I believe out of every topic I’ve discussed on this website Farming is the most misunderstood and underrated. My goal for this post is to make you actually want to start a farm.
What Is Farming?
Farming is STRATEGICALLY targeting a specific audience that has done nothing to lead you believe they are going to need your services. We are going to market and prospect to them until we achieve “top of mind” and get business and referrals from them. Pretty simple. Since these are not “hand waver” leads (“Click here to learn more about the 2 different types of leads), it will require some patience and consistency. It takes time to achieve “top of mind” and even more time for someone to need your services after achieving “top of mind”. Anytime we are going for “top of mind” (“Click here” if you need to know what top of mind is) we need to be patient and consistent so this shouldn’t be a surprise.
My personal belief is if we change the name from “farming” to something else lead generators will be more willing to do it. Farming is a very powerful way to leverage a combination of marketing and prospecting (“Click here” if you need to review the difference) to capture more buyers AND SELLERS! People seem to believe that since it’s mostly marketing it will attract more buyers than sellers, but if you do it right, you should capture more sellers than buyers. That alone should be a reason to take Farming more seriously.
When Should I Start Farming?
As soon as you can afford to budget in your lead generation for a small farm. There is no benefit in waiting. The longer you wait to start your farm, the longer it will be until you begin to dominate the farm and see the big payoffs.
I think one of the problems with Farming is that people think because it’s marketing it will cost too much and take too long to pay off, so they avoid it and go straight for the internet leads. They believe they will see a return on their investment faster and will ultimately make less of an investment because of the faster ROI. I think that is a HUGE mistake. Personally, I would be setting up a small farm before I spend lots of money on internet leads. I’m going to list 5 good reasons why I believe this. If I’m wrong, tell me so in the comments.
- It creates referral leads and “top of mind”
- You will see a faster return on investment than you think
- The sooner you start farming, the faster your farm will take root and produce years of returns
- It’s a GREAT source of listings
- It doesn’t cost nearly as much in time or money as Internet Lead Generation does.
Let’s look at each in a little more detail:
It creates referral leads and “top of mind”
If you’ve ever taken my classes, courses or just read my posts then you know my main goal is to convince you that you will earn more money and spend less time doing it by getting “top of mind” referral leads. I’m not going to beat this topic to death on this post because it’s about Farming, but you can review my reasons why I think “top of mind” is so important by clicking on this link. If you want referral leads, and I think its safe to say that we all want referral leads, you need “top of mind”. The combination of marketing and prospecting I describe below will give you the “top of mind” and all of its benefits in less time than you’d think and for less money than you thought was possible…. If you build it right!
You will see a faster return on investment than you think
Remember, we are not just marketing here. We are also going to prospect. Marketing is notorious for taking a long time to return “top of mind” and an even longer time to see a return on your investment. This is why many lead generators avoid Farming. Lead generators who think like this are not necessarily wrong. If you Farm the traditional way and just send out expensive and slow direct mail post cards, they would be right. Not only will it cost you every month but it will take a long time to see a return on that investment.
However, I will show you how to greatly speed up the “top of mind” and referrals needed to make you want to Farm sooner rather than later. How? Prospecting has 2 important advantages over marketing. It costs very little and it shows a return on investment much faster. By combining a good dose of prospecting with a well-thought-out message to your “target” market, you will see all of the benefits of both methods.
The sooner you start farming, the faster your farm will take root and produce a high return year after year
The best way to describe this advantage is to “borrow” a question I heard in my first year in real estate from an absolute legend in the productivity training world, Zig Zigler. He asked “When is the best time to plant a tree?” The answer, of course, is “20 years ago, because the root system would be matured and strong and the tree would be growing faster than you would expect today”. He then goes on to say “of course, we can’t go back 20 years to plant a tree, so when is the next best time to plant a tree?” And the answer to that question is “today”.
It’s a GREAT source of listings
I don’t know why this surprises people so much. I have received dozens of emails or phone calls from real estate agents that I’ve trained expressing surprise in how effective Farming is at getting listings. It shouldn’t be too surprising. Once your Farm takes hold, your real estate signs will be all over the place and everyone in the farm will know you and see you as the real estate expert for their area. Who else are they going to call when they are ready to sell????
The truth is, if they have a friend in real estate who is doing a “top of mind” system like ours, then you are probably out of luck and won’t get that listing regardless of dominant of a Farm you establish because “top of mind” is just that powerful.
