From Contacts to Core Advocates: Building Your Database

Chapter Title: From Contacts to core advocates❓: Building Your Database

Introduction

This chapter delves into the fundamental process of building a robust real estate database, transforming a collection of mere contacts into a network of core advocates. We will explore the scientific principles underpinning relationship marketing, applying them specifically to the context of real estate. Building a powerful database is not simply about accumulating names; it’s about strategically cultivating relationships that drive business growth and sustainability.

1. The Foundation: Defining Your Database Constituents

Before populating your database, understanding the different types of contacts is crucial. These can be broadly categorized, as the provided document indicates, into “Mets” and “Haven’t Mets,” each representing distinct opportunities. Furthermore, within the “Mets,” you can classify contacts further into a circle of influence, target groups, or even an advocate.

• 1.1 Haven’t Mets: Individuals you have yet to establish a personal connection with. This category includes the general public and targeted demographics.

  • 1.1.1 Opportunities: Primarily represent new business opportunities. Strategic, branded marketing can potentially transition Haven’t Mets into referral sources.

• 1.2 Mets: Individuals with whom you have established a connection. This group encompasses family, friends, neighbors, past clients, and allied resources.

  • 1.2.1 Opportunities: Provide repeat business, referrals, and potentially new business.

• 1.3 The Advocacy Spectrum: Cultivating Inner Circles: Moving Mets along a relationship spectrum is the goal:

  • 1.3.1 General Public: Broadest category, encompassing potential Haven’t Mets.
  • 1.3.2 Target Group: A specific demographic or niche market you aim to reach (e.g., mortgage loan officers).
  • 1.3.3 Network: Individuals within your sphere of influence, representing potential Mets.
  • 1.3.4 Allied Resources: Professionals in related fields who can provide synergistic benefits and referrals.
  • 1.3.5 Advocates: Clients or contacts who actively promote your services based on positive experiences.
  • 1.3.6 Core Advocates: The inner circle. Loyal champions who consistently generate referrals and actively contribute to your business growth.

2. The Science of Relationship Building: Applying social❓ Exchange Theory

The transformation of a “Haven’t Met” into a “Core Advocate” relies on the principles of Social Exchange Theory. This sociological and psychological theory posits that social behavior is the result of a cost-benefit analysis. Individuals engage in relationships when the perceived benefits outweigh the costs.

• 2.1 Core Principles:

  • 2.1.1 Reciprocity: People tend to return a favor or act in kind. Providing value to your contacts, even before they become clients, fosters a sense of obligation.
  • 2.1.2 Trust: Building a reputation for honesty, integrity, and competence is crucial. Trust reduces the perceived risk associated with engaging your services.
  • 2.1.3 Perceived Value: The benefits of working with you must outweigh the perceived costs (financial, time, effort).
  • 2.1.4 Commitment: Consistent communication and relationship nurturing increase commitment and loyalty.

• 2.2 Mathematical Representation of Relationship Strength (Conceptual):

  Let:

  • RS = Relationship Strength
  • B = Perceived Benefits (value provided, expertise, positive experiences)
  • C = Perceived Costs (financial investment, time commitment, perceived risk)
  • k = Constant representing individual propensity to form relationships (personality, past experiences)

  Then:

  RS = k * ( B / C )

  This equation highlights that Relationship Strength is directly proportional to the perceived benefits and inversely proportional to the perceived costs. A higher k value indicates an individual who is naturally more inclined to build relationships.

• 2.3 Experiment: Value Proposition Testing:

  • Objective: Determine which value-added services resonate most strongly with your target audience.
  • Method: Conduct A/B testing with different marketing messages highlighting various benefits (e.g., market expertise, negotiation skills, staging advice). Track response rates and conversion rates to identify the most effective value propositions.
  • Analysis: Analyze the data to determine which B (Perceived Benefit) factors in the equation above have the greatest impact on lead generation and conversion.

3. Database Size and Growth: Modeling Lead Generation

The Millionaire Real Estate Agent model provides valuable insights into the relationship between database size and transaction volume. However, these models must be adapted to individual circumstances and market conditions.

• 3.1 Conversion Rates:

  • 3.1.1 Mets: The provided text suggests a target conversion rate of 12:2 (12 contacts resulting in 2 transactions) after consistent engagement through an “8 x 8” and “33 Touch” program.
  • 3.1.2 Haven’t Mets: A significantly lower conversion rate of 50:1 is expected with a “12 Direct” marketing program.
    These figures are averages. Conversion rates are dependent on various factors including your brand, the market conditions, your communication skills, and the quality of the leads.

• 3.2 Database Growth Model: The KWU IGNITE program advocates adding 10 new contacts❓❓ daily. This leads to a database of approximately 2000❓❓ names after 200 working days.

• 3.3 Mathematical Model of Database Growth:

  Let:

  • D(t) = Database size at time t (in days)
  • d = Daily number of new contacts added
  • t = Time in days
  • D(0) = Initial database size

  Then:

  D(t) = D(0) + d * t

  Assuming D(0) = 0 and d = 10, then D(200) = 2000.

