You probably have far more people to add to your Core than you realize. At Best Agent Business, clients often start with 500 people. After a month of database management and cleanup, they have 800 people. Every single person is worth at least $100/year when you add them to your Core. Spend the time and money to add to your Core. Here are four main places we find people who were not in the main database:
1. Phone - Your smartphone, iPhone, Android, or Blackberry likely has 50 to 200 people who should be in your database. These may be SOI, vendors, clients, and buyer/seller leads that got lost in your database shuffle.
2. Email - Your email system, such as Outlook or Gmail, also has people who need to be added to your core.
3. Facebook - You may have 500 friends on Facebook and there are lots who should be added to your core. You do not need to add other real estate agents. You do not want to add anyone who you are not comfortable sending a monthly email or mailed newsletter to.
4. Business Cards - Do you have a stack of ten to 100 business cards of people you have met, who are not agents, who should be added to your core? They are each worth $100/year.
We code all people with an ABC rating such as Client – A, Client – B, Client – C. Here is a basic coding outline for your core:
A – A person who has referred you people or if they are a client, they have done a repeat deal.
B - You believe the person may refer you someone or consider you when they do their next real estate transaction.
C - You are unsure if this person would refer you or consider you for business. It is very important to send monthly email and mailed newsletters to these people.
How much of your business is from referrals?
In real estate, most agents can give you an estimate of the percentage of their business that comes from referrals. People tend to use the words past clients or referrals. Across the industry, most people just toss out a number but they fail to dig deeper. Some people get 20 percent of their business from repeat/referrals, some get 50 percent, some get 90 percent. How do you know if you are getting too little or too much? We have analyzed over 1,000 agents and found the answers. Your business can be anywhere from zero to 100 percent from repeat and referral business. Most agents are in a range of 20 to 80 percent.
New Business / Lower Percentage - If you are a brand new business, you will not have any repeat business. It may take you a while to develop referral business. Each year, your repeat/referral business should be growing. After your first five years of selling real estate, you should start to see a flow of repeat business.
Small Agent / Big Percentage – The vast majority of agents who do three to ten deals per year have the majority of their deals from repeat or referrals. They do little or no marketing. Many agents below $100,000 in GCI may have 80 percent of their business from repeat/referral.
What is the proper percentage for a Billion Dollar Agent? Let’s sort it out by using a Goldilocks approach. What is too low, too high, and just right?
- Too Low / 20 Percent - Agents who are getting only 20 percent of their business from their Core often have less profitable businesses. They may be overspending on marketing for new client leads, have a bad database or no solid database, and possibly have a love them or leave them attitude toward deals and clients.
- Too High / 80 Percent - Unless you are at the end of your career and business, 80 percent signals that your business is likely not growing. The owner may not be willing to implement enough calling of new Leads. The danger is that as the business owner ages and the database ages, the numbers will start to drop sooner or later through attrition.
- Just Right / 40 to 60 Percent - If you are newer and growing your business fast, you may be at 40 percent. For a solid Billion Dollar Agent, we suggest a target of 60 percent.
Does this sound right to you? Do you need help getting back on track? Call me, email me, reply to this blog. Let’s talk.
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