Did you ever take physics in high school or college?

I cringe when I hear the word.  But if you did take physics, you might have learned about an amazing concept called “Critical Mass.”

What is “Critical Mass” and what on earth does it have to do with real estate success?

“Critical Mass” occurs when an object or process in motion reaches such a momentum that it continues at that momentum…even increases that activity for long sustained periods of time – even forever!

And did you know that your real estate production can hit a point of “Critical Mass”?

It’s true.  In fact, after teaching more than 22,000 agents how to get breakthrough production and lasting profits in real estate…

I Have Never Seen a Real Estate Practice Achieve Long-
Term Success WITHOUT Reaching Critical Mass™…

Yes, it’s that important.  Let me explain further…

See…about 12 years ago…when I was working with small groups of agents, I coined the term “Critical Mass™” to explain the dynamic of growing such a strong “marketing momentum and personal market share” you actually start to generate 70%, 90%, even 100% of your clients from your created marketing momentum.

But more than that…I discovered a way to make your production continue to grow and grow almost automatically year-after-year no matter what happens with the economy.

Picture your real estate production like a small snowball in your hand.  If you take that snowball and start rolling it down a hill, it will start growing bigger.  And as it grows bigger it will start to take on its own momentum and start rolling itself.

And as it starts rolling faster, it also starts to get bigger…and bigger…and bigger.  And as it gets bigger, it starts to roll faster…and faster…and faster.

Do you see what’s happening here?

At some point your snowball reaches a point of “Critical Mass™” where its accumulated momentum will keep it rolling and rolling and rolling.

So what happens when your real estate practice starts reaching Critical Mass™?

Amazing things start to happen…

Your production will multiply, and continue to grow for as long as you practice real estate, because you’re creating your own momentum…your own personal market share – it’s a mathematical certainty as you’ll soon see…

You will never cold prospect again…never face the humiliation and frustration of cold marketing – nearly all of your clients will come to you the easy way: by referral, word of mouth, and repeat business…

You will work half as much and stress a fraction of the amount you do now…and in the process you’ll make multiples of your present income.

Why will all these good things happen?  Because..

You Will Spend Your Time Only On the Most Productive
Real Estate Activities:  Working With Clients,
Closing Deals and Getting Paid!

Imagine if you could wake up each morning, and, instead of dreading your day cold prospecting or wondering where your next client is coming from, you relish in a steady flow of clients who want to work with you and only you.

It’s not a pipedream.  It’s not a fantasy – agents are doing it today.

But there’s a small problem.

See, most agents never reach Critical Mass™.  They lurch from one bad effort to the next, because they never learn about the concept, or how to get there.  So they either quit the business, or give up and sadly assume real estate needs to be a constant struggle – jumping from one marketing fad to the next.

And many of those who actually reach Critical Mass™ get there by accident…or take 10 to 20 years to reach that point.

Well, I’m here to tell you:  You don’t have to be a victim of ignorance.  You don’t have to struggle and strain or take 20 years to finally “make it” in real estate.

You can “short-cut” your success by 90% or more if you simply build your own personal “Critical Mass™” momentum and market share.

Which brings me to our little formula for building Critical Mass™ in your practice…

It’s a simple math calculation for building any size real estate practice you desire…a calculation that will reveal to you the exact size of your “house list”…your personal market share required to reach Critical Mass™ in real estate.  It’s my…

Critical Mass Targeting System™

Follow along carefully, because this is the most important little calculation of your real estate career.  I want you to understand the dynamics here as well as the simple math.

Take out a piece of paper and follow these 3 easy steps…

STEP #1: Write down the number of real estate transactions you want to achieve to reach Critical Mass™ in your real estate practice.

Critical Mass™ is a different number for everyone.  For some agents, it may be 15 transactions a year.  For others it may be 40.  And for others it may be 400.

Another way to calculate the number of transactions you desire is to back into it. Simply take the “net income” you desire, and divide it by the average NET commission you make per transaction (that’s after all expenses: broker split, marketing costs, employee expenses, office rent, auto expense, etc.).

