Do you remember the person to whom you were introduced last week while talking with a friend at your daughter’s soccer practice? How about the name of the restaurant owner you met for the first time as a result of a lunch invitation? Your friend ran into one of his friends while the two of you were attending a movie together. What was the name of your friend’s friend?
These are all examples of people to whom we are connected in a secondary fashion. These are people with whom we connect modestly by two or three degrees of separation. Maybe you can’t quite remember today after meeting them last week, but surprisingly these groups of contacts have tremendous influence on us. We also can have significant influence on them. The friend of my friend is a critical force in our lives and businesses. That’s the conclusion of Drs. Christakis and Fowler.
This week I am reading their book Connected, a text about the surprising power of our social networks and how they shape our lives. In the opening chapter the authors present these fundamental rules of human networks:
We Shape Our Networks – how many people we connect, how densely we connect to others, and how central we make ourselves within these networks.
Our Network Shapes Us
Our Friends Affect Us
Our Friends’ Friends Affect Us
The Network Has a Life of Its Own
So, what’s the big deal? Well, I don’t think you will find a list of easy actions to make your business grow by reading this book, but everyone in the real estate business has a network that determines our success level in the business.
I think one of the quickest ways to assess a Realtor’s performance, plateaus, and problems is to make this simple request: Tell me about your network. The number of people in the network and the business quality of those contacts are the most valuable asset of a real estate agent. Let's consider two primary ways to measure a network:
First, the number of contacts: In most years 4-8 percent of Americans make a change in households. So if you know 100 people, there are going to be 4-8 individuals or couples moving in your network. Between one and two-thirds of these movers will make a real estate purchase in a year, which means we now have a pool of 2-6 prospective clients. If you captured all the leads, would this be enough business to support you? We can quickly see how the volume of our networks strongly influences the possible number of clients available for us. I recommend that new agents do everything it takes to create a database (names, address, phone, and e-mail information as basics) of 200 people within thirty days of beginning their careers. It will be difficult for a new agent to eat until she has this data in place. Experienced agents normally have 200-400 contacts whom they recognize by name if they randomly encountered these people in public. If you want an annual income of $80,000-120,000, make your target 500-700 people whom you know. These contacts must also know you from your systematic marketing campaigns.
Second, the purchasing patterns of the network: When I started in the business all my leads were young couples with pre-school children. My average sales price was about 15% below the market. I was building a successful practice, but I envied those agents who were matching or exceeding my sales volume with lower unit counts and much less effort. What was the problem? My network reflected who I was at the time. Until I diversified my network, I was unable to diversify my sales points and grow my income. Knowing a lot of people is not enough to create success; knowing people who will purchase at your target points is also critical.
Here are a few diagnostic questions to help you assess your network and data:
How Many People Are In My Network? If your answer includes the words about or approximately, then you have a problem. If you have a database (note cards, excel spreadsheet, or software) then you can quickly determine the precise number of contacts that you have. It is important that you know the count and monitor it routinely. What does this number tell you? Does it need to grow?
What Is The Quality of My Network Data? Do you know what you need to know and can you easily access it? Experienced agents often have an adequate count in their database but the quality has deteriorated. If contact information is incorrect or you have no clue who this person really is, that data is not going to help you much. In addition to the basic contact information, do you have birthdays, anniversaries, home purchase anniversaries, the names of children, and notes on your last conversation with them?
How Am I Building My Network? Set a goal of adding new contacts to your database each week. It takes specific time and deliberate effort to add the name, postal address, phone, and e-mail address for each new contact. However, once captured, you have an easy way to mail, follow up, and remind yourself of important ways to pursue that person. Any week that doesn’t add five new people to your database has been light on prospecting.
Do I Have Effective Tools for Communicating With My Network? There is no single tool for this process. Our culture is diverse and fragmented with multiple streams of communication. Approach communiction in two ways:
Who merits specific and unique communication? For example: the lead call from your web site yesterday who plans to buy within thirty days. This person merits a specific contact process for closely monitored communications and results over the next week.
Second, for those who can receive group communication, what tools will I employ? Online social networking, a regular postcard campaign, a routine of phone calls, hosting an annual event, meeting a group for lunch, video calls, instant messages or participating in a club – each of these allows for effective communication. How do you need to build and adjust your systems to communicate with large components of your network?
Returning to the book, Connected, the authors provide a terrific web site with rich resources. You may want to try the analytical tool they provide for exploring your Facebook network. Click here for that reference. It's fun and along the way you will begin to be influenced by their thoughts a bit, since as you enter the real of their network and influence. Thanks for making me part of your network.
Kevin: I found it interesting to learn about how many per 100 people in my network would buy or sell a house in a year! This also reinforced what I am currently working on which is to sort out all my contacts and get them better organized. I really can't tell you how many contacts I have right now but I will by the end of the week! (or sooner)Thanks! Melissa
Kevin: I found it interesting to learn about how many per 100 people in my network would buy or sell a house in a year! This also reinforced what I am currently working on which is to sort out all my contacts and get them better organized. I really can't tell you how many contacts I have right now but I will by the end of the week! (or sooner)Thanks! Melissa
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