Database Operation: Contact Assembly and Inner Circuit Growth

This chapter, “Database Operation: Contact Gathering and Internal Circle Growth,” is a cornerstone in building an effective lead database in real estate. Success depends on building a strong and sustainable relationship network. This network, embodied in the lead database, is a strategic asset enabling continuous growth and increased market share.

The scientific significance stems from Relationship Marketing and Customer Relationship Management (CRM) principles. Relationship marketing focuses on building long-term customer relationships, increasing loyalty and positive recommendations. CRM uses technology and analytical tools to collect and analyze customer data, understand their needs and expectations, and provide customized services. This chapter aims to equip participants with the necessary tools and techniques to apply these principles effectively in the real estate context.

Chapter: Running the Database: Assembling Contacts and Growing Internal Circles

Introduction

This chapter aims to provide a deep understanding of how to effectively assemble contacts and build strong internal circles within a real estate lead database. It reviews the scientific principles behind classifying and developing contacts, focusing on practical applications that lead to increased productivity and success.

1. Contact Management Software (CMS): Tools and Technologies

• 1.1. Types of Contact Management Software

  • Desktop-based Software: Installed directly on your computer from a hard drive and can be linked via a network within the office.
  • Web-based Software: Accessed via the internet, allowing access to the database from anywhere at any time.

  • 1.2. Criteria for Choosing the Right Contact Management Software

  • Ease of Use: The software should be easy to learn and use, reducing the time and effort required to enter and manage data.

  • Customization: The ability to customize fields and categories to meet the specific needs of the real estate business.
  • Integration: The ability to integrate with other tools used in real estate, such as email marketing programs and project management software.
  • Scalability: The ability to expand to accommodate future growth in the database.
  • Cost: Comparing the cost between different options and evaluating the value for the price.

  • 1.3. Most Used Software

  • Top Producer: 33%

  • Online Agent: 22%
  • ACT!: 22%
  • Other (Outlook, Agent 2000, etc.): 36%

2. Assembling Contacts: Classification and Segmentation

• 2.1. Principles of Classification

  • Met: Includes individuals you know personally or via phone, who are likely to deal with you in the future.
  • Haven’t Met: Includes individuals you have not yet met, who are targeted through marketing and prospecting activities.
  • 2.2. Types of Business Resulting from Classification
  1. new❓: From contacts you haven’t met (Haven’t Met).
  2. Repeat: From contacts you have met (Met).
  3. Referral: Mostly from contacts you have met (Met).
     * 2.3. Database Segmentation into Subgroups
  • Haven’t Met:
    • General Public: A broad group of individuals who you haven’t met and don’t know you.
    • Target Group: Individuals you haven’t met but have been identified as potential clients based on specific criteria.
  • Met:
    • Network: Individuals you know personally or via phone, who may deal with you in the future.
    • Allied Resources: Individuals in fields related to real estate, who you are expected to deal with or receive referrals from regularly.
    • Advocates: Individuals who have dealt with you in the past and will continue to deal with you in the future, in addition to referring new clients to you.
    • Core Advocates: Influential individuals who can send a continuous stream of clients to you.

  • 2.4. Mathematical Equations to Measure Segmentation Effectiveness

  • Conversion Rate (CR): The percentage of potential clients who become actual clients.
    CR = (Number of Actual Clients / Number of Potential Clients) * 100

  • Customer Lifetime Value (CLV): An estimate of the total revenue that a customer will generate during their relationship with you.
    CLV = (Average Deal Value * Number of Annual Deals * Average Relationship Duration in Years) - Customer Acquisition Cost

3. Strategic Model for Lead Generation and Relationship building❓

• 3.1. Concept of Internal Circles

  The strategic model focuses on gradually moving contacts towards the internal circles of your database. The internal circles represent the most loyal people who are most likely to refer new business to you.
  * 3.2. Growth Strategies for Each Circle

  • General Public: Target them through broad marketing and prospecting activities.
  • Target Group: Implement highly targeted marketing campaigns.
  • Network: Launch more focused marketing campaigns aimed at building strong relationships and increasing the volume of business generated by each person.
  • Allied Resources: Market to them in the same way as the Network, in addition to meeting with them in person frequently.
  • Advocates: Market to them in the same way as Allied Resources, with frequent communication.
  • Core Advocates: Market to them in the same way as Advocates, in addition to providing services to them that contribute to improving their business.

  • 3.3. Key Performance Indicators (KPIs) for Internal Circle Growth

  • Rate of Contact Growth in Each Circle: Measuring the increase in the number of contacts in each circle over time.

  • Referral Rate: Measuring the number of referrals resulting from each circle.
  • Referral Value: Measuring the average value of deals resulting from referrals from each circle.

4. Feeding the Database Daily

• 4.1. Importance of Continuous Updates

  The database should be updated constantly to add new contacts and maintain the accuracy of information.
  * 4.2. When to Enter New Contacts?

  • When a potential client contacts you to inquire about buying or selling a property.
  • When meeting anyone who may be a potential client, allied resource, or advocate.

  • 4.3. Data Entry Operations

  • Use seller interview or buyer interview forms to enter basic information for clients who are in the process of completing a real estate transaction.

  • Update contact information with personal information (birthdays, hobbies, etc.) through a VIP questionnaire.
  • Enter relevant information for new contacts as soon as possible after meeting them.

5. Developing Internal Circles

• 5.1. Responsibility for Building Relationships

  • Your team is responsible for finding new contacts, adding them to the database, placing them in the appropriate plans, classifying them in the correct categories and groups, and maintaining their files with detailed notes.
  • You are responsible for maintaining, building, and sustaining the internal circles (Allied Resources, Advocates, and Core Advocates).

  • 5.2. Identifying People Within Internal Circles

  • Core Advocates: 5

  • Advocates: 50
  • Allied Resources: 100

6. Conclusion

Building a successful real estate lead database requires a scientific and systematic approach. By understanding the principles behind classifying and developing contacts, using the appropriate tools and technologies, and implementing effective strategies for lead generation and relationship building, you can achieve sustainable growth and increase productivity in your business.