Building goodwill will help you get more listings. Online real estate training Episode 05 - Strategic alliances - 4X Formula
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4XF 5: Strategic Alliances

Hi, I’m Kelly Johnson, founder of the 4X formula and the big question is this: How are real estate agents like us able to create a constant stream of commissions and a constant stream of leads while enjoying life without wasting big budgets on branding, without working crazy hours, without worrying where the next deal’s coming from in today’s real estate market. This podcast is here to reveal the answers.

Hey, how you doing everybody? Kelly Johnson here again from the 4X formula. Today in this podcast I’ve decided we’re going to talk about strategic alliances. There’s lots of different ways to get business and develop business over your time as a realtor but during that time, like during your day to day business, intentionally be seeking out, what I call strategic alliances. This is a huge game changer in real estate. And this is something like, there’s a lot of people, you may be thinking this and actually it might even have been your motivation to get into real estate. You might’ve seen this guy or this gal operating as a realtor and thought, “Oh my goodness, if those people can make money in real estate, I’m going to make a killing because they are boneheads and I can’t believe that they make a lot of money in real estate and they’re just horrible or they’re, they just have brutal personalities or they dress horribly or whatever it is.” I don’t know, right. Whatever you’re thinking in your mind as criticisms against what you believe to be the perfect realtor or the ultimate realtor, or however you’ve got that manufactured in your brain. But when you look at these people, you kind of go, “My goodness!”

But what’s great about that is those type of people actually give us all hope, don’t we? But you don’t what? More often than not about I bet you 90% of the time, those people, even though you just can’t believe it, that they’re doing good business, they were good at creating strategic alliances. They’ve learned and whether it’s instinctively or not, how to kind of mine that kind of business.

Do you understand mining? So if they’re looking for gold in an area and they’re digging and digging and chopping away and chopping away, and I don’t know if I’m using the proper mining terms or whatever, but they’re searching for the vein, right? They’ll find a little bit of gold or whatever the valuable thing they’re looking for is, and it’s usually all bunched together. And then when they take that, they’ll tap into what they call a vein and that vein we’ll take them into, and all of a sudden they’ll have a ton of whole pile of gold. Investors, the mining companies rely on this stuff because then they go back and they get investors to kind of help pay for getting all the machinery in and paying for people to mine this goal. But they won’t do it unless they find a vein. And then they know that’s happening. So that’s kind of one illustration, to kind of help you understand that.

The other part of it is usually a strategic alliance. Okay. First of all… Sorry I was rambling a little bit there. I was trying to figure out actually what was going on in my brain: “Was that analogy just horrible or was that analogy actually getting something across to people?” So anyway, whatever.

But really a strategic alliance is in your circle of clients and we talk about this in the 4X formula when we’re getting into a database management and retention and stuff like that. And we get into that. What we’re talking about is your different circles of clients. And it’s really, really important to intentionally understand your client base. Because there’s a lot of people that spend a ton of money, a ton of money, just like totally advertising to strangers and they’re trying to get all these strangers to phone them, to do business with them.

And when you’re starting in a relationship with a stranger, it is not fun. You’re starting from a position that is way down here and you’ve got to work your way, way up and what are you going to do while you’re doing that? You’ve got to sell. You’ve got to be a salesman, right? I even used to say this in my days in business. I spent tons of money. I used to brag to people about how much money I spend on advertising. I used to be proud of that. I was an absolute idiot.

I was talking to another guy who, same thing, he kind of had this really big business it seemed anyway and bus benches everywhere and big signs and he was operating about a half hour away from me in another city and he said the same thing. He actually, he was really intentional in growing his business and he hired a guy to kind of analyze this business and the guy came in and looked at all his numbers, went through all his deals, like basically did a full analysis of his business. And he said to him, “Each customer based on what you’re doing right now, each customer, client, whatever, that’s coming in your door right now is costing you about $2,800. Now that’s ridiculous. $2,800 and at the time, this was probably about 15-16 years ago, the average end or deal was about 4,500 bucks. So over half of the commission that this person was earning per deal was costing him about $2,800. So he’s wondering why he’s making all this money and he’s got this team and he’s got this big machine going and he’s doing this great job of branding himself and everybody knows who he is and all this kind of stuff but he was making no money!

And that’s the key. That’s the whole thing about the 4X formula. That’s what we’re teaching is you don’t need to do that. You don’t have to do that. You just need to be smart where you spend your time and the 80/20 rule applies in everything. We talk about that in the course as well. So I won’t get into that right now.

