Six Key Concepts of Prospecting

Concept #1: Prospecting is the name of the game. We're in a great profession. We do more than just list and sell houses. We make a difference with people by helping them move from point "A" to point "B" in their lives. Now, how we know we're doing a good job of this is by how much money we make. Money is a gauge of how many people we are helping; the more we help people, the more money we make.

Let me share what I call the Links to Success.

■ To make more money, we need more closings.

■ To have more closings, we need more contracts.

■ To have more contracts, we need more listings.

■ To have more listings, we need to attend more appointments.

■ To attend more appointments, we need to schedule more appointments.

■ To schedule more appointments, we need to prospect.

So prospecting is the first link to success. If you do more of this, the rest will naturally fall into place. Even if you're really bad at it, the more you do it, the more results you will get. Why? Because real estate is a numbers game as shown in Figure 2-1.

Studies show that if you call enough people and just bark into the phone, eventually someone is going to say, "You must be a Realtor®. Come on over!" So you've always got to prospect.

Concept #2: Focus on building inventory. Many of us have listings goals: "This month I am going to get X number of listings." But I want you to start doing what all the top agents do. They don't look so much at how many listings they get in a particular month; they look at how many they have in their inventory.

Before one of my Power Program classes, I walked over to my student, Tony Donnino. Tony said that he had gotten three listings and one sale. I said, "Wow. Sounds like you had a good month." And Tony, being a perfectionist, says, "Well, I could have done better." So, since I know Tony loves to set the bar high for himself, I asked him how many listings he had in his

inventory. He told me he had 26. Again, sounds good, right? But remember, we're talking about Tony here. I said, "Tony, you should focus on building your inventory up to 30 over the next 30 days. Then perhaps next month build it to 35."

What's great about this is that by focusing on building inventory, as opposed to just getting listings, you will replenish your listings as they go into contract. So, let's say you have 26 in your inventory and your goal is to get it to 30 in the next month, so you need to obtain four. But, let's say that during the month two of your listings go into contract. How many do you need to get that month? Six, because you're also replenishing the two that went into contract. As a matter of fact, if you just played the game to increase your inventory by only one each month, you would probably be on your way to doubling your income, depending on what type of market it is. You could even create a chart, the Listing Inventory Chart (Figure 2-2).

Concept #3: If you are in the office, you're not making money. The only way you make money is if you are out of the office seeing people— whether it be buyers or sellers. And if you are in the office, your primary objective should be generating opportunities to go on more listing appointments.

Concept #4: Work a prospecting plan. Here is a very simple—and very effective—plan.

A. Cold-call three hours a week. All the top producers that I know are making six-figure incomes. They are putting $100,000 plus a year into their pocket and they are cold-calling once a week for three hours. Why would that be a good thing to do? I mean, here are people making six-figure incomes; they probably don't need to cold-call, right? Wrong. They do it to keep their skills sharp and stay on top of their game. Not to mention the fact that cold-calling enables them to maintain a high listing inventory in the first place.

B. See two FSBOs a week.

C. See two expireds a week.

Now, just looking at letters A, B, and C, how many listing appointments are you going to attend at a minimum? Four. Do you see that? Two FSBOs, two expireds—four is an absolute minimum. This is what a lot of top producers do. Of course, you might go on more as a result of the cold calls. Or you can try something that I personally did. We'll call it letter D.

D. Do a listing campaign. I used to go on listing campaigns. For just 30 days, I would list like a madman. I wouldn't work with buyers at all, except for the "A" buyers. I would just list, list, list, list, list. When I got tired of that and I wanted a mental break, I would go play with buyers. Once I got tired of the buyers and I was ready to go back to listing— boom!—I would do a listing campaign once again.

Concept # 5: Refer your B and C buyers out. Here are the definitions of "A," "B," and "C" buyers.

■ An "A" buyer is someone who has to buy a home now—there are no ifs, ands, or buts about it.

■ A "B" buyer is someone who is committed to buying a home, but not in much of a hurry.

■ A "C" buyer is someone who is not committed; it's more like "it would be nice" or "it would be a good idea" to buy a home now.

When you're focused on building listing inventory, you should not work with "B" and "C" buyers. "A" buyers are a definite sale, so you keep working them.

Let me illustrate my point this way: Can somebody make $100,000 or more a year in real estate by working with buyers only, not doing any listings at all? Yes, but it would be very tough ... and you would definitely be crazy by the time you were through. But if all you did was work listings and not work buyers, could you make $100,000 a year? Absolutely.

Now, I am not saying to abandon working with buyers altogether. But you've got to respect what works. And it's not just me saying it. I travel across the country all the time and I'm always talking to real estate people who make six figures. They tell me that 75% of their income comes from listings sold and the other 25% from working with buyers.

So I am telling you to prospect and build your inventory—put most of your efforts into that. And if you are going to work with buyers, make certain that you're just going after the "A" buyers. Why would you work with someone who isn't ready to buy now? We are not chauffeurs; we're real estate salespeople. So if you've got someone who isn't ready to buy now, a "B" or "C" buyer, refer her or him to an agent who hasn't read this book!

Concept #6: Real estate is a pure numbers game. Put an asterisk next to this one. Regardless of how good or bad you are on the telephone, if you just make call after call, eventually you'll get an appointment. Now, I don't know if that helps you or not, but I would think it takes some stress away.

You see, all that we try to do as salespeople, by taking courses, listening to tapes, and going to seminars, is to increase our skill levels so we can then increase our closing ratio. But regardless of your skill level, you should just simply work the numbers.

Just the other day, Sharon, one of my students, came up to me and said, "Darryl, I think I know what you're talking about. I should prospect more. But I'm just not doing it."

She said, "I just have this fear of calling a complete stranger."

So here is what I told her. I said, "Look, if you don't make the phone calls, are you going to have any listings?"

"Nope."

"Great," I said. "So let's say that you do call and you are really bad and you mess up. Are you going to get any listings?"

"Nope," Sharon smiled. She was starting to catch on.

"So, in other words," I finished, "if you don't call or if you do call and mess up, you are not going to get the listings either way, right? But here's the thing: if you don't even pick up the phone, you're guaranteed not to get the listings."

But if you do call, maybe just maybe you might not mess up. You may even get lucky. Who knows? The right thing could just come out of your mouth and you just might get the appointment and get a listing.

My point is that by picking up the telephone and just making the call, even if you don't get the appointment, you are no worse off than if you didn't make the call at all.

Here's a tip. The key to working the numbers and making calls and prospecting is don't be so attached to the result. Let me say that again: don't be so attached to the result.

You know, I believe that the reason you may not pick up the telephone is because you have something riding on what the other person says, meaning, "I've got to get this appointment because if I don't, I've failed." Forget all that garbage. This is business. It's not about your worth as a person.

Just pick up the phone and see if you can help these sellers. If they are open to having you help them, well, that's great. If they are not open to it, that's fine too. At least you tried.

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