For example, if you want to make $200,000 and your average “net” commission (after expenses) is $5,000, then your Critical Mass™ number is 40 transaction sides ($200,000/$5,000 = 40).

As a side note (and food for thought): the higher the average price of homes you sell, the fewer you need to sell to meet your Critical Mass™ income level.  But you already knew that, right?

STEP #2: Write down how long the average person in your area owns their home, and multiply that number by #1 above (the # of transactions you need to reach Critical Mass™).

National home ownership average is about 5.5 years.  But to be conservative, let’s assume its 7 years in your area (you can use 6 or 8 or 10 for that matter).  Check with your local MLS or REALTOR^® Association if you’re not certain – or just assume for now.

For example, if the average homeownership period in your area is 7 years, multiply 7 times 40 transaction sides (from #1 above).  7 Years x 40 = 280.

THE RESULT: In our example, you will require 280 homeowners on your “house list” to generate 40 transactions EVERY year (your Critical Mass Target™) – Remember, this doesn’t include the referrals they could send you.

It’s just the number of direct transactions that will come from this group (and you can check your math: 280 people divided by 7 years = 40 deals per year will come from this group).

But HOLD ON!

Those 280 are your goal ONLY if you get ALL of their transactions.  Let’s be reasonable: You won’t get all those transactions.

Regardless of your efforts, some will go FSBO.  Some will go to “Uncle Charlie.”  And some will go to another agent.

That’s why we now need to adjust for your “Personal Market Share™” with that group to get your true Critical Mass Target™.

STEP #3: Divide your “house list” number (from #2 above) by the estimated “Personal Market Share™” you have with those folks – to get the “actual” number of people required on your house list.

What do I mean by “personal market share”?

Market share is the propensity of these people to think of YOU FIRST (and final) for real estate services before any other agent

How do you figure your personal market share %?

Over time (a year or so) you’ll understand your market share because you’ll know how many transactions came from your house list or target farm.

And remember, marketing to that group over time will have a cumulative effect, and actually increase your market share with them.

But for now, I know our agents using Service For Life!® harvest between 30% and 80% personal market share with their “house list.”  So let’s work an example…

Continuing with our previous example, let’s say you have a 30% market share with your folks.  That means you should divide your 280 people by your 30% market share:  280/.30 = 933 people.

So if you have only a 30% market share with your house list or target farm, you’ll actually need to have 933 people on your “list,” not 280.

But what if…because of your relationship contact systems – like our Service For Life!^® members – you actually harvest 50% of those people?

280/.50 = 560 people.  You now need only 560 people to harvest your 40 transactions every year (not including referrals they could send you).  You just cut your list size almost in half!

And what if, because of your relationship contact systems, you actually harvest 80% of those people?

280/.80= 350 people.  You now need only 350 people to harvest your 40 transactions every year (not including referrals they could send you).  You just cut your list size by one-third again!

Do you see the “dynamic” that’s happening here?

The SIZE of your list required to reach Critical Mass™ depends on the QUALITY of your list.

And the quality of your list is controlled by YOU.

The higher the quality of your list (i.e. the closer the relationship), the fewer people you need to reach Critical Mass™.  The fewer people required means lower marketing costs and higher profits for you.

By the way, I’ve seen agents create house lists larger than 700 in their very first year – and they closed an extra 20 to 50 transactions just in the process of building that list.

And remember, the “Critical Mass Target™ number does NOT include the referrals you could harvest from these folks – it’s just the direct transactions that will come from that group.

Many of our Service For Life!® agents actually add up to 40% more business from the referrals they generate from their house list.

Question: WHO will be the agent representing these people when it’s time to buy or sell?

Answer: The agent who’s created the closest relationship with them.

• The agent who has nurtured the relationship.
• The agent they can trust.
• The agent who’s demonstrated their competence over the years.
• The agent who brings regular, welcomed value.
• The agent who has differentiated themselves from every other agent out there!