But here’s the good news… Very few real estate agents go through the steps we teach to get you “top of mind” from your sphere of influence, so you rarely have to worry about that. In fact, the more you dominate the Farm, the more “top of mind” you get and the more referrals and listings you get. Yes, I know this sounds too simple, but as you will read in a bit, it’s very real and I have done it.
It doesn’t cost nearly as much in time or money as Internet Lead Generation does
When I say “cost” I generally mean how much you have to spend before seeing the return on investment. Lead Generation should never actually be an expense. Lead Generation costs are an investment. The revenue achieved should always rise above the amount spent. If lead generation becomes an expense, you will be out of business before too long.
Expenses are things like desk fees, splits with your office, business cards, signs, etc. Lead Generation is putting money out there to get business and earning back more than you spent. So… you may spend a good amount of money on something like Farming, but the cost will be low as long as you stick with it and do it right.
In this case, however, I am talking about low “cost” in the more traditional sense of taking less out of your pocket than you would think. This is because not everything we do will be expensive marketing. By mixing in a good amount of prospecting, we will see the cost go down because prospecting is significantly less expensive than marketing is. To further bolster my claim of it costing less than you think, I will discuss a way to involve partners to help you split the cost of a farm if you plan outs carefully. (More on that below)
People hate to think about this for some reason, but you do not have to spent anything on marketing to farm. Think back to our discussion on Time vs Money. (“Click here” to review) When you start your career, you probably have more time than money. We also introduce the concept of leveraging the one you have more of to help with lack of the other. In this example, you would use your free time to compensate for the lack of money to create full color postcards that are mailed out for you.
For an example, let’s say your goal is to send a post card once a month to your farm. Now let’s say you have 100 homes in your farm. At roughly $1.20 per post card, you are committing to $120/mo. That’s a lot of money for someone just starting out. How can you fix this? Substitute time for money. Instead of buying postcards, create something on your computer and ask your broker if you can print it at the office. It may be free or you may have to pay for copy. Keep it simple, some good information (more on that later) on a piece of colored paper in black and white will do the trick. Now our cost per handout is down to about 10 cents and we dropped our monthly bill from $120 to $10, as long as we get out in the neighborhood and hand deliver them. Hand delivering not only saves you large amounts of money but it turns a traditional marketing opportunity into a prospecting oppourity! You will see and talk to the people who live there, making the “top of mind” and eventual domination of the Farm much faster
I was in this situation when I got started in real estate. I had a lot of time and a little money so I used to create a market snapshot of the farm area. It was nothing more than a little letter from me following by a second page showing what sold and for how much. To be “fancy” I printed it on blue paper. 😊
Why I Like Farming So Much
While I was taking classes and studying to earn my Real Estate License, I was working in a mattress store. I had some free time since it wasn’t a very busy store and decided I would use it to start to understand what I would need to do AFTER getting the Real Estate License.
I went to a book store (don’t laugh, it was 1999 and they still existed) and was looking through the productivity books for real estate agents when I ran into a book by Danielle Kennedy. It was called “My First year in Real Estate” I would love to put a link to the book here, but I did an Amazon and Google search and can’t find it. It’s been a long time, so it’s possible I have the title wrong but am 100% sure it says “Your First Year”.
Anyway, there was a section of the book on Farming. I will never forget it. I was sitting in the empty store, reading this book and rolling my eyes at the nonsense she had written. I remember thinking “Yeah, right! Like that would ever happen!” I was getting annoyed because I hate being oversold on something. She easily convinced me that Farming would be a good thing to do as soon as possible but the over-the-top claims she was making about it made me almost stop reading the book. Here are some of the claims that I can remember.
- While driving through the neighborhood people living in the farm would wave and say “Hi Danielle!” even though she didn’t know them.
- While visiting the supermarket in the neighborhood people would come up to her and say how much they love the mailers and handouts she was using in her Farming efforts.
- While going to show a house, a neighbor flagged her down and asked her to stop by when she finished with her showing so she could list their home as well.
- She would receive phone calls from people in the neighborhood several times a year asking her to come by and tell them what their home was worth.
- She would receive referral phone calls from people outside of her Farm who were referred to her by people in her Farm, even though she had no idea who the person who gave the referral was.
I laugh as I type this because within 1 year of me reading that book, every single one of those things happened to me! I have never met Danielle Kennedy but if I ever do, I will immediately thank her for helping me get my real estate career off the ground.
