In an ever-changing real estate market, agents are looking for the best way to generate leads. In light of the recent NAR lawsuit outcome, seller leads are even more crucial. Buying leads is easy but expensive. If you’re running on a tight budget, circle prospecting may be more your speed.
Circle prospecting is a tried and true method, but it takes some serious commitment. It involves calling potential leads on the phone but can be supplemented with door-knocking and direct mail. The conversion rate on circle prospecting is low — by some estimates, around 50 or 60 calls for every one lead converted — so you’ve got to have patience, a good phone voice, and thick skin.
What is circle prospecting?
The short answer: circle prospecting is a strategy for generating real estate leads within a specific geographic area or around a particular listing or sale through outreach — usually cold calling, but it can include other methods. In Florida, this may be a specific gated community. It’s a method to establish and nurture relationships with both potential clients and other stakeholders within a defined area.
Circle prospecting requires a combination of interpersonal skills, local market knowledge, and often, patience. It’s about building a brand and reputation in a specific geographic area that will make residents think of you first when considering real estate transactions.
Let’s take a deeper dive—8 circle prospecting ideas
You already know the definition of circle prospecting, but let’s talk about more specific aspects and how to use it most effectively.
Geographic targeting
The core idea of circle prospecting is geographic targeting, where real estate agents focus their marketing and outreach efforts on a specific neighborhood or area. This area could be around a new listing, a recently sold property, or any other geographic location, such as an up-and-coming neighborhood, the area in which they live, or even an area selected based on price point. It’s important to determine the number of potential leads in the geographic area you select to maximize your efforts. There are numerous tech tools available to agents to help with prospecting. Companies like SmartZip can quickly and easily generate a list of potential home sellers based on data, not just a zip code.
You’ve got options
Various methods can be employed in circle prospecting, including door-knocking, telephone calls, direct mail, local advertising, and community involvement. The goal is to make connections and offer value to residents, whether or not they are currently looking to buy or sell property. Many neighborhoods (gated and non-gated) have non-soliciting policies, so it would be impossible to door-knock there. This means that direct mail and cold calling will be your only options.
Do not call registry
You’ve likely been on the receiving end of an unwanted telemarketer call. You’re not alone. As the number of robo-dialers and pre-recorded calling machines increased, the government stepped in and decided to do something about it. In 1991, US Congress passed the Telephone Consumer Protection Act (TCPA) to restrict sales calls and the use of robo-dialers and recordings. This led to the creation of the Do-Not-Call (DNC) Registry, which is important to be aware of. If you plan to do cold calling as part of your circle prospecting, it would benefit you to use a tool like RedX to make sure you are staying compliant. Being respectful of residents’ privacy and preferences is crucial.
Offering value
Providing value is crucial in circle prospecting. This could be in the form of market updates, home maintenance tips, community news, or other helpful information. Offering value helps build trust and a positive reputation in the community. It makes me nuts when I see a real estate agent offering “free home valuation” as if that is something special. That is something we all should be doing in an effort to show value to clients and potential clients. There are tons of less involved ways to show value as well. Let them know about upcoming events, share a recipe, or offer tips to prepare for the seasons. Anything that provides them value.
Relationship building
Beyond just generating leads, a significant goal of circle prospecting is to build and nurture relationships within the community. This involves following up, offering continuous value, and being present in the community through local events and other activities. Clients want you to be more than just a face on the postcard they got in the mail or the unknown voice on the other end of the phone. They want to see you at holiday parades or cheering on the local youth soccer team. The more you are a true member of the community, the more they will trust you and think to call you when they have a real estate need.
Using technology
Modern circle prospecting often involves the use of technology. Tools like Customer Relationship Management (CRM) software, geographic information systems (GIS), and social media advertising can help agents organize their prospecting efforts and reach a wider audience within their targeted area. If you already have a CRM provided by your brokerage and that you love, leverage that. They say the best CRM is the one you use! If you don’t already have one, check out companies like Market Leader, CINC, RealGeeks or PropertyBase.