Don’t fall prey to the thought that you need to carpet the area with your one-time contact – this is about more; this is about QUALITY RELATIONSHIP.

The only thing that’s missing for you is…

How Do You Get Your Personal Market Share™ with
Your House List as HIGH as it can Possibly Get?

How Do You Make Yourself the ONE Agent Your Market
Thinks Of Before Any Other Agent Comes To Mind?

The Answer: You need a consistent contact system that involves them.  Gets read and shared.  Automatically builds a deep relationship worthy of referrals, word of mouth and repeat business.

A tool that brings your prospects and clients value so they’re subconsciously forced to reciprocate and do business with you.  A tool that bonds them to you like family.

Doesn’t it make sense?  It’s intuitive but most agents nod their heads and do nothing to increase the quality of their house list each month.

Let’s have some fun.

Today I want you to dream a little.  Whether you’re a new agent or veteran top producer…I want you to calculate your Critical Mass Target™ for your own practice.

I want you to see how greater success with less stress and strain can be a mathematical certainty – and how your production can continue to grow automatically, year-after-year…regardless of the economy, competition or interest rates…if you just follow a simple strategy.   Here’s the easy exercise:

Step #1: Write down the number of transactions you need each year to be at “Critical Mass™” in your business:  __________. (Example = 50)

Step #2: Write down the average length of home ownership in your area.  Check with your local MLS, or if you already have an estimate, enter it here (nationally is about 5.5 years):  __________. (Example = 7 years)

Calculation #1: Now, MULTIPLY Step #1 by Step #2.  (Example: 50 x 7 = 350).  This will give you the number of people needed on your house list (or farm) to generate your “Critical Mass™” number of transactions (IF you get ALL of them), not including referrals they could send you.

But remember, you won’t get all of those transactions – so we need to make a small adjustment for your “Personal Market Share™.”

Step#3: Estimate your “Personal Market Share %” you can expect when marketing to this group:  _______ %.  (Example: 30%)  If it’s a cold list (like a new farm) it will be quite low.  If it’s a well-nurtured house list of past clients, friends, family, acquaintances – it’s going to be much higher – even as high as 80% or more.

Calculation #2: Simply divide your results from Calculation #1 above by Step #3.  (Example: 350 / .30 = 1,167)  This will give you the number of people you’ll need to build on your house list to reach your Critical Mass Target™ at a 30% Market Share.

Now, let’s do something called “Sensitivity Analysis.”

Let’s assume you had a great “Relationship-building” system (like Service For Life!^®) working in your practice…

What if your Estimated Market Share % went to 40%?  Divide your results from calculation #1 above by .40.  What did you get?

What if your Estimated Market Share % went to 60%?  Divide your results from calculation #1 above by .60.  What did you get?

Did you notice that, the better your Market Share %, the LOWER your Critical Mass Target™ becomes?

A lower Critical Mass Target™ means you spend less time and money marketing your services.  You work with higher quality clients – friends.  And what you don’t know is that these people REFER others just like THEM!

Want to know a secret?

Most agents never think about Critical Mass™ or “Personal Market Share™.”

Rather than create a “Strategic Approach” to building their business, they force themselves to constantly prospect…or just hope and pray that clients will somehow, some way find them.

Not you.  Not any longer.  We’ve just completed an important step in targeting your success – and believe it or not, most agents never even get this far.

We’re starting to fill in the blanks in making your astounding success a “100% Certainty.”

Stay tuned for more articles about how to build the size and quality of your house list.

[Ed. Note: Craig Forte has built 4 multi-million dollar companies in his 35-year career, including a successful real estate development and brokerage company. He is author/publisher of 11 books and courses in real estate, and has taught more than 22,000 agents how to create breakthrough sales and profits. His most recent course, "The Ultimate Real Estate Success Secret™" has been acclaimed as one of the most reliable, step-by-step ways to grow your production 33% to over 400% each year.  As an Agent Inner Circle® Member you can receive his course and 2 other powerful resources absolutely FREE just click here.]

