Circle Marketing, simply stated is using an opportunity, such as a new listing or an open house or a home that just sold, to reach out to the people who live in a certain radius around it (hence why it’s called “Circle Marketing”, more on that later) and asking them the ultimate question… “Are you or anyone you know looking to buy or sell a home?” The answer will usually be “no”, but that’s OK, because the more we hear “No”, the more we will hear “Yes!” The goal of Circle Marketing is to ask that question as much as we can because Circle Marketing is a numbers game. Keep hearing “no” until you finally hear “yes” and then make thousands of dollars!
Lead generation is loaded with oddly named activities, such as Farming and Circle Marketing. These 2 types of prospecting based lead generation are often confused with each other. In this post, we will discuss the difference between the two and then take a deeper look at Circle Marketing. (“Click here” for a deeper look at Farming)
Circle Marketing vs Farming: What’s the Difference?
There are 3 main reasons why Circle Marketing and Farming are confused:
- All Circle Marketing and most Farming are geographically targeted (although for different reasons)
- They are both Prospecting based and Marketing enhanced.
- Almost all Lead Generators ignore the Prospecting and focus just on the Marketing. In other words, as I described at the beginning of this article, most people just send direct mail postcards to all the addresses on the list and then call it a day.
The 3 items above cause problems and make Circle Markets much less effective. They are much more different than similar. Here are the top 3 differences, followed by an explanation.
- Farming is Forever, Circle Marketing is temporary
- We are working for different types of leads
- Turning a Circle Market into a Farm can cause you all sorts of problems
Farming Is Forever, Circle Marketing is Temporary
Let’s start with the biggest difference…. Farming an area is meant to last for as long as you’re in business while Circle Marketing is taking advantage of something, usually a listing, to see if there are any others in the same area who are thinking of buying or selling in the near future. It is meant to be hit several times, rather aggressively to try to “smoke out” some “hand waver leads” (“Click here” if you don’t know what a hand-waver lead is)
We Are Working For Different Types of Leads
To put in terms we use on this website, we are looking for different end results. With Farming, we are trying to get “Top of mind” and with Circle Marketing, we are trying to get “hand wavers”. (“Click here” to learn more about the difference between those 2 types of leads) These leads need to be cultivated and nurtured. In other words, they usually don’t turn into business instantly. You will need to stay in touch and be patient. Be there when they are ready and it will pay off. Keep mind that you will need a good lead conversion system to convert the lead into a sale after capturing the lead. (“Click here” to learn more about how to convert leads)
Turning a Circle Market Into a Farm Can Cause Problems
I hear this one all the time… “I just had a great listing an an awesome neighborhood and I did some Circle Marketing and got a response! I think I am going to turn this into my next farm!” I actually know real estate agents who have 10 or more farms for just this reason. Before you make this decision, please please please read the post on “Farming” (“Click here” to read the Farming Post) and pay particular attention to all of the items you need to think about and research BEFORE picking a farm. If you don’t do that, and you just randomly decide that this Circle Market is going to be your next farm, you could find yourself:
- In a bad farm due to any number or reasons outlined in the Farming post.
- Way overbudget on your marketing because each farm requires more money for marketing pieces and most likely postage.
- Way overbudget on your time because Farming requires prospecting to work properly, and prospecting requires time! (“Click here” for more on time vs money and marketing vs prospecting)
- You will quite possibly start to neglect your other farm (or farms) and do irreparable damage to the “top of mind” you’ve gained in the other farm.
How Effective is Circle Marketing?
Let me answer that question by telling you one of the most important policies I have when I choose to coach or consult a person or a team. Rule #1, and there are no exceptions… Everyone involved in my coaching/consulting must agree to 200 Circle Marketing calls per month! Of course, I am immediately asked why, and I tell them that Coaching/Consulting is meant to be a revenue source, not an expense. My coaching and consulting costs a good amount of money and I want to make sure I’m not taking someone’s money if there is no chance of them making it back with revenue generated from the things they learn. I never want to be considered an “expense!” The best way to make sure I am never an expense is to make sure they are Circle Marketing because if they make 200 Circle Marketing calls a month, the math tells me that after about 3 months, they should start closing one deal every 2 months, or 6 deals a year (4 deals the first year) and that is more than enough money to not only pay for my coaching/consulting, but also to make a tidy little profit as well. And another reason, of course, is I do not want to spend time coaching and consulting with people who aren’t willing to make their phone calls. For people who won’t make their calls, we have a program to help them along. (“Click here” to see how we can help those who don’t want to make their calls)
In short, Circle Marketing, when done effectively is extremely effective because…
Real Estate is a numbers game. The more you hear “no”
the more you will hear “yes”
If you make 200 calls a month (50 calls a week) you may hear “no” 195-199 times…. BUT every once in a while, you will hear a “yes”. How do I know this? I’ll say it again… BECAUSE REAL ESTATE IS A NUMBERS GAME. The more you hear no, the more you will hear yes. Let’s do some quick math. These numbers are based on my clients who are required to track their numbers, so I believe them to be as accurate as any other numbers out there.