So it’s strategic alliances! So A+ people, A+ clients are clients that would sing your praises. You’ve done great business with them. You just seem to Mesh. Everything just seemed to go awesome. The closing went awesome. They enjoyed, you know, the notaries you referred to them, the home inspectors you referred to them, the mortgage brokers you referred to them and just everything just seemed to go well, right? And you know, you got more money than they thought they could get for the house. And then when you help them buy, you negotiated a great deal for them. Just everything just went awesome. And that does happen sometimes where everything’s just perfect and it’s not always perfect, but every once in a while it does.

Then all of a sudden you can start to understand if these are the type of people that are what I call sometimes sneezers, right? They just infect other people with how great you are. So they’re just sneezing about, yeah, they’re just infecting other people you would say. “You wouldn’t believe you gotta use, you gotta work with these people. You’ve got to use their services and you’ve got to trust them. They’re just great people. And here’s what happened to me.” And they tell their story and everybody goes: “Oh my goodness, I would love to have an experience like that.” And so then all of a sudden now, these people call us and we’re in this awesome starting point in our relationship, our platform, we’re like 10 stages up already. I don’t have to earn anything. I don’t have to sell anything. I am now. All I’ve got to do is serve at the level that they believe I’m going to serve them. And I just got to be true to that. And then just do it.

There’s things that happen all the time and people understand that, but we’re starting off a way better level. So that’s A+ client. So these are people that are in your database, you’ve done business with in the past and it’s been a good experience and they tell lots of other people about that. Now that needs to be rewarded quickly. So if someone refers someone to you and you get this phone call: “So you know what? Bob and Sue just told me, I should give you a call and blah, blah, blah blah.” “Oh man, that’s awesome!” You have that conversation with them. You lock things down and make an appointment. You ask lots of questions to get ready for that appointment, all that kinda stuff. Soon as you get off that phone, you got to figure out how to reward these people. And it could be as simple as sending a note card to them with a Starbucks gift certificate or something in there that’s for 20 bucks and just says: “Hey, have some coffees on me or whatever. Thank you so much for referring, you know, Peter and Melinda over to me. Man, I really appreciate it. We had a conversation. It was great.” Just a nice little thing and just show appreciation immediately. It doesn’t have to be a bunch of money. It just needs to be a gesture, right?

So guess what? That’s your marketing budget. 20 bucks. You can do more if you want, but 20 bucks. Honestly, that’s enough. People go, “Oh man, that’s awesome! They thought to send that to me and we were, well, that’s awesome!” Well, you know what? I would refer them anyway, whether or not I got a $20 thing, right? That’s the way a referral should be. If you give too much money, all of a sudden they go, “Oh, okay, I’m going to get Kelly working for me. I’m gonna send them referrals and I want 500 bucks each time and now he’s working for me because I’m going to just blast all these names at him.” You know what I mean? If it’s a genuine referral from an A+ client, that is awesome! There’s nothing better than that!

Okay, so that’s one, but you got to nurture that relationship. So those are type of people that maybe you would take out for dinner once in a while or you would make a point of visiting at least, or you would drive by their neighborhood and maybe stop by and just: “Hey, just wanted to say hi! Hope things going well.” Or you give a phone call once in a while, drop a note card to him once in a while. Those are people that you really want to nurture that relationship and really appreciate that. And you know what? They may be in your circle of influence in other ways in your life and that’s awesome if that happens. Okay. So that’s number one.

The second way is, you know, if you get involved in different things like Chamber of Commerce in your area or business improvement associations, or I’m like downtown associations, sometimes they have separate associations. If you’re in some service, groups like rotary and stuff like that, however that is or you meet people through different business situations. That’s another way of creating a strategic alliances. And so having conversations with these people. And usually those conversations shouldn’t necessarily be about “I’m just this great realtor. I make lots of money, I’m really busy and I’m just amazing. And let me tell you why I’m so amazing.” Really shouldn’t be the gist of the conversation that you’re having with these people. It’s funny. Uh, people will always appreciate more how.. They actually think people are really intelligent when you leave a conversation, when you’ve spent that whole conversation asking them about themselves. And so you want to get to know what their business is all about. Everybody knows what realtors do come on, right?

So you’re sitting there talking to somebody, They’re a business owner of some sort of entrepreneur. You’re in the situation or whatever. And you just ask simple questions like, what is your ideal client? Right? And people are now sharing a business cards differently now through phones and stuff. But if someone hands you a business card, this is something you can write on notes on the back and then put that into a thing and go, you know what? I’m going to see if I can nurture this person in to be coming a strategic alliance. Now the first thing you do isn’t go: “Hey, can you figure out how to send business my way? I’m always looking for business.” There’s nothing wrong with saying that, but again, we teach this in our course that you’ve got to earn your right in relationship to get to a point of asking someone to do something for you that benefits you.