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Have you ever spent hundreds of dollars and countless hours on an ad or mailing program, only to stare at your silent phone?

If so, you’re not alone. Most agents spend an enormous amount of time learning about “real estate”, but very little learning about the “elements” that turn your advertising (or any marketing or prospecting efforts) from a “sunk cost” to a true “money-maker”.

The truth about real estate success is this: Even the most competent and knowledgeable agent will go broke without a steady, consistent stream of qualified, motivated buyers and sellers.

So while knowledge about real estate is essential to being a competent agent, it’s not going to write your ticket to success. You also need to develop prospecting and marketing skills designed to create an on-going flow of leads and clients.

Money-making marketing isn’t difficult if you know a few basics. In fact, all successful marketing has three essential components. I call them…

The Three “M’s” of Marketing Success

The next time you set-out to create a successful ad, post card, or even if you decide to cold prospect (or the next time you’re perplexed as to why your wonderful promotion didn’t work), think about these three ingredients…

#1: Select the Right MARKET

It sounds rather obvious, but most agents fail with their marketing right here – they fail to target the “hungry crowd“… people who are “right now” facing a problem about real estate, and are motivated and interested in what you may be offering.

What do I mean by “market”?

A “market” is a group of people who share a common demographic (statistical description, such as location, occupation, income, etc.) or psychographic (belief wiring). Your goal is to select a market that has an immediate, pressing desire for your services.

Want an example?

About 6 months ago an agent called me because she had been farming a “high-end” subdivision for over 9 months, and her efforts produced zero calls or listings. When I asked her to hop on her trusty MLS system and take a look at the market, she noticed that only 2 homes had sold in the entire area over the past year!

She had been fishing in an empty pond.

I then told her to select 5 decent markets in her area based on casual knowledge, and using here MLS system analyze each market for # of homes sold, average sales time, # of dominant agents in the market and a few other statistics.

By comparing 5 markets based on these criteria, all of a sudden one of the areas stuck out as a higher-potential market than the others – an area with lots of activity, high turnover, short sales times, fewer dominant agents, etc. Within 30 days working these markets she had her first listing, and is now making a small fortune from her farming efforts.

So how do you find hot markets? How do you find the well-stocked ponds that will produce consistent business for you, year-in and year-out?

The secret is to pay attention to where the dominant activity exists for the type of homes you specialize in selling.

If you’re a luxury market specialist, do your homework and locate luxury areas with better activity than others. If resort properties or horse properties are your specialty, then analyze the best resort or horse property subdivisions to target.

If you’re looking for buyers, examine your market for segments where the highest volume of buyers exist (get cozy with your local board and you can find lots of market data). Between your MLS and a trusty Excel spreadsheet, the answers are right at your fingertips.

But you want to know the one “market” that will out-perform anything else as much as 16 to 1? It’s your “Power List”…your list of past clients, friends, family and acquaintances.

If you’re interested in building a booming “Power List” business click here to learn more.

To sum up this first “M”… go where the pond is stocked from the beginning, and your odds of success will be much greater when you cast your line.

Let’s move on to the second “M”…

#2: Select the Right MEDIUM

Once you’ve found your market(s), the next question you should ask yourself is: “Where does my target market get information that’s important to them?”

The secret is to tap into the lines of communication and information that your market already finds credible and helpful.

Most agents are seduced into finding mediums (magazines, newspapers, etc.) based on the highest circulation, but that’s a BIG mistake because you’re going to pay for exposure to people who have no interest in your services – it’s called “waste circulation” and it’s very costly.

Find a medium that reaches your targeted prospect and only your targeted prospect.

You might choose to use direct mail after performing an analysis like the example above. You might locate a homeowner newsletter to contribute a helpful article about buying or selling in the area. Or you might find a bedroom newspaper that specifically targets the area you farm.

Either way, the “secret” to success is in finding well-targeted, small ways to reach your prospect and only your prospect. That’s because every dollar (and minute) counts when you’re prospecting for leads and clients.

