same way about you. The quality of these relationships will make a huge impact in your marketing and will go much farther than just buying a list of names and numbers to contact. If you choose the route of farming strangers for business, it absolutely will not work. Again, you need your SOI to like you in order to refer you, and in order to like you, that have to know you.
An easy test to determine if a relationship is worth marketing to is the grocery store
test. If you were walking down the produce aisle and came across that person and would stop and say hello with a smile, then they are definitely someone that would go on a SOI list. Conversely, if you were walking in the grocery store and saw someone that would make you turn and walk the other way, it’s safe to say you can leave them off your list. It’s all about quality over quantity.
Why Is This Important?
The Truth About Referral Marketing
It’s essential to consistently create leads in any real estate agent’s business, and
a marketing strategy based on the creation of referrals is essential for success. Repeat customers account for an additional 23% of a real estate agent’s business, and this repeat business canoften be created from referral marketing.
Referral marketing is about growing and building your audience out of your current
sphere of influence, consistently keeping your name front and center so that
they think of you when the subject of real estate comes to mind, you are top of mind. While this type of marketing is not the only type you should employ, it’s the
most effective and the most important to consistent success. The principles you will learn in SOI referral marketing will pop up again and again in your other real estate marketing
Understanding the Value of Each Person in Your SOI
On average, a person will buy 3-5 properties in their lifetime. Think of how many people you know, and imagine that each person bought 3 properties at an average sale price of $300,000. That equates to about $25,000 in total potential commissions FOR YOU from just one single relationship. Plus they know dozens of people each who will also buy homes in that timeframe?
Thinking about this will help you understand how much each person you have a
relationship with is worth to your career and income.
If you consistently market your audience, not only will you be more likely to get their business when they are ready to purchase a property, you will also get their referrals. That simply adds up to a lot more business and profit for you, and happy buyers on the other side. Its critical that you spend more time building relationships than chasing cold leads on the internet
The Two Types of Clients Created From Marketing Your Audience
Marketing from referrals will create two types of clients. The first is someone in your audience that needs to lease, buy or sell a property. If you’ve successfully stayed in front of them and kept contact consistently, you will be the first person they thought of when they needed a realtor. By marketing that relationship, you ensured that you were not forgotten when the time came for their move—which is inevitable.
As we’ve been discussing, the second type of client that will come out of marketing your audience will be the result of a referral. Think of the scope of your audience, and all of the opportunities that happen daily for them to refer you to other potential clients.
Be confident in knowing that your audience wants to refer you, especially when you create the reputation of being a problem solver in the industry. People who are looking to buy or sell a home essentially have a problem that needs to be solved, and when you are the person that helped them solve it, they will want to tell others that might have a problem too. Building these relationships will create long lasting business and raving fans for life
Since referrals and repeat business make up roughly 61% of all agent business, don’t you think it’s time to do something about your referral marketing? Once you set up systems to start referral marketing in your business, you can streamline your workload so that it takes less time and provides you with a steady influx of clients.
You Already Know Your Audience: The coolest thing about marketing to your SOI is that the audience already exists, they know you and they’re right in front of you. You know them already. Real estate is one of the few businesses that start with a built-in audience, assuming you know someone (which everyone does). If you opened an ice cream shop, you’d have to work hard to build a customer base until people got to know what your ice cream tasted like.
In real estate, all you really need is a great personality and some smarts, since people are more likely to do business with and refer others to agents they know, like and trust.
Granted, our audience might only need our services every 5-7 years; it’s not a product that people require frequently. That doesn’t mean, though, that you should only put yourself in front of your audience when they need arises and they are in the market. Consistent marketing will keep you on the brains of your audience (mindshare matters), so that they will think of you when the need arises. If we lose touch with our audience, it’s less and less likely they will refer our services to friends and family when their need arises. Understanding this
concept is the most important thing a real estate agent can grasp when it comes to repeat business and referrals.
There are so many channels available that will allow you to be in front of your audience consistently: Facebook, LinkedIn, email, direct mail, YouTube, Instagram, text video or the good-old-fashioned telephone call that will allow you to communicate often. A personal visit, now that’s a powerful old school move
Embracing this concept of marketing your audience and relationship always helps real estate agents to cultivate a steady stream of business. If you create a system to market your sphere of influence between 52-80 times a year, you will get more business as long as you’re not boring or annoying.
Why People Want To Refer You
It happens all the time: a conversation about real estate brings up yourname, with someone telling the other to give you a call as they sing you praises. Just like that, a referral is created. But why did someone refer a client to that agent? The answer lies in referral marketing. You need to train your audience to remember your name, specifically when they need assistance with buying or selling a home or when they hear others talk about real estate. As humans, it’s an inborn instinct to refer people (family, friends, or co-workers) to thingsthat we like. Did you ever notice how everyone always has “a guy” that they go to for a specific service? Have you noticed that everyone wants you to use their “guy”? The question, though, remains: why do people refer a specific person? What’s in it for them?
In real estate, people refer agents when the following factors are present:
1. They must like the agent they are referring them to
2. They must like the person they are giving the referral
3. The person referring the agent has to notice that a conversation about reaestate is happening, and you need to come to mind
SOI and Referral Marketing – Summing It Up
It’s more important to the general public to find or refer a real estate agent they know, regardless of competency, then to research the difference between a good and bad agent. It’s unlikely that they will do additional research to find an agent with the best sales or specific expertise for their area, and all statistics show this. 61% of agent business is directly attributed to referrals and repeat business. While it’s true that trends are shifting, with consumers beginning to search out expert realtors, the statistics still hold true: most will still go to the person they already know first. Buying real estate is a huge decision, and consumers will go to someone they know, trust and like for advice and direction.
With that in mind, your goal should be to put yourself in front of your audience and let as many people as possible know what you do for a living. Doing so will help you to set up a consistent real estate business, powered by your SOI, fueled by your audience and grown by repeat business. Knowing how to build your sphere of influence and then putting your referral marketing plan in motion is vital if you want to be sustainable. If selling one or two properties here or there is your goal, then this plan is not for you. If your focus is to have a career in real estate with a bankable consistent flow of business, then it’s time to take personal responsibility for your career! Use all the channels you have available to communicate to your audience, including social media.
How Do You Find More Clients?
Doing a better job with referral marketing is one of the best things you can do to
increase referral business, but it’s not the only thing you can do. Do you want to create the best version of your business that will help you stay in front of your SOI, stay connected with your audience, and have the kind of career and income that you want – and deserve?
If you answered yes to any of the above questions, we have an answer for you. Our proprietary software, Hypersphere Marketing Systems, will save you time, effort, money and stress and will help you truly market yourself effectively in 2020 and beyond.
Check out the links and get in touch with us, so we can start helping you be a Game Changer in your own career.