Prospecting – Business Development Area
Knowledge and skills taught in this session:
- The purpose and benefits of farming.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
What farming is
The purpose and benefits of farming.
Most companies have a particular area that its consultants work on an exclusive or shared basis. That area is its ‘farm’ – its business development area.
The farm can comprise any group of people, but more than 75% of successful consultants use a geographic area. The idea is to build a presence in it and gain a reputation for being the one who ‘does the business’ there. You want to make people aware of you and your name so that, if they want to list or know someone who wants to list, they will call you and give you the chance to present to them.
The farm system is particularly helpful for people who are new to real estate or to the area, because it’s a base for getting themselves known and developing a listing base.
Like real farming, it’s hard work, but it can be very profitable if enough time and effort are put in. The benefits of farming are that it:
Provides a constant, never-ending source of listings.
Enables you to focus your marketing so that you quickly become known. (Focused marketing is covered in a forthcoming session.)
Helps increase awareness between you and the people on the farm.
Makes you an expert on that area, so that you actually do better at your job there.
Creates a snowball effect: once activity starts, listings tend to proliferate.
Focuses your success in one area, which increases your visibility even more.
To gain these benefits, you must have a plan of action and stick to it. Consistency is the name of the game.
Prospecting – Business Development Area
Knowledge and skills taught in this session:
- What to consider when establishing a farm.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
What to consider when establishing a farm.
There are no set criteria for how big your farm should be, but there are some guiding principles. It must be large enough to generate a worthwhile income, but not so large that you can’t manage it. It is better to work a small farm consistently and thoughtfully than a large one haphazardly. You can always expand later. If your farm is too big, it can be de-motivational.
To assess a potential farm, you must know the numbers for the area; for example: What is the average sale price? The average sale time? How many properties sell each month and year?
Here is a worksheet for calculating the likely income from an area. The figures supplied for home turnover and ‘orphans’ are statistical averages; if you can obtain these figures for your area, all the better.
| The number of homes in the area is | A |
| On average, people sell their home once every seven years. Therefore, in any one year, one seventh, or about 14%, of the homes in the area will sell. 14% of a is | B |
| Statistically, 70% of the sellers will be real estate ‘orphans’ and, as a farmer, you can adopt some of these. Therefore, 70% of B is your number of opportunities to list, which is | C |
| You should aim to get at least 33% of these. 33% of C is | D |
| If you expect a conservative 80% of these listings to sell, your number of sales will be 80% of D, which is | E |
| The average net commission in your office is | F |
| Therefore, your likely income from the area is E x F, which is | G |
(To quantify a percentage of a given figure without a calculator, multiply the two together and divide by 100.)
Once you have decided on your farm area, you must develop a profile of your farm. Find out what and who you are dealing with. Drive around the area and become familiar with the streets, the architecture and types of homes, the transportation, schools, shops, recreation facilities and community services.
Remember: to become a good farmer, you must assume personal ownership of the territory
Exercise: Setting up your farm area
Exercise:
Use what you have learned so far to assess your farm area and the prospecting you are doing there.
If you do not have a farm, should you set one up? What area should it cover? Consider:
The average sale price.
The average sale time.
How many properties sell each month and year.
What size you can manage on a consistent basis.
Who will do any further research needed to assess the area? Who will work on the profile?
A to-do list and Farm area calculator can be downloaded here
Prospecting – Business Development Area 2
Knowledge and skills taught in this session:
- What direct mail is, what it involves and how to use it for prospecting on your farm.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
Direct mail
There are many ways that you can contact the people on your farm. This programme discusses the following four:
Direct mail
Door knocking
Telemarketing
Focused marketing.
This session discusses direct mail. The other three methods are covered in the next sessions.
Direct mail is a major exercise that consultants shouldn’t undertake on their own; it needs to be done with company management. It involves sending home owners mail that is addressed to them by name.
In some places, it is difficult to obtain owners’ names and there may be legislation governing privacy and the use of personal information. However, in some places you can still obtain names and addresses. Your local electoral roll is one possible source, although it does not differentiate between owners and tenants. E-mail is convenient but e-mail addresses can be even more difficult to obtain. And we don’t want to spam people.
Once you have the names and addresses of the home owners in your area, you write to them regularly. Things you can write about include:
What is happening in your area over the next month. Obtain the information from a bureau and put it on letterhead with your photo.
Sales in the area.
Listings in the area.
Auctions coming up.
Open homes.
These ideas can be used in conjunction with direct mailouts about listing and sale days. For example, you can mail to 400 home owners directly around a listing to say “Just listed come to the open day, the auction is on Saturday, we just sold it.”
Further ideas for mailouts can be downloaded here.
Here are some tips for creating direct mail:
Write for the reader, not yourself.
Don’t irritate readers.
Use headlines effectively.
Be sure you instruct readers clearly on how to respond to any offer.
Emphasise time limits.
Emphasise specials.
Encourage action with premiums.Use testimonials.
Use numbers and statistics.
Highlight honest guarantees.
Check your copy carefully for accuracy of content and presentation, and compliance with legal requirements.
Test your copy.
Learn from others.