This is an overview of the book
Real
Estate Prospecting: The Ultimate Resource Guide by Loren Keim
Keim's
bio: Mr. Keim is a graduate of Lehigh University and owns a
Century 21 franchise in eastern Pennsylvania.
Key
point: You will not make a great living at any company waiting
for the phone to ring.
Mr.
Keim's story is a pretty interesting one. During the mid-1980's,
while he was in his early 20's, Keim made a bunch of money because
the market was super hot. Being young and naïve he thought he was
really something special. He also thought the market would stay like
that forever. So he convinced his father to spend his life savings
buying into Century 21. Not too long thereafter the market turned
and his father found himself facing foreclosure.
Keim
mentioned the old cliché that necessity is the mother of all
invention. With the prospect looming that his father could lose his
house, and it would be Loren's fault, Keim realized he badly needed to
invent some new clients. He knew the one way to do that was by
prospecting. Loren was indeed able to right the ship and things are going just fine
for him these days. This book is his attempt to pass along what he learned
and what he teaches to his team.
Keim
says that to prospect is to select a target audience and let them
know you have something to offer. According to Loren, “In the
Real Estate Industry, as in most sales professions, prospecting is a
dirty word.” He says that far too many agents enter the profession
and think they can sit and wait for the phone to ring with people
responding to advertises, direct mail, etc. Keim warns, “You will
not make a great living at any company waiting for the phone to
ring.”
“Prospecting,
however, is not simply picking up the phone and calling possible
buyers and sellers. To be effective, prospecting must be a
consistent planned process. Your goal is to create a steady flow of
business into your pipeline that will result in above average
income.” Ultimately you're going to want to implement both
short-term and long-term prospecting plan. But, I'll get to that in a
minute.
First
you want to select your target market. As you know, the real estate
business in highly competitive and the best method you have to
succeed is through specialization. If you simply want to list and
sell any house you come across, you'll find yourself right in the
thick of tons of competitors. Even to say that you focus on existing
single family homes is not specific enough. Especially if you're
fairly new or wish to seriously grow your business. Keim recommends
selecting two markets and it's best if they're counter-cyclic. By
selecting counter-cyclical markets you will be hedging against
fluctuations in the marketplace. The two specialties that Mr. Keim
first selected were historic homes and bank foreclosures. The reason
being that historic homes do well in up markets and obviously
foreclosures increase as the market goes down.
You'll
want to do research on your targets so that you'll be knowledgeable and can
position yourself as an expert in the field. Keim says that in this
profession, “Your inventory is your portfolio of properties for
sale or for lease. You are marketing someone else's product and
being paid for that service.” This is clearly where it helps to be
an expert in whatever markets you choose to target. Also you're
going to want marketing skills. One of which is to understanding of
the power of an expert.
“My
suggestion is generally to start with either calling or knocking in
neighborhoods where your firm recently sold a home, or to call through expired listings,” says Keim. Cold calling, over-the-phone
or in-person, is what Keim calls a short term prospecting method.
Long term prospecting involves centers of influence, advertising,
farming, etc. The thing to consider is that long term prospecting
takes 12-18 months to bare any fruit. For any income short of that
time-frame you will want to implement short term prospecting. People that
are new to the business, or even established agents that want to
generate additional commissions in the near future, should utilize
short term prospecting.
With
short term prospecting (cold calling) there exists powerful ratios
that Keim recommends you measure. For example, it will take a
certain number of cold calls to get a lead, and a certain number of
leads to close a sale. Once you establish what you ratios
(percentages) are, you will be able to predict your income with
astounding accuracy. If you're new to the business, Keim recommends
asking your manager for help in guessing approximately what your
numbers will be. This will help you know how many cold calls you
need to make.
A
thorough list of the various methods that you can use to contact
prospects is as follows:
- Door knocking – the most dreaded but often the most effective.
- Workshops and seminar – free and informative.
- Client gatherings or client parties – you're the link between the guests at your gathering so inevitably they talk about you.
- Booth at events and trade shows – hasn't been successful from Loren.
- Direct mail – recipes, newsletters, testimonials, etc.
Keim is
careful that we should offer something of value to our audience
(prospects). When we offer something of value we, “lower the
barrier of resistance a client has for calling you.” It is for
this reason that Loren is a big advocate for advertisements that look
like news articles. Useful information is more effective than ads
that are cute or endearing. Cute and/or humorous ads do much to
build name recognition but they do nothing to get the phone to ring.
If
you're terrified of writing advertisements, or news worthy articles, Keim recommends you go to gooder.com where Dan Gooder and his team
have various "free" reports which are available to you for a fee.
Regardless
of the method you use to generate a lead, Keim says the real intention
is to place each person into a system of follow-up that will build
familiarity over time. Sending out useful information helps to build
a relationship with your prospects. It is much like what I'm doing
with these book reports. The great Zig Ziglar said something to the
effect that if you help enough other people get what they want, you
can have what you want.
