My professional purpose is to help you, the broker, optimize your productivity and help you become the best version of yourself. Why? Because happy brokers sell more real estate. I do that by helping you handle challenges and opportunities that you face every day. If you can effectively manage situations that arise on a daily basis, you'll be more productive, live a more optimized life and, in turn, live a life that is the best version of you.
Today, I want to prove to you that your Top 100 (your database of top clients) should be looked at like an investment that you should manage and view as a long-term financial asset.
Before I prove my point, I'm going to go back to some content from last September and review what I mean by "TOP 100:”
Again, through research, I realized that 100 clients and prospects was the maximum that I could manage properly. This didn’t mean I only marketed to 100 clients, I just marketed differently to separate and unique segments within my database. I called my “vital few” my TOP 100 and segmented that group into separate and defined categories (Platinum clients, Gold clients and Silver clients and then contacts 101+ were my Fringe contacts). You’ve probably seen other categorization concepts using letters like A+, A, B etc). I named my categories after the American Express card types. I don’t remember the reason, but at that time, I just felt the words carried more weight than the lettering system. Also, I wanted to create my own theme.
Let me just take a minute and define each one of these terms and categories I created for my database:
TOP 100: The 100 most influential clients and prospects that “know you,” “like you” and “trust you” as their real estate broker and resource for all things real estate. 100 clients has been proven to be the highest number of clients that you can manage in an authentic way. All other contacts should be categorized as “Fringe” contacts.
Platinum Clients: The people that refer you multiple times a year or consistently do business with you like a developer or investor. They are the top 20% of your Top 100. I made a point to “touch” these clients every 21 days.
Gold Clients: The people that refer you occasionally or have done business with you randomly over the life of your career and introduce you occasionally. They are the next 30% down in your TOP 100. I made a point to “touch” these clients on a 30-day cycle.
Silver Clients: Prospects and past clients that have the potential to refer or do consistent business with you over the life of your career. This is the bottom 50% of your TOP 100. If they were a prospect, I wanted to send them content at least every 5-7 days and if they were a past client, I would put them on a 45-day “touch” schedule.
Fringe Clients: Everyone Else. They should remain on your low-cost marketing campaigns like email marketing and direct mail marketing. You should develop an email marketing campaign, segmented, with content delivered every 2 weeks.
In one of my September calls last year, I go on to describe why managing to a TOP 100 is so important. (Hint: It was the reason I doubled my business 4 times in 5 years and went from basically unemployed to a $37M business during the heart of a real estate crisis. I spent those 5 years focused on building and strengthening my TOP 100.)
But on to the point I want to make today, I want to start by asking you a question:
When I use the phrase "You really need to spend time in your database and reconnect with those clients and prospects that need your attention,” do you cringe? Do you feel guilty? Do you feel motivated to get after it? What I find interesting is that most brokers look at their database as something that is optional as in, "I know what you are saying Jim, but I'm going to do it my way. Managing a database seems like a lot of work." You may not come out and say those exact words but that is the look you have on your face and the tone you have in your voice. So I am going to take another approach today to prove to you that you are leaving significant revenue on the table if you do not have a database and relationship management strategy.
Let's take a look at the lifetime value of a "Platinum Client:” If you have a "Platinum,” that over a 10 year period of time, does 5 transactions and refers you 7 additional clients at an average of $700,000 that's $8,400,000 in production over that period. In terms of commission value, you are looking at around $175,000. If you invested just that revenue off of that one client in an income producing property or dropped it in an index fund earning an 8% annual return, just imagine what that would look like when you retired. The time needed to authentically and consistently manage that relationship might be 2-3 hours per year.
Now just imagine, if you had 20 "Platinums,” 30 "Golds" and 50 "Silvers that you managed properly, giving you a 20% return on your database? (Note: A Top 100 should net you 20% in referrals if managed consistently.) Where would your career and financial situation be in 5, 10, or 15 years?
So is your Top 100 your most important financial asset?
I think you could make a case that the additional revenue driven from this activity is what funds your other long-term investments, but you need to take this one idea and stress test it against your personal situation.
A couple of other important points about your Top 100:
- Your database is the only thing of value you could sell when you sunset your career. I have helped agents build a retirement "annuity" by setting up a master referral program based on their database.
- A CRM should be used to remind you to personally manage the relationship, not do the work for you. These equations are based on a "relationship based" model not a "transactional" model.
- Your clients want a relationship. They don't want to have to identify a new broker every time they buy and sell but if you "one night stand" them, out of principal they are going to move on.
- To do it right, you only need 5-7 hours a week of concentrated and intentional effort. You don't need 100 people to create a really nice business. You can turn the spigot on and off based on your lifestyle goals.
- Managing your database is a low cost/high impact activity. Anyone can do it because the barrier of entry is just time and a small investment in tech.
- Your database should remain yours and you should never give up your names to anyone who might use them for their own benefit.
- Some of the best relationship-based brokers I know operate off of a spreadsheet or google doc.
- The best CRM is the one you are going to use. New agents, start this mindset early.
- Working with people that know you, like you and trust you leads to a much more predictable and enjoyable business.
- You should be looking at the "results" just like you would look at an account balance or a valuation of any investment.
Team, I know you are hearing me and shaking your head, "yes.” You might even being saying to yourself, "Gosh, I really need to do that. Ugh, I've been needing to do it for years,” but we run the risk of you getting off this call and falling right back to old habits, so, as you look at the financial importance of your Top 100, I will make one last attempt to sell you on this concept. I am going to create a quick visual for those of you that are not sold or committed. So, let's say, over the course of a 20 year career of doing an average of $10,000,000 in sales without a database/relationship management strategy, my best estimate is that you are leaving at least double if not triple the production and revenue on the table. Now, I want you to take a minute and just contemplate that number in your head. Now, I want you to imagine those dollars in a big stack and I want you to take a lighter and light those millions of dollars of opportunity on fire. Watch it burn. That's what your scarcity mindset around this topic means to your long-term financial success and lifestyle. By not taking the initial action, making a small financial investment, committing to daily action, that is basically what you are doing.
So now that I have hopefully made my point, I will let you decide whether or not your Top 100 is your most important financial asset. Really put some thought into this and if you feel like you are doing great in this area, there is still a higher level of execution that you can reach.