What Do I Need To Know Before I Start My First Farm
Your Farm is your Farm for the long term. There’s no quitting
I can’t stress this enough. Your farm is designed to be with you for your entire real estate career. The key words here are “patience and consistency” Rule #1 in Farming is the Farm you chose is yours for life, so you better pick wisely. You can’t really lose money farming until you quit Farming. In other words, the longer you work your farm and build “top of mind” the more likely you are to see a return on your investment, even if it takes 3 times as long as you expected or hoped. Because of this, you really can’t lose because eventually, the Farm will take root and you will start selling houses in the area.
Once you start getting those referrals and listings, it will just keep coming and no matter how long it took, you will make that money back. On the other side of the coin is what happens if you quit. If you aren’t seeing a return, it’s got to be for 1 of 2 reasons. You haven’t waited long enough or you weren’t consistent enough. Consistency is key. You can’t give people the chance to forget you because they don’t know you!
As for patience, it can happen right away (if you get lucky) or it can take years. You need to go into farming realizing you are going to be paying out for a while before you see a return. If you quit before it pays off, you lost every dollar that you’ve invested in your farm because as soon as you quit, any “top of mind” you got is gone, which means any chance of seeing a payoff on your investment is gone as well. I really mean it. Don’t quit your farm. It’s the only way to lose on this adventure.
How My First Farm Was Successful
You will soon read what you need to know to pick and work a farm successfully. I did not have access to this information when I picked my first farm and I just picked a neighborhood and started walking around dropping off flyers once a month and I got incredibly lucky!
Here is how it started. The very first Farming piece I sent out was a letter that I mailed. My farm was only about 80 addresses, so I figured I could afford to pay for one mailing to get things rolling. I included a letter that was so bad that I still cringe when I think about it today. Actually, you can read the letter if you have a Top Producer account because 20+ years later, it’s still the first letter in their “12 Month Farm Campaign” I also attached a 2nd sheet with a list of properties in the area that have sold, along with the # of bedrooms and bathrooms, sq. footage, lot size, and of course sold price. I told them I would be providing this data every month and if anyone was interested in selling to let me know.
About a week later, I got a phone call from an “absentee owner” (“Click here” to learn more about absentee owners and what a great niche they are) who absolutely did NOT understand what I was saying. He thought I was saying that I had sold all of the properties on the second page! I did not correct him. I drove about an hour away to meet with him and listedthe first of many properties in that little Farm.
Yes, agree that I was very lucky! But then again, we make our own luck. If I didn’t pick the farm, create the mailing and send it out, then it couldn’t have ever happened.
I immediately mailed out a “just posted”, “open house” and soon after “just sold” postcard. We call this “Circle Marketing” (“Click here” to learn more about Circle Marketing) While this was happening, I dropped off my second marketing piece, going door to door. Suddenly, I was saturating the area with my marketing and the sign. I also had a friend who lived in the neighborhood so I was there a lot.
I kept it up. Every month I dropped off another marketing piece and I started to pick up listings in my farm area. It took about 7 months for the 2nd listing to come in. I did my “circle marketing” again (Just Listed, Open House and Just Sold postcards) as well as my regular handouts…. People saw me walking around and dropping off the marketing pieces, they saw another sign, they received the circle marketing postcards and suddenly, I was all over the neighborhood and I was gaining “top of mind” amongst the neighbors.
Finally, one day, it happened! I was sitting in front of one of my listings and when the buyers pulled up, I got out of the car and just as I was greeting them I heard someone behind me yell out “Greg? You’re Greg, right?” I said yes and they asked me to please stop by when I was done with my customers because they wanted to talk to me about listing their home! I immediately thought back to Danielle Kennedy’s book and all of the eye rolling I did when she wrote about this and I said a silent apology to her 🙂
The final thing I will tell you about my first and favorite farm is that one day, my broker approached me and with a smile said, “I got a complaint about you today.” I was shocked. I had no idea what I did wrong. He told me that a guy from my farm called and complained that I was (and I quote) “Filling up my mailbox with all of his junk mail postcards!” I explained to my broker that I sent Just Listed, Open House, and Just Sold cards whenever I got a listing in the neighborhood and a once a month marketing piece. I was starting to sell so many houses in the neighborhood that he found my circle marketing pieces to be a nuisance. THAT, my friends, IS TOTAL “TOP OF MIND!”
