One look at the research and it’s clear that most business growth comes from the easiest to implement and sustainable prospecting plans. Yet too many real estate professionals twist themselves into contortions – not to mention financial ruin – sipping the latest snake-oil solutions. It’s time for brokers and agents to grow their business with our simple Formula of Fives.
Is there a secret formula to real estate success? Yes, but it’s not what you think. No lead generating technology, search-engine trickery or social media madness is involved. Special power words, astrological alignments or buried statues need not be used. You won’t even have to invoke the word “internet” to outflank the competition if you use the real estate prospecting Formula of Fives.
In sales, numbers matter. And the most important number is the number of people you contact every day. Yet most real estate careers follow a sine-wave of productivity, leading inevitably to the financial ups-and-downs that force people out of the business. That’s where the Formula of Fives comes in.
The Formula is quite simple:
- Contact Five FSBOs, Five Expireds and Five People in your Sphere of Influence every Five Days.
It’s really that simple, but if you need more complexity, here are more Fives for the Formula:
- Use prospecting techniques that only take Five minutes each.
- Keep your costs to less than Five cents per contact.
- Be sure to contact each target within the first Five hours of your day.
What makes the Formula of Fives work so well? For starters, the Formula is simple, inexpensive and most importantly: sustainable. For any prospecting plan to work, it must be implemented daily. That’s why the Formula calls for contacting only three people a day – fifteen a week – for less than 5 minutes a day. Certainly every salesperson has fifteen minutes in the first five work hours a day to build their business.
The Formula also calls for prospecting techniques that can be implemented in less than five minutes each. This means a phone call, email,, text message or social media comment. No time wasted typing addresses into a database, writing long letters or printing mailing labels. Such things cause procrastination and consume too much time to be sustained daily; Most agents hardly sustain such plans weekly or monthly. The Formula requires five-minute actions done every day.
Likewise the Formula of Fives keeps your costs low. No need for postage, website designers, pay-per-click accounts or expensive print ads. Fifteen minutes should not exceed fifteen cents. Admittedly, the Formula does not account for the value of your time, but neither do more expensive prospecting methods. At the very least, the Formula maximizes the value of your time by reducing prospecting costs to their lowest possible levels.
The Formula of Fives has a secret, though: It’s focused on the proven sources of new business for real estate salespeople. For Sale by Owners have a near-90% likelihood of listing their homes with a REALTOR – and most today would love to hear from a buyer’s agent with clients looking for owner-maintained housing options. Expired listings also comprise rich sources of listing business. Both of these sources won’t become clients instantly: research shows you’ll probably have to contact them about 8 times before they engage you. But that’s not a problem with the Formula of Fives.
Similarly, the Formula of Fives taps the greatest sources of referral and repeat business: past clients. It doesn’t take much or long to work your sphere of influence. A five-cent email or social media message can work this fertile ground of new business every morning. More than two out of three sellers found their agent through their sphere of influence. Keeping up with Five people a week should keep your pipeline full each year.
The Formula of Fives works for everyone. No matter how long you have been in the business or if your marketing budget is smaller than the competitor. No matter if your website has no traffic or even if you have a website. No matter the costs of a full-page ad or time to produce a neighborhood postcard campaign. The Formula of Five focuses you on the most effective prospecting method – relationship building – with low-cost techniques everyone can sustain.
In the numbers game of sales, the Formula of Fives is a winner. In fifteen minutes for fifteen cents a day, real estate agents can reach over 700 people annually, all of whom represent the most significant sources of new business in the industry. Sales is certainly a numbers game: and the secret Formula of Five is the only number you need to know.