"The time to change is when you don’t have to; when you’re on the crest of the wave, not when you’re in the trough." ~Robert J. Kriegel
A “Sphere of Influence” or SOI is one of the best sources of generating business and should be a business development “foundation” for all real estate agents. Most buyers and sellers choose an agent based on a personal relationship or a referral. If a SOI is properly worked, it can provide an agent hundreds of thousands of dollars over their career. It probably won’t surprise you that most real estate agents do not properly work their SOI
All agents should strive to have a minimum of 100 people in their SOI. The goal is to increase this number every month.
All agents should strive to have a minimum of 100 people in their SOI. The goal is to increase this number every month.
If you ask someone who their doctor, lawyer, accountant, financial advisor or hairdresser is, they would be able to state a name. If you ask most people who their real estate agent is, they don’t have a clue. We want to train our people to think about you when it comes to real estate and recognize you as their source for all of their real estate needs.
Building Your SOI Database
The first thing we need to do is build our database. Here are some tips:
• Start with your personal address book.
• Focus on people who live in your ESA.
• Go through your checkbook register. Add names of people you do business with. It’s payback time!
• Do not add someone’s name for the sake of adding names. These are people that you and your family know of and there is some name recognition.
• Add your doctor, lawyer, accountant and other professionals.
• Schools, houses of worship, clubs and organizations, volunteer work, sports and recreational activities, political groups.
• Neighbors and previous business associates. If you have a spouse or partner, don’t forget their SOI as well.
• Since the number of people we don’t know is larger than the number of people we do know, you have to give this serious thought. Old leads from open houses, ads and signs. These people may re-surface in the future.
• Old leads from prospecting activities that have decided not to move at this time. (Expired and FSBO)
• Referral agents with your company and agents who left the business.
• Strive to add a minimum of one new name per day.
• Consider using a contact management database software like Top Producer or Agent Office or create an Excel Spreadsheet. You need to systematize your SOI database so you are more organized and have the ability to create mailing labels and a calendar of activities effortlessly.
• Start with your personal address book.
• Focus on people who live in your ESA.
• Go through your checkbook register. Add names of people you do business with. It’s payback time!
• Do not add someone’s name for the sake of adding names. These are people that you and your family know of and there is some name recognition.
• Add your doctor, lawyer, accountant and other professionals.
• Schools, houses of worship, clubs and organizations, volunteer work, sports and recreational activities, political groups.
• Neighbors and previous business associates. If you have a spouse or partner, don’t forget their SOI as well.
• Since the number of people we don’t know is larger than the number of people we do know, you have to give this serious thought. Old leads from open houses, ads and signs. These people may re-surface in the future.
• Old leads from prospecting activities that have decided not to move at this time. (Expired and FSBO)
• Referral agents with your company and agents who left the business.
• Strive to add a minimum of one new name per day.
• Consider using a contact management database software like Top Producer or Agent Office or create an Excel Spreadsheet. You need to systematize your SOI database so you are more organized and have the ability to create mailing labels and a calendar of activities effortlessly.
The 2% Rule
What is the 2% rule? When an agent goes through their SOI database just one time, 2% of their list will do business with them or refer them over the next 12 months. So, if an agent has 100 names, 2 transactions will come from their SOI in year one.
The 10% Rule
What is the 10% rule? When an agent contacts their database by phone or in person four times a year and sends a mailing twelve times per year in year one and continues these activities in year two, 10% of their list will do business with them or refer them in year two. So, if an agent has 100 names, 10 transactions will come from their SOI in year two.
Can you imagine if this system is consistently worked, how much business an agent could generate when their database gets up to 200 or 300 or 400 names?
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