What Are the 3 Types of Farms?
- Geographic Farm
- Demographic Farm
- Sociographic Farm
Geographic Farm
Far and away the most common type of farm. This farm is chosen due to the targets’ geographic proximity. Almost all Farms are geographic. There are a lot of advantages to a geogrphic farm. The biggest advantage is the convenience of walking the Farm. Everyone is together, and to make it even better, when you start to dominate the farm, all of your For Sale signs will stand out when they are all over the same neighborhood.
Demographic Farm
Demographic farm is the second most likely type of Farm. Unlike a Geographic farm, it is more focused on (no surprise here) demographics. Things like age, income, families with children at an age where they are likely to move out soon, retirees, and anything like that. The advantage to this type of farm is you can target your marketing, prospecting and give-aways to items of interest to people of a certain demographic. For example, if your Demographic Farm (or niche) is “First Time Buyers” you can use marketing materials that discuss the basics of buying a home, how to raise credit scores, different types of mortgage programs, or any other information that a first time home buyer would find of interest.
Sociographic Farm
This is what we call a Farm that focuses on the social interests of the farm (or in this case it would most likely be called a “niche”). For example, if you have a love of skiing, you may focus on people who also have an interest in skiing. This is great because there are plenty of marketing partnership opportunities (which we will get into later) and again, your marketing and prospecting can focus on things like ski tips, discounts at ski stores, mountain and equipment reviews, etc. It makes you more memorable and people will look forward to receiving your materials.
OK, so which of these 3 farms is best? The simple answer is ALL OF THEM! Your best farm is a farm that includes all 3! Look at the image above. I have the three types of Farms overlapping. Look at the section shaded green. That is the “sweet” spot. The best-kept secret in Farming is right there. Find a farm that overlaps all 3. It gives you all of the advantages of all 3 types of farming and gives you a limitless amount of choices for marketing, prospecting AND partnering up with others to make your farm less expensive, more effective and looked forward to. All of these advantages give you a much shorter and faster route to “top of mind.”
If you’re wondering how you put all 3 together, just read on. It’s a lot easier than you may think. I’ll continue with my skiing example. Another very successful farm I had was near a ski resort when I moved to Maine. I love skiing as did most of the people who lived near the mountain. I simply went to the town office, pulled a list of all of the homeowners who lived near the mountain and my 2nd best farm was born.
This farm had all 3 types of farms and that made it real easy for me to get “top of mind”. First, the geographic was pretty obivous, they all lived around the ski resort and within a couple of miles of each other. The second, was the sociographic… Skiing. Third was the demographic. The people who lived there looked very similar demographically speaking. They were roughly the same age and income level. Almost all of them had children.
I had the perfect farm, and to make it even better, I made a deal with a local ski shop and told them I would advertise their business for free every month, year round if they promised to do 2 things. First, they had to make my farming postcard a 10% off coupon for the store, and second, they provided me with a tip on ski equipment every month. This way, each month, people who lived on the ski resort grounds received a 10% off coupon to the ski store and also a cool ski tip every single month. It also didn’t hurt that I skied there often and it wasn’t long until people were recognizing me on the mountain!
What Else Do I Need to Consider Before Choosing My Farm?
REMEMBER: You and Your Farm Are Together For the Rest of Your Real Estate Career! Choose Wisely
OK, now that you have learned the 3 types of farms and racked your brain to come up with the perfect farm that overlaps all 3, it’s time to get to the other questions.
- What’s the average price range in the area you’re considering? Is it worth farming?
- How convenient of a location is it for you to get to?
- Is it expandable?
- Do you have something in common with it?
- Is the price range something you’re comfortable with?
- How often do people put houses for sale in the area?
- Does someone else already dominate this farm?
Average Price
Remember when I told you I didn’t think of any of these things when I picked my first farm? Well, this was the first thing I didn’t consider. I told you how much I dominated that farm, but I did not tell you that the average house price was only $100K. It worked out OK because I did sooooooo much business there, but it was a big mistake. I could have put that effort into a different area and made 2 or 3 times as much with each sale. Make sure your listing prices make this farm worth your time and effort.