The more you target by selecting the right medium for your promotions, the more money you make.

And the final “M” is this…

#3: Create the Right MESSAGE

All of your advertising, mailings or any other marketing should have one and only one objective: Motivate qualified buyer and seller prospects to CALL YOU or hire your services!

If they don’t call or hire you, you’ve wasted your money.

But most agents believe that, if they put up their photo with a “call me for more information” they’ve done the job. Wrong!

You will find volumes of books and courses about direct response marketing and ways to motivate prospects to call you, but here’s a quick 4-point checklist that will almost instantly improve the success of all your marketing.

• Capture Attention with a Benefit-Rich Headline and Lead. Your headline is your “ad” for your ad or letter or even your listing presentation – no it’s not your name or your big company logo. It’s the specific call-out message that causes your reader or listener to stop and take notice, just like a headline in a newspaper article works. Your “lead” is what you say in the first 5 seconds that captures the attention of your reader and motivates them to read on.
• Stimulate Interest by Harmonizing with Your Prospect. How do you get people interested in you? By talking about the problems they face and the desires they seek. It’s not about you; it’s about them! When you connect with your prospect and empathize with their situation (their immediate fears and desires), you instantly capture their interest and open their minds to be willing to listen to your solutions.
• Create Desire by Matching Your Services Perfectly to Their Fears and Desires. When you demonstrate how your services solve problems or deliver benefits for your prospects and clients better than any other option – in a way that’s risk-free for them – you automatically make yourself a stand-out choice for their business. The art of persuasion is simply matching your solution perfectly to the problems and desires your prospect faces.
• Stimulate Action with an Irresistible Offer and Call to Action. Remember this: No one will call you without a self-serving, almost irresistible reason for calling. So you need to give prospects reasons to call. For lead generation, offer special reports, preferred lists of homes and other “magnets” that will motivate people to seek you out. When closing a listing presentation, list out all the “things” you will DO for them, and make an offer that will have them saying, “we’d have to be fools to pass this up!” If you don’t include an offer, combined with an urgent call to action, chances are your prospects are going to procrastinate. And procrastination in this business means an empty checkbook!

One final note… these three “M’s” of marketing success are not magic bullet solutions.

It’s up to you to take action and consistently apply them in your marketing. Once you really understand each of these ingredients and USE them, you’ll have a reliable way of creating promotions that work instead of just a fizzle of response.

If you want your promotions to bring you a steady stream of commissions and clients, go and review every promotion you have right now against each of these ingredients of successful marketing.

You’ll be glad you did!

Now that the new year is upon us, I’m getting calls and emails from agents who want a better, easier way to grow their businesses.

Below, in no particular order, are FIVE strategies and in-the-trenches “marketing wisdom” that will help you generate more clients, and build a long-term viable business. Many of these suggestions are further detailed in the 3-Steps Marketing System.

1. Prioritize Your Marketing Time, Money and Effort According To the QUALITY Of The Prospect/Market

“Quality” is defined as how well the prospect already knows you and is most predisposed to use you over any other agent. Remember:  never chase cold prospects at the expense of higher potential prospects. Here’s how I believe you should prioritize your marketing:

• Build a “house list” and market to them on a monthly basis (this is your “market share”, where 70% or more of your business should come from – more on this later).
• Market off “Transactional Leads” (from your listings for buyers) and other listings (once you have them).
• Work hot leads – follow-up is essential. At the very least, you know they’re in the market to buy/sell, and most agents hopelessly ignore follow-up.
• Do your research homework to select market niches that have the most promise, and work them (i.e. fish in a stocked pond) – this includes geographic markets (farms), specialty markets (resort, golf, vacation, etc.).
• Work FSBOs and Expireds – but notice the low quality of this group. We both know the reason. Here’s a revealing fact: The National Association of REALTORS^® produces an annual research report called Profile of Buyers and Sellers. It’s filled with lots of facts and figures, but the most startling fact they’ve discovered is that approximately 74% of all real estate transactions occur because the client either 1) knew the agent already, or 2) was referred to the agent from a trusted source.This means that 3/4 of all transactions happen because of a relationship –  yet only 4% of all agents have any “systems” to harvest deep relationships and build market share. So about 4% get the lion’s share of business and 96% wrestle each other over the scraps. THIS fact alone is why I told you (above) to create a “house list” of friends, family, past clients, acquaintances, etc., and market to them first and foremost. It’s also why I created Service For Life!^® at www.ServiceForLife.com as a ready-to-use tool to capture that business. I’ll cover this in more detail later.

