As we approach July 4th, I can’t help but think about my own personal “Independence Day”. My Independence Day was September 1, 2002, and if you’ll indulge me I’d like to take a moment to share it with you. I hope that you’ll find it inspirational.
I came into real estate like many of you, as a second career. Being new to the business, I followed the advice of many experts whose books I’d read or whose training I took either in person or by recording.
Now, I should mention that I had very high expectations: I expected to replace the six-figure income I had earned in my previous career and I was willing to work hard to do it. Nearly all the experts agreed that I’d make a lot of money by marketing to my “sphere of influence”, producing a steady stream of referral business.
I was excited because I am a very relational person, I have a large network of friends and acquaintances, and I make friends easily. That meant I was sure to do well relying on referral based business as long as I was diligent to consistently prospect my network.
I divided my network by 25 (number of work days) so I would know how many to call each day, and worked through my database touching each person once a month by phone. I also mailed everyone my newsletter every month as well as postcards each time I got a new listing, which was about one a week. I was doing it just like I’d been trained — I was the poster child for networking or sphere of influence marketing.
After three months of doing that, I realized that I was on track to make a whopping $30 thousand for the year (which coincidentally was what the average agent made in 2002). Needless to say, that was a long way from six figures. The principle is simple: Do what everyone else is doing and you will get the results that everyone else is getting. Duh!
I decided that wouldn’t work for me. I had that “aha moment” where I realized that if I wanted to replace my income I needed to do something different. Sure, I was all for referral-based business — it seems easier because there is already a personal connection so there is not that “fear of rejection” or “fear of the unknown” like there is with meeting people outside your network.
The problem was that I realized that my network (and I had a large network because I had been a local business person for two decades) was not large enough to produce more transaction volume. I would need to have a much bigger network to make more money.
And even if I were somehow able to expand my personal network by three or four times, which was doubtful, I wouldn’t have the time to adequately prospect that network, much less actually practice any real estate. Let’s face it — there are only 24 hours in every day!
I was confronted with the simple reality that I would have to supplement that “easy” business with my own lead generation, and I had to figure out a way to do it inexpensively. I had a gut feeling that people had begun to shop online so I set out to find my additional customers there but my website was not producing any business.
I was forced to fundamentally rethink my website — to design a website that was focused on capturing leads and not just giving out information. And that changed everything. Nearly overnight, I went from famine to feast. I had so much business I had to either turn it away or find people to help me, so I began to hire agents and formed a team.
So, my Independence Day was the day I realized that I could no longer depend on the “automatic” referral business to make my income goals. I had been “dependent” on the size of my personal network, and so I was limited in how much business I could do and the income I could earn. When I realized I needed to generate my own leads and not wait for them to come to me, my life and real estate practice changed forever.
It was a decision. I DECIDED to be independent. The good news is that you can make that same decision. It’s actually easier now than it was in 2002 because you don’t have to figure out how to generate the leads like I did. I had to invent the technology to capture the business because it was not available anywhere. Today you don’t have to reinvent the wheel… you just have to DECIDE that you want to be independent.
Here’s the bottom line: This year the average agent will earn just over $40 thousand by doing almost exclusively referral-based business. If you’re okay with that sort of income, just do what everyone else is doing, and you can expect those same results. But if you’d like to quit being dependent on your personal network to bring you the business, join me and make this your Independence Day.