We really have an unlimited supply of what we can prospect. Webster defines prospecting as “seeking a potential customer; seeking with a vision of success.” In the definition, it doesn’t say waiting for the phone to ring, sending out postcards, or hoping someone calls you. It clearly says that prospecting is a seeking activity. Let me share a guarantee from ancient scripture. “Seek, and you shall find.” The guarantee is if you seek, you will find. I hear all the time from people, “Well, what if it doesn’t work?” You are assured it will work because seekers become finders.

The second segment of this definition is that we need to “seek with a vision of success.” Webster must have worked in a real estate office before. He knows how other Agents can try to pull you down or away from prospecting. You could even have Brokers who try to belittle you because of your prospecting. Webster was saying, get your mind to think positively, expect good results, focus on that, and you will succeed. Don’t let others negatively influence your vision of success.

The question isn’t should you or shouldn’t you prospect; the answer is “yes.” The options of what to prospect is wide open. There are unlimited sources to prospect for the generating of new leads and appointments. Being able to sort through the more competitive sources verses less competitive sources, reactive sources versus proactive sources, the possible sources and the probable sources to find your niche is critical.

I have included a chart to better illustrate the many options we have with regard to prospecting sources, categories, and competition level in those categories, and the controllable influence we have on our business success through prospecting.

REAL ESTATE BUSINESS SOURCES
Categories, Competition, Controllability
More Less
Competitive Competitive

Reactive Sources

Possible sources of their current or future direct business

* Open House Contacts
* Ad & Sign Calls
* Internet Contacts

Probable sources of other’s current or future direct business

Referral leads from other agents *
Referral leads from “referring businesses” *
Referral leads from “personal relationships” *

Proactive Sources

Possible sources of their current or future direct business

General/Cold Calling *
Specific Activity/Warm Calling *

Probable sources of their current direct business

* FSBO’s
* Expireds

Specific groups that are sources of their direct future business

Geographic/Demographic Farms *
Spheres of Influence *
Past Clients *

Specific groups that are sources of other’s current and future referral business

Past Clients *
Spheres of Influence *
Geographic/Demographic Farms *
We have the option to select more competitive sources to generate our leads. These more competitive sources mean that we are not usually the only Agent who knows about this prospect’s desire to buy or sell. They have revealed it to others. Those more competitive categories are open houses and/or sign calls, Internet contacts, even floor time. These are general sources for future business. To make the assumption that you are the only person or Agent who knows about these people’s desire to move is folly. People who are considering a move visit more than one website to request information, attend more than one open house, and call on more than one ad. To think otherwise is delusional. Other competitive sources that are excellent are FSBOs and expireds. There, we will be competing with the top level sales-skilled Agents in the marketplace. We have to possess Champion level sales skills to compete and win clients in these two categories with consistency. There are always a few exceptions to the rule. Those who operate in the world of commission cutting come to mind. To engage in commission cutting to attract clients doesn’t take a high level of any skill in sales or marketing. These people can attract the business of some FSBOs and expireds. If you enjoy competition, FSBOs and expireds are excellent options. I was created for competition. I enjoy competing, whether it’s business, athletics, or even games. If you are not that way, highly competitive areas will not bring you joy and satisfaction.

The less competitive options are referral leads from other Agents, personal relationships, and referring business. A referring business could be your mortgage organization, Insurance Agent, or Home Inspector. All these sources are less competitive because these people aren’t referring their business to twenty, ten, or even (in most cases) five Agents in your marketplace. Other less competitive sources would be geographic, demographic, or psychographic farms, spheres of influence, and past clients. Again, the number of Agents working the same people that you are trying to serve and secure to clients status is very low. Geographic farms are the most likely of all these sources to have multiple Agents working an area.

Some of you may be wondering why I put cold calling and warm calling in as less competitive. It’s because very few Agents actually do them. There are even fewer Agents who do them now since the advent of the “no call’ list. We all know what cold calling is but warm calling is merely creating a more targeted list and possibly sending a door opening marketing piece. An example of an effective strategy with little competition is sending a marketing piece to a non-owner occupied property and making warm calls to them after a big run up in real estate prices and then a softening in the marketplace.

I am personally not a proponent of cold call prospecting – calling down a crisscross directory for business. That is really the definition of cold call prospecting. Agents, and even sales trainers (especially the “magic pill guys” and “referral gurus”), usually try to categorize anyone who is a prospecting proponent as a cold call proponent as well. I sometimes get painted with this broad brush, but it’s not true. Even calling your past clients and sphere needs to be called what it is . . . prospecting. You can easily be in favor of prospecting and against cold calling, as I am. I am not against cold calling because it doesn’t work . . . because it does. I am against it because the return investment is too low. The margin between your effort and your results is not large enough. There are much higher-probability lead generation sources for your prospecting effort.

When evaluating the sources, you also must evaluate the ability to create the business or react to the business. If you spend your time in the proactive sources, like past clients, sphere of influence, farms (if you call them as well), FSBOs, expireds, and cold or warm calling; these are proactive ways to generate business. We can track the numbers and return on investment from our effort.

With the reactive sources, we are less in control of creating our desired outcome. In reactive sources, you don’t know the volume or time frame of the leads as completely. With an open house, for example, you don’t really know whether two people will show up or twenty. With the Internet, we have no idea the number of leads or when they will come. These are clearly reactive sources for prospecting and leads. The same is true of referrals from Agents, referral business, and personal relationships. With all of these, the timing of when and how frequently are uncertain.

The last option is the evaluation of the possible verses probable sources. A possibility is something that happens 50% of the time or less. A probability is something that happens 51% of the time or greater. The mark of a Champion is investing your time and effort in an area where the odds are better. Increasing your effort, time, energy, and expertise in past clients, sphere of influence, FSBOs, expireds, referrals from other Agents, referral business, and personal relationships will increase the results that you will receive. Investing less time in the possible sources will bring us a greater return if we re-invest the effort in the probable sources instead.