2. When Starting Out, Spend 80% of Your Time Prospecting

Whether it’s cold prospecting or establishing marketing systems, focus your resources on getting business. Don’t allow distractions (self imposed or otherwise) to interfere with this task. At the same time, don’t neglect establishing other marketing systems so you can quickly stop manual prospecting.

3. Get a Hotline and Use it

Your hotline will become the foundation of your marketing systems, and will become the “mechanism” that generates leads and clients automatically from ALL your other marketing, so you can do your job: working clients, closing deals and cashing commission checks. You’ll use it for classifieds, display ads, sign tags, info tube flyers, listing presentations, and lots more. Go to www.SixFigureHotlines.com and subscribe to the free course there and examine Proquest’s hotline service – it’s first-rate and they give you extra marketing tools to use in your practice.

4. Product-Ize Your Real Estate Services

This industry is a mass-commodity of agents all screaming the same thing to prospects. You need to be seen as different. So create unique products out of your services.

• For example: “Your Maximum Value Home Marketing Plan,” or “Preferred Buyer Program”.
• Another example: Rather than give CMAs, agents will offer a “Maximum Home Value Audit” to examine and determine ways to maximize the value of a home and sell in least time.

The secret is to weave the greatest benefit for the client into the name. Then, make a simple list of everything you do for the client as part of your program – even if other agents do it, it’s likely they don’t promote it, so you have the advantage.

5. Make Yourself A Self-Proclaimed “Specialist” in Your Market

Farming a resort area? Make yourself a “resort property specialist” and title your product specifically to it: “Ventana Canyon Golf Property Specialist” and “Ventana Canyon Maximum Value Golf Property Program.” Use your creativity and match your services specifically to the market.

Your success in 2010 and beyond require intense focus on your highest priority activities. This list will get you started down the right path of where to make changes to grow your real estate practice this year, and for the future.

Agent Molly Schubert has generated lots of new clients from a simple yet powerful marketing technique.

She sends a monthly newsletter and includes a response mechanism with a unique phrase…”There’s So Much More To Serving You!“

This simple phrase (and description) shows why she is unique and highlights how she goes above and beyond for her clients, and you can see an example below. When people read this section of her newsletter, they call her to get the names and numbers of all types of service providers.

Molly uses this technique in her newsletter, but you could use this idea in a postcard, on your website, in a letter, or any medium you use to regularly communicate with your clients, pipeline, SOI or even farm.

This strategy bonds clients and prospects to Molly and she receives a lot of extra business. When I asked Molly about this idea she said she gets calls all the time from her sphere asking for a plumber, painter, etc. all because of this little phrase she uses. Here are just a few examples:

• A call in for someone to install a front door… resulted in a referral to help the caller’s daughter buy a home;
• A call in for names of painters… resulted in a referral to sell a home last August for approximately $7,450 commission;
• A call in for a chimney repairman… resulted in a referral to a buyer she is currently helping, and they also already referred their friends to her.

Here’s Molly’s description in her own words…

“If you have a list of ‘trusted’ service people that you use, now and then include something such as the following in your newsletter or mailings:

We do not just give out the list of names and phone numbers. We want people to call us. And they do! All the time. We even get people in our farm calling to see if we know how to get rid of pests in a home (not kids!), or bees.

You want people to be calling you, because if you help them with these things, they’ll remember you.”