• 3.4 Scaling Your Database:

  The appropriate database size depends on your target transaction volume. Scaling the ratios provided in the document linearly is not accurate. The relationship between database size and transaction volume is likely logarithmic. You must also consider the following caveats:

  • 3.4.1 Time Dependency: The benefit of a Mets database compounds over time due to repeat and referral business. It can take 2-5 years of consistent engagement to achieve optimal conversion rates.
  • 3.4.2 Database Decay: Contact information becomes outdated. Regular database maintenance is crucial to ensure accuracy and prevent data decay.
  • 3.4.3 Segmented Marketing: Not all contacts respond to the same marketing message. Segmenting your database and tailoring your communications is essential for maximizing conversion rates.

4. Acquiring Contacts: Strategies for Building Your Database

Building a database involves actively seeking out and capturing contact information from both Mets and Haven’t Mets.

• 4.1 Building Your Mets Database:

  • 4.1.1 Existing Network: Start with your existing network: family, friends, neighbors, former colleagues, and service providers.
  • 4.1.2 Networking Events: Attend industry events, community gatherings, and social functions to meet new people.
  • 4.1.3 Leverage Social Media: Engage with potential clients and build relationships on social media platforms.

• 4.2 Building Your Haven’t Mets Database:

  • 4.2.1 Title Companies: Often provide contact lists free of charge.
  • 4.2.2 Third-Party Vendors: Purchase lists from credit bureaus or marketing agencies.
  • 4.2.3 Geographic Farming: Target specific neighborhoods or communities with tailored marketing campaigns.

• 4.3 Practical Considerations:

  • 4.3.1 Data Privacy: Comply with all data privacy regulations (e.g., GDPR, CCPA) when collecting and using contact information. Obtain explicit consent for marketing communications.
  • 4.3.2 Data Hygiene: Regularly cleanse your database to remove duplicates, correct errors, and update outdated information.

5. Feeding Your Database: Data Collection and Enrichment

Building a database is only half the battle. To effectively leverage it, you must continuously feed it with valuable information.

• 5.1 The Daily 10/4: Embrace the habit of adding 10 new contacts and writing 10 notes daily. This reinforces a consistent focus on database growth and relationship nurturing. The ‘4’ refers to activities that are conducted, one of which is weekly rather than daily.

• 5.2 Essential Data Points:

  • 5.2.1 Contact Information: Name, address, phone number, email address.
  • 5.2.2 Demographic Data: Age, occupation, family status.
  • 5.2.3 Psychographic Data: Interests, hobbies, lifestyle.
  • 5.2.4 Transactional Data: Past transactions, property preferences, budget.
  • 5.2.5 Communication History: Record all interactions with each contact, including phone calls, emails, and meetings.
  • 5.2.6 Lead Source: Identify the source of each lead (e.g., referral, website, open house) to track marketing effectiveness.
  • 5.3 The FORD Technique: Utilizes Family, Occupation, Recreation and Dreams to collect valuable psychographic data that enables personalized communication.

• 5.4 Buyer/Seller Data: Gather specific information relevant to their needs and preferences. This could include: Desired property features, price range, urgency, and financial information.

• 5.5 Data Enrichment Techniques:

  • 5.5.1 Social Media Profiling: Use social media platforms to gather additional information about your contacts’ interests, hobbies, and affiliations.
  • 5.5.2 Online Research: Utilize online search engines and public records databases to verify and supplement contact information.
  • 5.5.3 Surveys and Questionnaires: Conduct surveys to gather insights into your contacts’ needs and preferences.

6. Segmentation and Personalization: Tailoring Your Communications

Effective database marketing requires segmenting your contacts into relevant groups and tailoring your communications to their specific needs and interests.

• 6.1 Segmentation Criteria:

  • 6.1.1 Demographics: Age, income, location.
  • 6.1.2 Psychographics: Interests, lifestyle, values.
  • 6.1.3 Transaction History: Past clients, potential buyers, potential sellers.
  • 6.1.4 Lead Source: Referral sources, online leads, open house attendees.
  • 6.1.5 Stage in Buying/Selling Process: Prospects, leads, qualified leads, clients.

• 6.2 Personalization Strategies:

  • 6.2.1 Personalized Emails: Use your contacts’ names and other relevant information to create personalized email messages.
  • 6.2.2 Targeted Content: Deliver content that is relevant to your contacts’ interests and needs.
  • 6.2.3 Customized Offers: Provide customized offers and promotions based on your contacts’ preferences.
  • 6.2.4 Automated Workflows: Create automated workflows to deliver personalized communications at the right time.

Conclusion

Building a powerful real estate database is an ongoing process that requires a strategic approach, consistent effort, and a deep understanding of relationship marketing principles. By focusing on providing value, building trust, and nurturing relationships, you can transform a collection of contacts into a network of core advocates who will drive your business success. This chapter provides a framework for understanding the scientific underpinnings of this process, including the underlying theories and practical techniques that can be implemented in building a healthy database.