What is Circle Prospecting?
In real estate, Circle Prospecting entails making calls to people within a specific geographic area and asking them for business. It is one of the easiest methods of prospecting today. Circle prospecting offers a unique niche market that you might not reach otherwise. The goal of circle prospecting is to grow your database and set appointments that you may later turn into listings.
Using the right circle prospecting script is essential to getting those appointments set!
Why is Circle Prospecting so effective?
With other types of prospecting, there is so much competition. When you call expired listings, for example, much of the time many other agents are also calling the same listings. The prospecting method still works, but you have way more competition. It is the same way with FSBO’s (For Sale By Owner). You may be the best agent for the job but you may not be the agent that reaches them first or connects with them in a way that gets you the appointment. I am a huge fan of Circle Prospecting because you are not competing with nearly as many other agents.
The Key to Success with Circle Prospecting: Following Up!
Follow up is everything. Pay attention because this is the place where most agents strikeout! Most agents hear somebody say they don’t want to sell for 6 months to a year and they go on to the next person who’s hot to trot.
The thing about Circle prospecting is that you are in for the long game. Circle prospecting is building up an enormous database of people who begin to know you and trust you. You are building your brand with these people. You can’t just call them once and expect them to recognize you in the supermarket, or think of you when they know someone with a house to sell. Think about how many times a day you see brand names.
Do you remember what the name of the real estate agent who has that sign in front of the house near your kid’s school? Maybe, but most likely not, and you are a real estate agent. So once you add these people to the database and you’re getting postcards to them, newsletters to them, phone calls to them – they will start to recognize you. They will start to remember who you are when you call. As time goes on you will have a relationship with each of them and that is the goal.
You are becoming the real estate agent of choice in the individual markets you are looking at. When you are Circle Prospecting and you’re using that script that you memorize – that Just Sold script or The Hot Market script or even the Open House script – you need to remember that each person you talk to has the potential to be an advocate for your business. That’s what is so powerful about Circle Prospecting. You can literally create a database from nothing, from scratch. In time, that database will provide your family with the income you need for years.
How to GetÂ Appointments
Getting a listing appointment is obviously the goal of circle prospecting. When you begin calling a new neighborhood, the people don’t know you from Ted over at the gas station (no offense to Ted). So how do you build a relationship with these complete strangers? I personally recommend 4 calls a year: 1 each quarter, plus having them on an email drip.
When you add in some postcards, newsletters in the mail about your business, a business card, a thank you note, a kitchen magnet, etc., any of those things are going to build a rapport with these people. Over time your name is going to be in front of them so often that they begin to recognize it. When they drive past the sign and they see your name on it, they will think of you. We need to get you to the front of their minds. We need to make sure that you are the agent they think of when they have a home to sell or know someone who wants to buy in the area or sell in the area.
How to Build Your List
When you are Circle Prospecting, you are going to talk to people that don’t want to talk to you. People who know real estate agents that they would work with already – that’s okay. We’re not trying to turn the entire river to gold. We are prospecting. And when you are prospecting you are looking for the single nuggets – the individuals who, when added to your database, are followed up with, and are treated well, will bring you business.
You need to build this list everyday. If you are working, the number one thing that you can be doing is building your database and feeding it. Because that’s how you get fed. So when you go to the office in the morning, the first thing you need to be doing is growing your database.
After you feel like you’ve adequately grown your database for the day, you need to add value to the people in your database. What are some great ways to add value with little to no cost? One of my favorites is called Market Snapshot. And that is a tool offered by Top Producer. Basically you set them up so that once a month they receive a newsletter about what sold in their area. Everyone wants to know what the house across the street sold for. Everyone wants to know what Harriet’s house on the corner sold for. You can provide them with that at little cost to you. Plus if you are sending that to them once a month they are seeing your name 12 times a year right in front of their eyes. And they realize that you just added value to them.
What is another way to do this? Community newsletters. They are great because you can create them digitally or you can create them physically. Physically is probably a little more costly. However, it can be a great step because once again you can get in front of them once a month.
