Last week, I was in a Ninja Mastery class for Brokers and Managers when our session leader, Peter Parnegg, said something that got my attention. What he said was that by looking at the genealogy of a transaction in our business planning, we might find more business. The more and more I thought about it, the more powerful the idea became. Peter’s supposition on the subject was that it might be a way to pick up a transaction or two in a shifting market. The longer I think about it, the more I think that it really could transform your business in a couple of ways.
Let’s start with a study on genealogy. With the expansion of public records on the internet, and then the Mormon Church bringing us ancestry.com, studying your family tree has gone from something people did with family albums to a mainstream business. As DNA kits have become available, the connections from all over the world that are made are really incredible. In a matter of hours, someone could fairly easily, and without a ton of knowledge beforehand, construct a significant family tree. With relative ease, you can know exactly where you came from.
What if you could do something similar with your real estate business? What if, with relative ease, you could trace back the lineage of sales transactions to their origin and find out exactly where your business comes from, what activities drive the most business your way, and how to replicate that in the future to ensure recurring business? I think that there is a pretty simple way to do it.
If you have been around me for any significant amount of time or heard me talk or teach about referrals, then you know one of my pet peeves is when agents boast about their business being 100% referral, or close to it. My standard response to that is, “Well, then you aren’t trying hard enough. Go talk to strangers.” The truth of the matter is, however, that for a significant number of agents, the majority of their business is referral driven. Or is it? That is what we will try to discover by tracing the lineage of their business.
Let’s talk about why we would want to do this before we talk about how. First, we ought to be tracking the business anyway. Not to go all Dave Ramsey on folks here, but if more agents adopted an “every dollar has a name” mentality, more agents would be more profitable. By tracking, we know where leads and revenue come from and we can apportion resources accordingly. Secondly, if we were to trace the lineage of our most recent transaction all the way to the start, what would it tell us about our activity? More on that in a minute. Lastly, by knowing the “origin point” or “patient zero” we really get a chance to identify our most valuable referrers, ones that maybe we need to reconnect to, and even “rising stars” in our referral world. That will focus our time and energy on people who offer a higher return on investment.
The great thing is that this is an easy exercise. To start, pick a transaction. As we enter into business planning season in the industry, this is a great way to look at your business from this year. Once you have chosen a transaction, simply ask yourself, “Where did this business come from?” Let’s say it came from a paid lead. There you have it. That is the end of the exercise for that transaction. Account for the lead source and move to the next one. Let’s say, however, that the lead source was a referral. Great who was it?
This is important. This is where most people stop. Don’t be like most people.
Now that you know who the referrer was, ask yourself where that person came from. If they were referred, by whom? And then ask who that person came from. You getting the point? So, let’s say that this particular transaction came from the Smiths, who came from the Joneses, who came from the Martinezes, who came from an open house you did five years ago. What does this tracing tell us?
First it tells us the origin point was an open house. Are you struggling in your business right now? Maybe you need to do more open houses. This one open house you did five years ago led to at least three other transactions! Second, it tells you that you have three people that are, or were, actively referring you to others. Are you nurturing those relationships? This is as good a time as any to reconnect and rebuild those relationships.
That’s one transaction. Let’s say you did 24 transactions in the last year, two a month. What if, by doing a quick timeline rewind, you could discover fundamental business practices that pay off and relationship gold that is there for you to mine? Would that be worth a few hours of your time? Would it be worth more than some business planning workbook you are going to do once and then never touch again?
A few notes before we wrap this up. First, if you do the exercise and then do nothing with it at all, what is the point? Take what you learn and take action. Schedule activity. Make calls. Do the work and it will pay you back. Secondly, once you have done each transaction individually, put your timelines together and see if any one or two particular activities (open houses, networking, just sold postcards) created the points of origin. That tells you where to focus your new business development. Also, though, look at the names from referrals. Do any show up more than once or twice? Those are your brand advocates, and you better have a plan in place to nurture those relationships.
There you have it, building the family tree of your business. I can promise you one thing: doing this kind of genealogy is guaranteed to pay more than chasing down your dead relatives.