If I make 200 calls a month for 1 year, that is 2400 calls a year. (I am going to round up to make the math worse for my case just so you know I’m not tilting the numbers in my favor to make a point) Let’s just say that 1 of every 200 calls gives you a “Yes, I am interested”. That means you captured 12 leads. Out of those 12 leads, 6 of them will work with you and 4 of them will buy a house from you. (Remember, I am skewing the numbers to the absolute worst possible scenarios). If your average commission is $5,000 per closing, you will have earned an extra $20,000 in GCI by spending roughly 1 hour a week making 50 phone calls. That’s 52 hours a week to make $20,000, which means those Circle Marketing calls are worth roughly $380/hour! That’s right, $380 an hour to simply call strangers and read some scripts (“Click here” for some Circle Marketing Scripts) If that doesn’t get you Circle Marketing, I don’t know what will. I bet we can all find an hour a week to do some Circle Marketing!
Why Do People Hate to Circle Market?
Along with calling your sphere of Influence, Circle Marketing is one of the purest forms of Prospecting. Fact is, people don’t like to Prospect because it makes them uncomfortable. Calling on friends (calling your sphere) or calling on strangers (calling a Circle Market) is difficult at first, but like anything we find difficult in the beginning, it gets easier and easier the more we do it. An old friend of mine once told me something I have never forgotten and refer back to it often in my day to day life.
If you aren’t feeling some discomfort and pain, you aren’t growing!
Making your phone calls and prospecting properly is the “pain” you need to feel to grow your real estate business. I truly believe this, and still have to remind myself of it whenever I get too comfortable. If you’re wondering how I get comfortable, it’s because the more I do the uncomfortable things, the more comfortable I become and then I stop growing!
I’m going to issue you a challenge….
Download one of my scripts for Circle Marketing and then record yourself reading it out loud. Stop recording and read it out loud 20 more times and then record yourself again. Once you’ve done that, go back and listen to both recorded calls and see how much better you sound the second time. You will see that simply practicing a script is all it takes to make the script sound more natural and work better. Now, take that new found confidence and start making some live calls. It’s the first step to feeling some discomfort and growing.
How Do I Pick a Circle Market and What Is It?
Circle marketing is called “Circle Marketing” because you need to make a circle on a map to target who you want to call on. Remember the days of math class when your teacher discussed radius and diameter of a circle? The “radius” of a circle was a line from the exact center of the circle to the outer edge of the circle. That’s pretty much what we are doing here. We are going to “drop a pin” on a map and then draw a circle as far out as we want to market to and wallah! You have a “Circle Market”. Here’s an example…
The red pin in the middle of this map is our subject. This can be a listing, it can be an open house you’re working for someone, it can be a “just sold”, it can be a home that sold for 20% higher than list, it can be a home that went pending in just 24 hours… It can be ANYTHING that can give you an opportunity to make calls to the neighbors and make them aware of it. For this example, I am going to use a really common Circle Marketing opportunity… “Just Listed” Let’s say we just listed a house and want to “Circle Market” to the neighbors by delivering a “Just Listed”, “Open House”, and (hopefully) “Just Sold” Postcard. We can deliver these in a variety of ways. Obviously we can mail them. The problem with mailing them is that it costs a good amount of money and can take quite a while to get delivered. It also is the least effective way of meeting people.
Remember, our goal in Circle Marketing is to ask “Who do you know that is looking to buy or sell real estate”
The first thing we do is pick our subject property, which, in this example, is a home we just listed. It is marked with the pin in the middle of this map. Next, we use some type of software such as Google Maps or a company that specializes in mailing lists to determine how large our circle should be. This is usually determined by your budget for time and money. I personally like to keep my circle marketing to around 50 addresses.
Once we have our “circle”, we need to get prepared to “Circle Market”.
How Do We Prepare to Circle Market?
To answer this question, we need to go back to the same ol’ question regarding lead generation activities… Time vs Money! (“Click here” if you somehow missed that post) There are some things you need to do regardless of whether you have more time than money, so let’s start there.
Open a map program (or even use an Atlas) and find the address of your subject property. Zoom in a bit and try to define some land markers that will help you stay in the same neighborhood. Usually it’s main roads or a body of water that help us determine the neighborhood. Another good way to determine the neighborhood is to drive through and see when it “feels” like the neighborhood has changed.
Once you have decided the boundaries of the neighborhood, write down a list of the streets you are interested in Circle Marketing to. At this point, you can take the “more money” path, or the “more time” path. Both are described below.
If You Have More Time Than Money…
Take that list to the city hall or wherever your tax accessor can be found and ask them for some help on finding a list of addresses and owners of these streets. There is usually a computer there to help you… In fact, these days, you may not even need to go downtown. A lot of MLS’ have the tax accessor software attached to it and many cities and towns have this information available online!