Location Convenience
This was another mistake I made with my first farm. It was in the same town I lived in, but clear across the other side of the town and I had to travel the length of a road that was legendary for bad traffic. It could take me 40 minutes to get there even though it was only about a 4 mile drive. It was kind of horrible. The fact is, if you’re going to give your Farm all of the attention it needs for you to dominate, you are going to be there more often than you would expect. I wish I could have back all the time I spent sitting in traffic trying to get there day after day after day. Don’t underestimate this part of your decision. It will have an affect on how much time and effort you put into your Farm.
Is it Expandable
This was an awful blow to me (yup, something else I got wrong in my first farm) When my farm blew up and I wanted to take full advantage of the domination and market penetration by expanding outward, I realized I couldn’t. This neighborhood had water on 2 sides, a highway on 1 side and a massive cliff across that high-traffic road I was complaining about in the last section on the 4th side. It was completely cut off from any other neighborhoods so there was no way to extend the radius of my farm.
Expanding a farm can be done in two ways. The first and the most preferred way is to expand the farm you’re already in.You expand it by just building further out from your current borders in 1 or multiple directions. This makes sense because you already have domination in the area so it’s much to expand the radius from the center of your farm. This way, you already have a foot in the door, and getting “top of mind” from the expanded area will happen much faster as a result. The second way is to start a second farm. In other words, you have to start all over again. Sure, you can make it work but you’ve got to admit that it’s going to take a lot longer and a lot more money than simply expanding your current Farm. Please do not even consider a second farm until you’ve dominated your first farm and can’t reasonably expand it anymore.
Comfortable Price
This is a little different than the “average price” above. The first discussion of price was more about making sure the price is not too low. This one is more about the price being in your comfort zone. This may not be a problem for you at all, but for some people, working in a multi-million dollar neighborhood can be uncomfortable or even overwhelming. You need to be comfortable in your farm area. You are going to spend a lot of time there, shop there, eat there and work there. If you’re a casual kind of person who is not comfortable in that environment, it’s best to not farm there.
This may seem like a limited belief… because it TOTALLY IS! But, when it comes to farming, I want you comfortable or you’re less likely to spend the time and effort required to dominate your farm.
Market Statistics
One day I was driving along and realized I missed my turn. I went into a neighborhood to reverse direction and found myself in a neighborhood that I fell in love with. The houses were the perfect price range, it was near where I lived and it was pretty obvious to me that it was a retirement area. I just needed the sociographic… and then I saw it, there was a 9 hole golf course tucked away in there. I decided this would be the perfect farm and I immediately started to Farm it.
Over 1 year went by and I did not get a single phone call, not even a nibble. Oh, I got to meet a few of the neighbors who recognized me when I was walking the neighborhood or at the market, but no one wanted to sell. After talking to a couple of neighbors I was told something that made feel kind of sick. He said, “I don’t think I’ve seen a house for sale here for at least 2 years.” I couldn’t believe it, so I went home and did a quick MLS search. Turns out he was wrong… It had been almost 3 years since a house sold there! The fact is, this neighborhood was a place where people didn’t leave. I also discovered that when they did sell, it was because they either passed away or couldn’t live in the house anymore and it was their kids who picked a real estate agent, not the seller so my Farming never took off there… I wasted a LOT of time and money. Learn from my mistake. Do a search and make sure there is some activity in the area.
Is there Competition
Last story, I promise. I moved to an awesome house in Providence, RI. It was 4 doors down from Providence College, the neighborhood was packed with houses on top of each other, the 3 types of farming were right there for me to work with and I was very excited about having a farm in my own neighborhood. There was just 1 problem with it. There was an agent (I won’t say his name but I still remember it because he was an awesome Farmer) who already had total domination. It was easy to figure it out because a week into living there I saw his signs all over the place, I received a marketing piece from him in the mail and a door hanger on my door. When 4th of July came around, he came out early in the morning and put a flag on everyone’s front lawn along with one of his business cards.
Guess what? I did not try to dominate that neighborhood. At first, I welcomed the challenge and the competition, but the more I thought about it I started to realize it was a really bad idea. He had such a huge lead over me and it takes so long to dominate a farm even when there isn’t any competition that it didn’t make sense for me to farm there. There were plenty of other neighborhoods and regardless of how badly I wanted to farm that neighborhood, I made the business decision and moved on to another area.
Well, that’s it. This was an extremely long post and if you made it this far then congratulations! You have shown the patience and commitment it takes to dominate your Farm. You now have all the information you need to get it started. Go get ’em!
If you have any great farming stories or ideas, PLEASE share them below so others can also dominate.