Long-term strategy
Circle prospecting is typically a long-term strategy. It may take some time to see results, but building a strong local reputation can lead to a steady stream of referrals and repeat business. Much like the story of the tortoise and the hare, in the game of circle prospecting, slow and steady wins the race. Think about any of your close friends. It’s unlikely you talked to them once and were suddenly besties. It takes time to build that trust, learn about each other, and make connections. The same can be said of the potential clients that you are continually reaching out to during your cold calls, door-knocking, and direct mailing.
Measuring success
Successful circle prospecting can be measured through metrics like the number of new contacts made, relationships nurtured, listings acquired, and ultimately, deals closed. It may take a little extra effort, but be sure that you are tracking your calls, your leads, and your deals, no matter what type of prospecting you are doing. This is where a Customer Relationship Management (CRM) can save you time, energy, and dropped balls. A good CRM will allow you to track calls, texts, emails, as well as birthdays, pet’s names, and favorite ice cream. Most platforms aggregate your data and present it in graphs and charts so you can easily see your progress and know what needs to be done next.
8 effective circle prospecting scripts
Scripts are a popular and powerful tool used in circle prospecting, particularly when cold calling. Agents want to feel prepared for their phone calls, but it’s a delicate balance between being prepared and sounding natural.
Use these scripts as starting points to capture the lead’s interest and demonstrate your expertise and value. Be sure to adapt them to fit your style and your local market.
The neighborhood expert pitch
“Hello, my name is [Your Name] from [Real Estate Company]. I specialize in helping homeowners in [neighborhood] get the best price for their homes. May I ask, have you thought about selling your home, or are you curious about its current market value?”
The just sold announcement
“Hi, I’m [Your Name] with [Real Estate Company]. I just sold a home in your area at [price], above the asking price. It’s a great time to sell. Have you considered selling your home, or are you curious to know how much your home is worth in today’s market?”
The just-listed open house invite
“Good [morning/afternoon/evening], I’m [Your Name] with [Real Estate Company]. I’m excited to share that I just listed a property in your neighborhood at [Address]. It’s a great time for real estate in [Area Name]. I’d love to invite you to a special open house for neighbors only on [date] at [time].”
The home valuation offer
“Hello, I’m [Your Name] with [Real Estate Company]. I’m reaching out to homeowners in [Area Name] with a quick market update. Homes are selling for top dollar right now. Have you thought about selling, or are you interested in a free home valuation?”
The expired listing approach
“Hi, my name is [Your Name] with [Real Estate Company]. I noticed your home was on the market but didn’t sell. I have a few strategies that have helped homeowners get their homes sold. Would you be open to discussing a fresh approach to selling your home?”
Local market update
“Hi, this is [Your Name] with [Real Estate Company]. I recently helped a homeowner in [Area Name] sell their home and thought you might be interested in a quick update on our local real estate market. There’s been quite a bit of activity lately. Would you like to know how the market conditions might impact your home’s value?”
“Hello! I’m [Your Name] with [Real Estate Company]. We’re hosting a community event at [Location] this [Date]. It’s a great opportunity to meet neighbors and discuss the local real estate market. We’d love for you to join us. Can we count on seeing you there?”
Referral request
“Hi, it’s [Your Name] from [Real Estate Company]. I’ve been working with homeowners in [Area Name] and surrounding areas. If you know anyone looking to buy or sell a home, I’d be honored to assist. It’s my goal to provide exceptional service. Could I leave you with my contact information for future reference?”
These scripts are just templates, so remember to tailor these scripts to your personal style and the specific circumstances of the area you are targeting. Being genuine and offering real value are key to making a positive impression and building relationships through circle prospecting.
9 pro tips for expert-level circle prospecting
Circle prospecting in real estate can be a powerful method for generating leads and building a strong network within a particular geographic area. Here are some tips to help real estate agents excel at circle prospecting.
Use technology
Take advantage of advanced tools like geographic information system (GIS) software, Customer Relationship Management (CRM) systems, and auto-dialers to streamline your prospecting process. Remember, this is a marathon, not a sprint.
Watch the clock
Most people work from 9 to 5 or 8 to 4, except for first responders, shift workers, etc. You’ll want to remember this when planning to do your calls. The best time to catch someone is likely between 4 and 6 p.m. Of course, you can call any time you want, but if you want to make your efforts worthwhile, early evening calls are recommended.
