Why Create A Database for Your Real Estate Business

In real estate, as with many other businesses, your DATABASE is the foundation of your company. If you do not invest the necessary time to cultivate this critical part of your business, it can be a very costly mistake. Many agents either procrastinate or simply choose not to develop their database. Instead, they may try to buy their way into the market. When you constantly reinvent your source of business, the process is both inefficient and unstable.

Simply put, the people you know - your friends, family, and acquaintances - are going to be the source of your initial real estate business. A recent study done by the National Association of Realtors determined that 41% of sellers who used a real estate agent found their agents through a referral by friends or family. Nearly half of all listings on the market select their Realtors not through paid-for advertisement, but rather through a network of the people who they love and trust - their friends or family members.

NOW THAT YOU UNDERSTAND WHY WE CREATE A DATABASE. LET’S IDENTIFY SEVERAL IMPORTANT THINGS THAT YOU SHOULD KNOW. 

Important Database Information
Now that you understand why we create a database, let’s identify several important things that you should know.

Developing a database requires focus and patience.
You need to set the proper expectation as you begin the process so that you don't get discouraged and give up. Recognize this activity as the single best requirement that you must do to sustain your business. As with most things in life, the more time and energy that you put into this effort, the better and more immediate your results will be.

How many people do you need to have a FANTASTIC database?
The target is around 100 to 150 people. That’s it! If you are pleasantly surprised by that number, you should be! You will be shocked when you observe how your relatively small, yet carefully-constructed database returns the fruits of your labor!

“But what if I am new to the area and I don’t know anyone yet?
"Don’t worry! You still have plenty of opportunities to create a fantastic database, filling it with qualified individuals. In fact, you actually have a better chance of getting your database and touch system up and going under these conditions. Someone with hundreds of contacts must first organize those contacts, whereas you can start fresh and work your way up! In fact, your very first task is to identify 20 people who could pick you out in a line up. Think out of the box - your kid’s school (PTA), sporting events, neighborhood parties, HOA meetings, poker nights, Canasta, Bunco. There are more opportunities than you may realize at first!

Your database is a living artifact within your business, but it is only as good as the time and energy you put into it.
If you try to rush through the process it will be a disappointing experience for you with few or no results. The good news is that as you begin to see how your database produces strong leads, you won’t have to keep your database updated; you will want to keep it updated! Any time that you make a new, positive connection you will instinctively want to add them to your database.

Studies show that it takes 8 to 10 times of telling a person what it is that you do before they commit that to memory.
That seems like a lot of reminding, right?! Keep in mind, though, that while you might be telling your neighbor, John, for the third time that you are an agent, you will also be telling Beth, the soccer team mom, for the eighth time. You will always be working within your network of connections, so take the time to organically reconnect with the people around you.

If at any time you start to feel overwhelmed, take a breath.
Count to 10. And remember, how do you eat an elephant? One bite at a time! Remind yourself that you don’t need to try to eat the entire elephant at once! Break down the tasks in front of you into manageable, bite-size chunks.

Speaking of “managing,” consider how you manage your time.
Identify the points in your day when you are operating most efficiently. Are you most alert during the mid-morning after your second cup of coffee? Maybe you feel the most energized after lunch and you are sitting back down at your desk. Whenever it is, schedule your time so that you are performing your more challenging tasks during the times when you are firing on all cylinders! You are your boss and you control your schedule, so be a good boss to yourself.

Set a goal and schedule the time to collect the necessary contact information for 25 contacts per week.
That breaks down to 5 contacts per day across 5 days. That’s EASY!

The purpose of a pop-by

Of all the touch types in my training series, the pop-by might provide you the most return on your investment.

Why Invest in Pop-Bys?
In short, the purpose of doing a pop-by is to creatively remind your sphere of influence that you are a real estate professional. You can achieve this reminder by purchasing a few festive items, packaging them creatively, and delivering them to people within your database.

What is the Cost?
It’s important to have a predetermined Marketing budget as part of your total business budget, as Marketing activities falls under lead generation and is thus a business expense. While mentoring agents over the years, I’ve observed that most believe that they need to spend a lot of money and to provide an impressive gift. But that isn’t the purpose of the pop-by! Though you do want to provide a professional package, it does not have to be expensive to serve the purpose of being memorable. The total price per gift should be affordable, somewhere between $5.00-$7.00 per kit.

Who Gets a Pop-By?
Being a business owner, it’s imperative that you maintain a database consisting of all your friends, family members, neighbors, and past clients. As you consistently update your database, choose 75-100 people and tag them as your “top tier” sphere members. The top tier are those individuals who - when properly nurtured - are most likely to provide you with business, either directly or indirectly via referrals

Now that you’ve identified your top tier sphere members, now you will implement your pop-by strategy! You won’t deliver a pop-by gift to your top tier members every month. Nope, because that would be incredibly expensive and time-consuming. Instead, you will divide your top tier into 3 groups, and you will deliver rotate your delivery groups each month.

Example: 75 people are in the “top tier” of your database.
75 / 3= 25 people per group.
Following this delivery strategy, each member of your top tier will receive a pop-by gift from you 4 times per year (once per quarter).

How to Map Your Delivery Stragegy?
How do you know which top tier members receive a pop-by in which months? There are different strategies that you may employ for pop-by delivery. Some agents choose to divide their deliveries by geographic area and deliver n-number of gifts in specific towns, cities, and/or counties. I personally believe this is the most efficient use of your time, and therefore is my favorite delivery strategy.
Other agents will organize their delivery strategy by last name. Month 1: A-K, Month 2: L-R, Month 3: S-Z.
Another option is to hire a courier service to deliver your pop-bys for you. Keep and eye on this space for future courier delivery options!)
You can utilize either of these strategies, or develop a strategy of your own that best suits your business model and available capacity.