However you get it, just get it. When you have a list of 50 or so addresses you want to Circle Market to then your list is created. Your list may be on paper or in a spreadsheet. It’s really up to you, but I would recommend a spreadsheet, since this will quickly automate things. The next decision is to make a plan for what Circle Marketing activities you are going to do. Here is an example of what I did when I got a new listing:
- Enter the addresses and names into my CRM using a new Group called “TEMP – 123 Smith St Circle Market (where “123 Smith St is the address of your subject property)
- Door knock on each of those doors and hand deliver a “just listed” flyer or postcard. (Yes, there is a script for you to follow, just “click here”) Always ask if they, or if someone they know is thinking of moving.
- Set up an open house and direct mail a postcard for the open house. I can do this manually or I can use a mail house, just make sure the mail house has a first class mail option or it’s never going to get there in time.
- Knock on doors a couple of hours before the open house and invite the neighbors. Always ask if they, or if someone they know is thinking about moving.
- After I sell the house, call (if you have phone numbers) or knock again and give them a “Just Sold” flyer.
- Delete the List – I know this sounds hard, but remember, this is NOT a farm. Once you move on to your next listing, this Circle Market ends. Don’t clutter up your database with all of this stuff!
If You Have More Money Than Time…
You’re going to want to leverage your money for your lack of time. It will be easier and faster, obviously, but it will also obviously cost more money. You still need to do your research…. Determine the borders of your Circle Market and make a list of the streets you want to use. Then you can go to a website like www.expresscopy.com or www.quantumdigital.com (I am not affiliated with either of these companies, but I have used them both in the past and was pretty pleased with both of them) There are a lot of other companies out there as well, so do your homework, check reviews and check prices.
These websites will allow you to simply type in the subject address, tell it how many postcards around that address you want to send and select what style of postcard you want to send. Of course, you should review the list and streets the website chose for you and make sure they are all on your list of streets from your research. Any good website will allow you to edit and alter the suggested mailing list it provides when you type in the subject address and amount of postcards you want to mail.
Then comes the painful part… Put in your credit card and pay 🙂 At that point, everything will happen for you. You can even name the list you purchased so that when you want to go back there and send another postcard, it will send to the exact same houses and all you need to do is switch it from a “Just Listed” postcard to a “Just Sold” postcard. It is very efficient and easy to do it this way.
Your plan should be similar to the plan I laid out above. I would let the mail house take care of the “Just Listed” and “Just Sold” portion but I would still hand deliver the “open house” postcards. Getting in some prospecting is important and if you’re not willing to do the prospecting then it’s probably not going to work. I mean, you can try it if you’d like. It is a numbers game after all, and eventually you will get some hits. However, I really believe in prospecting along with marketing for effective use of your money.
How Do I Find Phone Numbers?
If you don’t like to door knock, you may prefer to call people instead. Of course, the challenge is getting the phone numbers. There are a couple of ways to do this, but both will cost you. If you have more money than time, you may find it necessary to door knock until you’re bringing in more money. Please be careful if you’re door knocking. Go out during the day, preferably on weekends when there are a lot of people out and about. It’s ideal to bring someone else with you. Stay alert, make sure someone knows where you are, and when you are starting and finishing. Stay in touch with that person, Look into safety apps. These apps allow you to push one button on your phone and your call for help and location will go right to authorities. I am not going to recommend an app since I have never used any myself, but a lot of MLS’ now have one available to their real estate agents, so start there and then check with your broker or others in your office for recommendations.
If you are willing to pay for phone numbers, here are a couple of ways you can get them. First, a LOT of the companies that are selling you the mailing list (quantumdigital.com, for example) will offer phone numbers for an additional cost. You can also use something like Cole Directory, which is a reverse telephone search program. This is available for a monthly subscription fee. There are probably hundreds of sites selling phone and mailing lists. Choose wisely and consider the cost, accuracy, being able to choose by map (or at least by streets) and if it has been matched up to the “Do Not Call” List. Make no mistake about it, this is cold calling and there are laws in place to prevent you from calling people on the “Do Not Call List”.
In conclusion, please remember the following to make Circle Marketing an effective and extremely profitable type of lead generating.
- Plan to boost the post card (or flyer) marketing with prospecting! Door knocking or calling is a must!
- The leads you will capture are “hand waver” leads. These leads need to be cultivated, so remember that just capturing the lead is not enough. You need a good lead conversion system as well (“Click here” to learn one)
- Consider your Time vs Money (“Click here to read the article on Time vs Money) and follow the appropriate plan for which one you have more of.
- Remember… Circle Marketing is NOT Farming! This is a temporary marketing opportunity. Don’t turn all of your Circle Markets into Farms or you’ll run out of time and money fast.
- Circle Marketing is uncomfortable and uncomfortable is a GOOD THING. It is physical/mental evidence of growth.
