Build Your Sphere of Influence (SOI) in Real Estate

Football legend Lou Holtz says that people have basically three questions when judging a relationship:

• Can I trust you?
• Are you committed to excellence?
• Do you care about me?

Those three questions perfectly summarize what is important in a relationship with past clients and your sphere of influence (PCSOI).

The key to a successful real estate business built on referral business is trust, excellence, and care.

Unfortunately, it’s not enough to demonstrate these traits once. You have to maintain your relationships so that you are top of mind when they have real estate needs.

This is what the best agents do, as referrals and past clients account for 40% of all buyer and seller lead generation. Some of the top agents in the real estate industry work exclusively from their sphere! No marketing whatsoever!

Each Personal Connection is Worth $624 Per Year

We can calculate the value of your real estate sphere of influence pretty easily!

Let’s make some assumptions:

• 0.1; 10% conversion rate. On average, 1 out of 10 of your personal connections should either buy or sell a home with you, or refer someone who does. That is a reasonable expectation. Or, another way of thinking about it is that each personal connection should do at least one deal or referral with you once every ten years.
• $312,000 average price point. This is the current number per Zillow, though pick a number for your own market!
• 0.025; 2.5% average commission. Or whatever the prevailing commissions are in your area. Perhaps you want to offer some discounts or rebates to your sphere? It is up to you!
• 0.8; 80/20 brokerage split. Obvious this depends on your brokerage! There are some 100% commission models where you can get more.

0.1 * 312,000 * 0.025 * 0.8 = $624

Each personal connection in your database is worth $624 per year for you.

The First 100: Build Your Sphere of Influence List

Based on the above math, If you can build an SOI database of just 100 people, that is $62,400 net income annually, already above the average salary for a real estate agent.

That should be doable even for a new real estate agent.

Sources For Your Sphere

Whip out your phone.

Anyone who is in it and lives in the area is your sphere!

That’s one place to start.

Begin entering them into your real estate CRM with notes until you get to at least 100.

Other groups of people to consider to expand your sphere of influence in real estate:

Rank You Database by Referral Probability

One way to do this is to sort by “wedding” and “Christmas” lists.

• Wedding list. People you’d invite to your wedding. This list is probably 50 names or so?
• Christmas list. People you would send a Christmas card to. This list is the largest number of people you can reasonably stay in contact with yearly. Likely 300-350 names.

Spend more time with the database most likely to refer you.

Another way to segment your database is based on the ABCD method.

• A+ – Already Referees. People who have referred you in the past; ideally the past 12 months. These are proven referers. There is a high probability they are willing to refer you again.
• A – Amazing Clients. Your past clients. They need to actually refer someone to be promoted to A+, but there is a good reason to think they would namedrop you if a friend were looking to buy or sell.
• B – Besties and Brothers. Or “friends and family”. They like you. But they’re not a past client and haven’t referred you in the past, but you are comfortable speaking with outside of a real estate context.
• C – Cool Acquaintances. You are aware of one another but don’t have a relationship. These might be leads in your database, vendors, or casual work and school acquaintances.
• D – Dead to You. Bad blood. You don’t like each other. A deal blew up. Your exes. Who knows. But you don’t want to speak to them again and the feeling is mutual. Don’t delete them, because you don’t want to accidentally add or market to them in the future.

Stay Top of Mind With a 50 Touch Marketing Plan

Coach Brian Buffini is laser focused on nurturing your SOI.

Here is one of his clients talking about the Buffini method, resulting in approximately 62 touches per year. Some of those are incidental; I’ve broken it down to 50 contacts per year:

• 12. Monthly direct mail postcard, letter, or newsletter.
• 12. Mid month email.
• 4. Client appreciation parties quarterly.
• 4. Pop by gifts quarterly.
• 2. Phone calls semi-annually.
• 4. Market update quarterly.
• 12. Social media engagement monthly.

Those aren’t for your entire database of real estate leads. Instead, higher involvment items like gifts and phone calls are reserved for your Bs and As.

Ideas to Stay in Touch with Your Sphere of Influence

I wrote the Ultimate Guide to Past Client and SOI Marketing, where I recommend the following ideas for marketing to your database:

Other Tips

• Don’t be obnoxious. If it feels unnatural and weird, it probably is. I don’t like getting pitched by family members. How do you get around it? Lead with value. Offer them a market update or something without expecting anything in return.
• Demonstrate subject-matter-exerptise. Your high school friend may remember you as the class clown. Do they secretly trust you to help them or their real etate referrals with a major financial transaction? Share your industry and market knowledge and earn their trust that you know what you are doing now.

Conclusion

Increasing your sphere requires minimal real estate marketing. These are high ROI warm leads. No cold calling, door knocking, or paying $1000s for Zillow leads.

If you want to know more about marketing to past clients and your SOI, check out my Ultimate Guide to PCSOI marketing!