Every agent, every salesperson, and every industry has their own definition of a “lead.” What’s consistent is that the moment a market begins to tighten, and the number of motivated buyers and sellers in our market begin to shrink, our definition shrinks with it.
In SHIFT, Gary Keller defines a lead as someone who is willing, ready, and able to buy or sell a home. In other words, they’re those who have the motivation to enter the market, the financial ability to engage in it, and the right timing to do so. No matter how you choose to define it, one thing is certain: your ability to thrive through this shift will be determined by your ability to find people who fit your definition.
At times it will feel like searching for a needle in a haystack. That said, the more we narrow our focus, and the more we refine our methods for identifying the motivated, the more motivated buyers and sellers we’ll bring to the table.
Narrow Your Focus
In 1906, economist Vilfredo Pareto observed that 80% of the property in Italy was owned by 20% of its population. The phenomenon became known as the “80/20 Rule” and has been applied to several different areas of our lives where the majority of our results stem from a small portion of our efforts.
In our research for the second edition of The Millionaire Real Estate Agent, we found that the same phenomenon can be applied to lead generation. To put it plainly, top real estate agents don’t get to where they are by putting their eggs in a number of lead generation baskets. On average, their top four lead sources account for more than 80% of their closed, new business. And, if you take a closer look, you’ll find that their top two sources account for more than half of their total closed, new business.
The more we narrow our focus, and the more we refine our methods for identifying the motivated, the more motivated buyers and sellers we’ll bring to the table.
Instead of trying to do everything at once, top agents focus most of their attention on mastering a few sources, and then scale their investments in those areas to drive their business forward.
That principle of maximizing our strengths pays dividends in good markets, and becomes paramount to our survival in a shifting market.
When we try to master several lead generation activities in a shifting market, we get overextended. Instead of doing any one thing well and achieving big results, we wind up doing several things mediocrely and achieve small results. In order to really pull through this shift, businesses need to become attuned with what not only provides results, but what provides the best results.
Identify What Works
Business owners should regularly run through the exercise of identifying what works and what doesn’t. If you haven’t done it before, run through this simple exercise:
- List out all of your lead generation activities on a single sheet of paper.
- Note the number of transactions derived from each activity. (If you want to take it a step further, also list the ROI it produced.)
- Rank the list in order of production.
With a list of what works for your business in hand, you can begin to assess the effectiveness of your lead generation efforts.
Like we mentioned before, in good markets, top businesses primarily focus on one to four sources at a time. In a tough market, you might not be able to afford to do anything else.
- Look at your list, circle the top four sources, and put everything else under a microscope.
- Then ask yourself, what would those top four sources look like if you cut everything else and invested those resources back into those more productive sources?
In our experience, barring one or two exceptions, most answers are going to be the same. You’d save more and produce more.
Stay on Top of What Works
Like Keller shares in SHIFT, there’s a difference between what’s worked for our business and what is going to work. Building effective lead generation programs in the middle of a shift requires us to stay nimble and adjust our strategy as the market continues to evolve.
One of the first areas to be shaken up during the middle of a shift is our message to the market.
Every market has a corresponding message that resonates with those who might be willing to buy and sell. If the message we broadcast out to the world doesn’t match the market, our lead generation becomes less effective – if not completely ineffective. But the message we provide isn’t the only thing that matters. The methods we use to convey our message matter just as much.
A couple of weeks ago, the sentiments of the market across the country shifted dramatically. As more states instituted shelter-in-place and stay-at-home orders, it became clear that the last thing on most people’s minds was the value of their home. They were more concerned with the value of their health.
With shifting values came a shifting message. It’s now insensitive to aggressively ask people for business. It’s now appropriate to ask people if they’re doing well and if they need help to get through this crisis. Tips and resources are also appropriate, and valuable during this time.
Like we mention in SHIFT, every message has a method of delivery that drives its success. Businesses that were once marketing based have become prospectors almost overnight. Instead of sending out postcards, top businesses are making phone calls and developing rich relationships with the people in their databases.
As you focus on what works and continue to find new ways to remain effective with your lead generation, it’s important to remember that prospecting is profitable in more ways than one. Not only is it a more cost-effective strategy for generating leads, but the personal conversations it generates keeps us more in tune with the message of the market, which informs the messaging we should use in our marketing.
Ramp it up!
When you’ve figured out what works, the only thing left to do is to ramp up your activities to maximize your opportunity within the market.
As the saying goes, when the going gets tough, the tough get going. In times like these, we have to roll up our sleeves and really put our best foot forward in order to maintain our level of business, much less reach greater heights. What’s important is that once you identify the right message and method of the market, that you engage in those activities relentlessly and consistently.
Never let your foot off the gas and keep your eyes ahead of you!
While lead generating, you’re going to come across substantially more prospects than you are leads. People might have the motivation, ability, or willingness, but not all three. When it comes to these people, it’s urgent that you have a place to store their contact information so you can follow up with them as they march through their consumer journey.
As they say, the business is in the follow-up. While playing the short game is a key to your business’ survival, the long game you play with the prospects you generate will be key to your business’s revival.
When lead generating, engage in consistent follow-up with your database. Leverage SmartPlans in Command so you can systematically connect with people who are still a ways out from entering the market. And, during your lead generation time, make a point to try to fill the gaps, that might help them turn their “no” into a “yes.”
Even if you’re unable to close a deal right now, you can still be setting yourself up for future success when we can safely transact again. What you do now, the sweat you pour into building relationships with your database, the ways you identify to serve those motivated to buy and sell – all of these activities are things you can do right now to set yourself up for future success.