Let’s say you are sending a newsletter – just a simple newsletter about yourself and about the community and about current events that pertain to your database – using a product like Service for Life. Now we have: 4 calls per year, 12 emails of Market Snapshot per year, and 12 mailings of a monthly newsletter per year. Do you think they are going to start remembering your name?
Well hold on, we aren’t finished yet! What if you sent your prospects an update once a year on how the schools were doing in the area and what awards were received? I would want to know about that because the school systems in my area directly affect the value of my home.
What about letting prospects know once or twice a year what the national real estate market is doing? They may notice all the homes that are selling in their neighborhood, but how is the market doing as a whole?
These are tremendous insights you can provide to your database that they will love you for. Now don’t get me wrong, some people are going to unsubscribe from your mailings or your emails, or will tell you not to call again. That is fine. We’re not trying to turn the entire river to gold – we want just the nuggets.
ChoosingÂ the Neighborhood
Many people are going to tell you that you need to have an average of 7% turnover rate in a neighborhood to make it worth farming. That’s not true. 7% is a great number if you are going to be doing mailers to that neighborhood. Your goal is to grow your database with people from those neighborhoods, not just capture the people moving.
The problem with turnover rates is that some years 15% of people might turn over in a neighborhood, other years it may be 3%, and we don’t know when that’s going to happen. You are going to be constantly calling these neighborhoods in your area and growing your database so that you can be on top of it whether the turnover rate is low, or the turnover rate is high. The point is that no matter what the turnover rate, you are the one people are going to. You are the expert of choice. You are the one who has built a relationship with them. And guess what? Often you are going to get referrals that aren’t in the neighborhood.
What I like to focus on is a price range. I use Cole Resource typically and I go through the records in an area I like and find homes with a tax value of at least half of the price range I want. For example if I want to work in neighborhoods of $250,000 or more, I’m going to look for neighborhoods that have a taxable value around $125,000 or greater. It’s that simple. I want a price range that’s making it worth it for me to do the work and a location within 10 to 20 minutes of driving time.
And then I just keep calling and keep calling until I grow my database so big that I don’t need to circle prospect anymore – I just prospect my database. When you get to this level, you are going to be pruning your database, improving your database, and enjoying life. The referrals will be rolling in.
Tools for Circle Prospecting
Check out the tools page to see what tools I’m currently using in my day to day business. A brief overview for what you want to start circle prospecting is this. (Not all of this is needed but makes life easier)
- Auto Dialer – Check out mojo for this one as it offers a 3 line dialer.
- CRM – Contact management is key because you need to stay in front of your database to start receiving referrals.
- Value – I use market snapshot to add value, you can find many different ways to add value. Whatever You do I recommend getting their email address and emailing them at least once a month.
- Lead source – Cole information works great, Mojo also has a neighborhood info source. Your title company may be able to get you numbers also. Worst case 411.net but it’s very time consuming that way.
- Motivation – Find a way to stay motivated. This can take some time and I promise you it will be worth it. Doing this everyday is how you are going to succeed.
What is the Next Step?
Take Action. Now that you know how to grow your business through circle prospecting, what can you do today to take action?
Find a service that will get you the phone numbers of neighborhoods you want to circle prospect. Decide whether or not you are going to use an auto dialer. Check out my auto dialer blog post to find out why you should use one and which ones I recommend.
Set up your follow-up system. Make that a system that flows seamlessly without having to spend hours each day playing with it. You need to be able to enter people’s information into the system and have the system go to work for you.
Remember you are not making money doing administrative work. You are making money when you are selling houses. You need to have a goal of how many people you are going to add each day. I personally recommend 5. That is a great number starting out, and if you want to take it up a notch, do it! The more people you add, the better. I typically see numbers between 10% and 20% as far as conversion rates to joining your database.
Now go out there build your database and let me know how it goes! If you’ve enjoyed this post please leave a comment and let us know. And join our mailing list to receive all of our free and amazing offers.
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