Be consistent
Consistency is key in circle prospecting. Regularly schedule time for prospecting activities like calls, door knocking, and attending community events to stay on top of mind in your chosen area. Think about your favorite barista. When you show up regularly to grab your morning coffee, she remembers you. It’s not a whole lot different with circle prospecting.
Provide useful information
Provide useful information, like market updates or home maintenance tips, to the people you interact with. Offering value can help build trust and establish you as a local expert. The more specific and relevant the information you provide, the more valuable they will find it.
Practice your scripts
Have a variety of scripts ready for different scenarios. Practice them to ensure your delivery is natural and engaging, not robotic. You can do this by talking to your pet, a mirror, or a buddy. Many agents on your team have script practice sessions where they run through various scenarios to become comfortable with the unknown.
Build relationships, not just leads
Aim to build lasting relationships with the people in your prospecting circle. Even if they aren’t ready to sell or buy right away, nurturing relationships can lead to referrals and future business. I didn’t believe it until it happened to me. I nurtured a lead for close to three years. Then, one day, they decided they were ready, and not only did I gain an amazing client, but I also took home a lovely commission check.
Track your efforts
Keep track of your activities, conversations, and the results of your prospecting efforts. Analyzing this data can provide insights into what’s working and where there’s room for improvement. The definition of insanity is doing the same thing over and over again but expecting different results. Make sure you are updating and adjusting your process to continually improve.
Stay positive and patient
Circle prospecting can be a long-term effort. Stay positive and patient, as building a solid local reputation and network can take time. Not everyone that you prospect will be ready to sell tomorrow. Be patient. Stay relevant. Do these things, and when they are ready, you will be the one they call.
Educate yourself
Continuously educate yourself about the latest real estate laws, market trends, and effective sales techniques to improve your circle prospecting skills. There are endless webinars, YouTube videos, and Instagram channels that teach new and improved circle prospecting, sales techniques, and lead follow up. Take advantage of them.
Combining these tips with a well-thought-out strategy can significantly enhance your circle prospecting efforts, helping to grow your real estate business in a sustainable manner.
As with anything in real estate, you’ve got to find the system and processes that work for you. My advice is to use technology to your advantage. Real estate agents are a lucrative market for software companies that build CRMs, mail platforms, and predictive analytic tools.
If you need something specific for geotargeting to find your circle prospecting area, I recommend SmartZip. Their software uses predictive analytics and big data to increase the accuracy of the leads they provide. They can predict which homeowners are most likely to sell with a 72% accuracy rate.
Worried about calling someone you shouldn’t? Vortex, a tool created by RedX, is your answer. It quickly and easily compares prospect telephone numbers against the Do Not Call list for you. Platforms like this make it easy to comply with federal regulations and keep yourself out of hot water. An added bonus is that Vortex has built-in scripts to keep you on track, as well as suggested objection handling. Yes, you will get objections when you call strangers.
When it comes to creating the circle that you plan to prospect, Vulcan 7 is a huge advantage. One of the more comprehensive tools available, every query searches for real-time information and returns the latest data. The Vulcan7 Neighborhood Search data packages include a very robust search tool.
Some of the Vulcan7 search filters include:
- Absentee owner or owner-occupied
- Minimum/maximum estimated or assessed value
- Property type: single-family, condo, multi-family, etc.
- Property Detail: # bedrooms, # bathrooms, square footage, acreage
- Year built
- Length of ownership
There are many other tools out there to help real estate agents with circle prospecting. Before you run out and purchase something, see what your broker offers you and take it for a test drive. If it doesn’t work well enough for you, then start shopping around. These tools can get expensive, so you want to do your homework and find the right platforms for your business.
The full picture
Circle prospecting is not for the faint of heart. It takes commitment, patience, and perseverance. But is it worth it? It certainly can be. Create a strategy that works for you, use the tools and techniques available, and commit to staying consistent.
Practice your scripts, narrow down your circle, and make a plan for consistency. If necessary, find a buddy and do it together.
Sales gurus may argue with me, but I believe that the most important thing to remember when circle prospecting (whether that’s cold calling or door knocking) is to be genuine. People don’t want to talk to a slimy salesperson. They want to build a relationship with someone who they trust and who can help them through one of the more stressful financial decisions in their life.
Source link
