Remember: Please share this article if you found it educational!
Today I spent the day with two of my Joint Venture coaching students and I was helping them build their Real Estate Joint Venture business from the ground up.
We built the outline of a business plan, a vision plan and a marketing plan - all very important elements to a successful business.
The most important of the three plans (for forward growth and sales) is easily the marketing plan.
Access to capital is a problem that real estate investors and entrepreneurs always have. We always run out of capital, invevitably. We aggressively invest in real estate, systems and people and we are constantly undercapitalized. There never seems to be enough capital to do everything that we want to do and play the game at the pace we want to play.
I showed my students a technique today that really helps to bring customers in the door and reconnect with our social networks that may or may not be properly "touched" by their personal branding and marketing.
Relationships are the core of the Real Estate businesses (or any business) and all revenues, whether direct or indirect come from having good relationships.
The problem with relationships is that they take constant maintenance to stay alive.
Some people may say that the "Grass is greener on the other side" until they find that the grass on the other side needs watering and maintenance as well - Relationships are very much like grass and require lots of work.
My students today were new investors who have done 3 deals to date. They have only used their own money to this point and they are ready to start growing their business by taking on Joint Venture money partners.
Not a bad proposition for a money partner... who wouldn't want half of the profits of a venture? Especially with no work?! Everyone loves a truly passive return and truly passive returns are hard to find.
I had my students make a list of 100 people that they knew and had them classify them as a "1" a "2" or a "3".
- 1's are people who knew them well personally, knew they were real estate investors and have an 80% chance of doing business with them.
- 2's are people that they see once in a while and have a 20% chance of doing business with them.
- 3's are people that they hardly ever see and are barely in touch with. These people have a 5% chance of doing business with my students.
After we had classified each person on the list as a 1,2 or 3 we had to make a marketing plan.
HOW TO DOUBLE YOUR INCOME WITH SANDWICHES AND POST CARDS.
The method for approaching the list of 100 is quite simple.
METHOD: Convert the 2's into 1's and the 3's into 2's. Move all of your prospects socially closer to you and build stronger relationships from the ground up to access more opportunity and more leads.
HOW TO WORK THE 1'S:
Everyone that my students classified as a 1 knows my students well and will easily transact business with them because a good relationship has already been built. All they have to do with these people is call them, explain what they are doing in their real estate business and ask for an opportunity to show their product. Very simple, these people are very forgiving and understanding, this is a warm market.
HOW TO WORK THE 2'S
The people who are classified as 2's are a little more cold and only have a 20% chance of doing business with my students. To convert the 2's into 1's and bring them closer socially, my students will have to call their 2's and invite them out to lunch.
VERY IMPORTANT: It's imperative that my students do not force a "pitch" at the lunch. They must focus on building relationships and perhaps ask for a referral at most. Nothing is more slimy than people who care less about relationships and have transactional lunch meetings. Focus on 58 minutes of relationships FIRST and 2 minutes of business at the very end. This is a very simple and effective formula.
Dining with the 2's will convert them into 1's. Some follow up will be required to keep them in the 1's category so that they do not fall out of touch again.
HOW TO WORK THE 3'S
The people classified as 3's are quite cold and only have a 5% chance of doing business with you. They know who you are but you have fallen out of touch. They likely have no idea what you are up to these days and you must re-establish contact.
Your goal is to convert the 3's into 2's and this is quite a simple process as well. In the old days, you would mail your "3's" a hand written letter to share how your life has been since you last saw them. In the letter you would also ask how they have been. Postcards, although old fashioned, are very effective at this. People just want to be touched, they want to know that you are thinking about them and want to know that you care about them. Make sure you put a call to action on the letter or postcard such as "call me, lets do lunch" so that you can actually establish some face to face contact. If you forget this step, your postcards will be wasted.
In the digital age, social media like Facebook, LinkedIn and Twitter have offered new alternatives for reaching people on the outer reaches of our social networks. Postcards are still very effective, but are somewhat out of style.
I prefer to write daily blogs and broadcast them out to my social circles to reach the depths of my networks. I try to keep my thoughts and experiences as interesting as possible to keep people engaged with my experience and happy to read my content. Value is the name of the game and if you can show enough value, your 3's will be calling you to have lunch very quickly (and passively) and more relationships will be built.
If you can follow this system for 1 year, after starting out in any business, you will very quickly have far too many prospects and clients than you can handle. You will quickly have to put your business in "second gear" and hire staff to deal with demand or you can stay small and never spend money on advertising again.
Thanks for reading,
P.S. Please share this article if you found it educational!