Loren
writes, “One of the primary differences between successful
mega-agents and everyone else is that mega-agents create systems into
which they plug prospective clients that allow follow up with those
clients.” To do this most effectively you will need some sort of
CRM such as ACT or Top Producer. Business and sales are very much
about timing. Your follow-up system (also commonly known as
“dripping”) is what will keep you in front of your prospects.
And, when the time is right, you stand a good chance of getting their
business.
Back to
long term prospecting. One area that is vital is your sphere of
influence. These are the people you know. For obvious reasons, this group should be
constantly expanding. Your goal is to keep these people aware of what
you do and consistently ask for referrals. It's important to
remember that you don't want to be pitching these people every time
you contact them. That would be a recipe for destruction. Rather you want
to pleasantly, yet persistently, drip on these people over time.
Also, it's a good idea to host client gatherings as another form of long term prospecting
method. This could include everything from a movie night to a
welcoming party for clients that are new to a neighborhood. And, of
course, farming is probably the most famous long term prospecting
method. As you probably know, farming is where you select a
geographic, or demographic, group of people and drip on them until you
are the "go-to" realtor for these people.
Keim
refers to Tom Hopkins and how Mr. Hopkins would deliver pumpkins to
his farm every Halloween. Keim Realtors tried the pumpkin idea but
it didn't work too well for them. Instead every year he and his team
deliver American flags. Though he doesn't
mention it, I have to imagine he's talking about the fourth of July. Of
course, after pumpkins or flags, you need to follow-up with door
knocking. Keim says, “Within 24 to 36 months of consistent
contact, you should achieve a market share of 25-50% of the homes in
that market.”
The
short term prospecting methods include:
- Cold calling
- Door knocking
- Vacant lots
- Expired listings
- For Sale By Owner
As the
name suggests, short term prospecting doesn't need to take much time in order to create clients. Loren explains, “Picking up the phone and
calling people takes almost no time, and can generate immediate
clients.” If you are reading this overview, there's a good chance you've spoken with me before. Keim prefers a simple
and direct approach on the phone. This is where you call someone,
identify yourself and simply ask if they know anyone (including
themselves) who is thinking about selling their home.
Door
knocking is a great option but Loren says, “Many agents use the
'mean people' excuse for not
door knocking. The truth is that you will find far more friendly
people than unfriendly.” Door knocking is tremendously useful in
the neighborhood of a home you have just listed or sold. For maximum
effect, you will want to touch each door at least three times. The
first time is right after you list. The second is to invite them to
the open house. And the third time is once the house sells. Again,
the entire time, you're not just knocking for your health, you're
looking for prospects.
With regard to vacant lots Keim suggests, “Search your local tax
records for vacant lots. Call the owner and ask them if they're
planning to build on the land or if they're planning to sale the
land.”
“Although
the expired listing market can
be a very lucrative source of business, it is one market where you
will run into a lot of competition from other agencies and other
agents,” according to Keim. As you undoubtedly know, you're not the
only one who has access to expired listings. Once a
listing expires the home owner suddenly gets dozens of calls from
agents. Half of these callers will say exactly the same thing
because they've been trained by Mike Ferry or Floyd Wickman.
Stopping
by the house that has expired is better than a phone call. There's a
good chance the home owner is upset because of his recent experience
with a realtor. Offering guarantees in writing is one good way
to get past this resistance. But remember not to go overboard and shoot yourself in the
foot with these guarantees. Another option is what a couple of
Keim's agents, named Wayne and Tim, do. They pull the expired listings
and drive to each house at 5am and leave promotional material, informing the owner of the situation, on their door step. This way the home owner gets the information just as they're leaving for work. This is one way to beat the
crowd and get to the owner first.
In
your literature Keim is big on creativity. Loren and his firm once
used what he called the “Crumpled Letter Campaign.” This is
where they print there direct mail piece, crumple it into a
ball, and then flatten it back out before sending it. The
headline to the letter said, “For your convenience, this letter has
been Pre-Crumpled.” The prospects who receive the letter can feel that it's different and their curiosity leads them to open the thing.
Once opened the humor of the headline gets them to read further.
As you know, statistics show that FSBO's will eventually list with an agent. But you need to be patient. Keim
writes, “Rushing in and telling them about your services and why
they will never sell on their own is a recipe for failure.” Loren
prefers to contact the FSBO and tell them, up front, who he is
and that he isn't calling to list their home for sale. Keim knows
that many FSBO's do want to sell on their own. But that doesn't mean the FSBO won't let Keim help them find the next home they purchase. So he becomes their
buying agent.
To
sum up the moral of the short term prospecting story, Keim talks of
reading about, “A Real Estate firm that had 25 agents and 25
telephones, but no desks … the story indicates the importance of
getting out there and meeting people because that's where your
business really is.”
