by Jacques Werth
John Bergen is a Realtor; a good, successful Realtor who works very hard. He meets far more prospects than the average real estate agent does. About 40 percent of his prospects become his clients and he earns four times as much as the average agent.
Paula Stone is also a Realtor; a good, successful Realtor who doesn’t work as hard as John. She meets with fewer prospects than John, but still more than the average real estate agent. Nearly 90 percent of her prospects become her clients and she earns twice as much as John.
The difference is in the type of prospect they look for. John looks for and meets with any type of prospect. Paula looks for only one type of prospect, the type that is ready to buy.
When asked, “What type of prospect do you want?” most Realtors say, “Just put me in front of any prospect and I will make the sale.” In reality, most people who go into the real estate profession fail to make a decent living, and that’s because they don’t close enough business. The ones that succeed do so either by working very hard, or by being very selective about what type of prospect they look for.
Three Types of Prospects
There are three types of prospects. For each type, there is one sales process that is the most effective.
|Type of Prospect||Most Effective Sales Process|
|1.||People who apparently need your type of products, services and/or solutions, but don’t know about those needs.||Consultative Selling|
|2.||People who know they have needs for, and are interested in, your type of products, services and/or solutions.||Solution Selling|
|3.||People who are ready, willing and able to buy your type of products, services and/or solutions.||High Probability Selling|
Matching the three types of prospects with their appropriate sales processes produces the highest closing rates for those prospects. However, most Realtors utilize just one type of sales process and use it on every type of prospect they encounter.
A Winning Strategy
1. Determine which type of prospect you want.
2. Master the sales process that is most effective for closing that type of prospect.
3. Utilize lead generation programs designed to get appointments with that type of prospect.
John Bergen, who has mastered Consultative Selling, has a complicated and time-consuming lead generation program that is designed to get him in front of all three types of prospects.
Paula Stone, who has mastered High Probability Selling, has a simple lead generation program that is designed to get her in front of Type 3 prospects only. People like John may say she is just a “cherry picker” or an “order taker,” but that doesn’t bother her. If it would not bother you either, look for more information about High Probability Selling.
4 thoughts on “Realtors: What Type of Prospect Do You Want?”
Unfortunetely Most sales organizations are set up with searching for type 1 prosepects. There is an inside sales force that prospects and finds any person that will listen or take more information on the product. These leads are passed on to the sales staff and management gets on the sales staff for not closing enough of these “leads”.
In the end the people that actually buy are the ones that decided they were going to buy it before the demo or meeting with the salesperson. They were either going to buy your product or the competitors product.
Sales organizations who claim to qualify prospects tend to go for Type 2 prospects. This would fall under solutions selling.
A question I have is can you meet with a Type 2 prospect and can they eventually become a Type 3 High Probability prospect?
In many organizations marketing and sales management push the sales staff to meet with Type 2 Prospects for their own forecasting etc..
Yes, you can meet with a Type 2 prospect, and yes they can eventually become a Type 3 prospect. Each can happen, but they are not necessarily related. The problem with spending your time with a Type 2 prospect is that you are not spending your time with a Type 3 prospect. Someone who truly is practicing High Probability Prospecting will find the Type 3 before you do, and will get the sale.
Salespeople who pursue Type 2 prospects have an inflated opinion of the value that these prospects place on the premature attention they received. They believe that they should have an advantage for being there first. However, it doesn’t work that way. Instead, the salesperson who calls at the right time, when the prospect is ready to buy, has a huge advantage over the one who calls too early, before they are ready to buy.
I’ve enjoyed the HPS system so far. The way conversation is initiated by speaking plainly, without persuasion, is what I consider a “magic key”. It is surprising the effusiveness that the prospect displays as a result.
That’s the first step. I’m still fumbling with questions they might have, trying to be non-persuasive, staying focused, detaching, etc.
Part of this is just being new.
Some of it is also because many, many of our prospects are price oriented. The first question they ask is “sure, how much?” I give them a price point and begin disqualifying from there.
We are designed to be price competitive, although we also have the best product on the market. Nevertheless, we never sell the benefits of our product as much as we do price. We view price as a major benefit, I’d say. Much of our marketing literature (95%) is about price, sales, savings, etc.
This approach can seem to have 0 effect sometimes. Literally. People who call would have seemingly called anyway, but they just get the sale price this time.
Granted, overall studies show that sales do produce better months for us.
I guess my overall question would be, given that we sell more during specials and sales, would you recommend we look for prospects that are ready to buy based on price benefits? Or should we look to emphasize the other benefits like quality and quality of service?
It would be easy enough to have an offer that listed our sale that month, for example, but that combines HPS with persuasion more than feels natural. BTW, we are not selling big machines or insurance policies, just widgets, ya know?
If you can beat the competition based upon price, and still make a profit, then it probably is a good idea to look for prospects that care mostly about price. However, the best overall strategy is to figure out what your strengths really are, compared to your competition, and then look for prospects who want these. This takes a lot more work than just focusing on price, but can be much more profitable.
Whenever you advertise a sale, you attract people who care mostly about price, and you will conclude that the price is what matters the most. If you advertise on some feature that differentiates you from your competitors, then you will hear from people who care about that.
Thank you for your comment.