You have to think about how to benefit that person first. You got to build that goodwill. You’ve got to build that seed planting. Show that you have value first. We deal with a lot of the same type of people that most business people will actually deal with, believe it or not, cause we deal with all walks of life. We run into all different types of people depending on how we do our business and where our businesses. And so could we benefit other people by saying: “Oh, you’re looking for that?” Because all of a sudden, what do you become to those people? A fantastic resource, right? If someone says to me: “Hey, do you know a good doctor? I’m moving in” you know, people are moving into the area. “Do you know a good dentist? Do you know someone that could dig ditches? Do you know someone that could do drywall? Do you know somebody that could do this?” If you have an answer, just about every single time someone asks you that, you become the resource, you become the Google. You become the trusted avenue for answers, right?

If you could become that for people, that builds up value in their eyes. Not only that, it gives you lots of reasons to touch base with people. So having other business people kind of in your arsenal and remembering to figure out how to figure out how to help their businesses. So: “Hey, what is your ideal client, John? Like what is the perfect client, the ones you just love working with?” And let them tell you. And you listen for that and you learn about that and you go, “You know what? I actually was with some people the other day…” That could honestly happen in your brain because a lot of times that’s what happens. When you get information and you start talking to people about things, things spark other things. That’s how conversations work. But if you thinking outwardly, you’re not having to think about what to say.

Helping out other people in business is a really, really important way of creating a strategic alliances. That person could be a financial planner that deals with tons of different people. That person could be a dry wall or it could be a plumber, could be, who knows? But if they become a raving fan of yours and who knows, they may even become a client one day that you end up helping. You’d never know where something’s going to go. So figure out how to seed plant, figure out how to help other people, give them something first. Figure out, truly think about how to help these people’s businesses and they will help your business 100% just about every time. Not every time, but just about every time. You’re gonna experience that.

Everybody should know that you are open for business. You never want to make it out like you have too much business. You’re just so busy that you can’t take any more. That you’re just doing so great that you couldn’t use more business. I’ve seen it happen. I’ve actually had it happened to me where I’ve had clients, um, or somebody refer business to someone else that they knew because he got to believe this. You got to believe that everybody knows at least three realtors. You got to believe that. Everybody knows at least three realtors. So if I get to work with that person who knows at least a minimum of two other realtors, I got to be thankful for that. Right? And I got to own that and I got to do a great job of that. And then make them feel like I’m worthy of them referring other people to, right?

And so I already got to know that. So I had actually had it happen to me where someone thought I was just doing so well and I was so busy that I didn’t need any more business. So they actually gave business to somebody who is not busy at all, was actually whining and crying and complaining to them about the fact that they just didn’t have much business and they’re having a hard time. So that person, and that’s okay. Right. At least so, and you know what? It was kind of true. I was doing okay. It didn’t hurt me really, that the business went somewhere else, but that I learned a lesson from that. Yeah, absolutely. Everybody’s competition. We don’t need to do everything. There’s enough business for everybody. We got to have that feeling of abundance, all that kind of stuff. But in the sense of we should always operate humbly but confidently at the same time and be professionals. But not be boastful too much in the sense we got to watch that. There’s a balance there. So anyway, I’m going off on a tangent. I’ll come back. Bring me home back. Bring me home back. Okay.

Nurturing the relationships. Another strategic alliance that you should be looking for are other realtors that are doing business, not in your market area, that are doing businesses within kind of that 45 minutes to three hours away to other side of the country. If you’re involved with a really big franchise type company that has offices all over the country and you guys have conventions and stuff and you get together, go to those conventions, meet people and really mean it. Get to know people, find people that you know will do business like you. That would compliment you and that you would compliment them.

Look for those people. Seek them out. If you’re sitting down and having a drink, talk about your philosophies and how you do business and how you treat people and the things you like to do with your life and your ideal clients. All that kind of stuff. Like talk about that stuff. Strategies in your business. Just share with people and what’ll end up happening is they’re going to go: “Wow, I really like how this person does business. I liked their philosophies. I like how they think about the way they want to treat people. That is somebody I trust. Sending referrals to. That person’s going to be a strategic alliance of mine.” And then you will hopefully feel the same way about that person.

Next thing you know, you do that 10 times and you’ve got 10 realtors around the country and within an hour of your business, three hours of your business and you’ve got a bunch of people that you know, you like to work with and you honor the referrals back and forth very well. That’s some extra business that will come to you and it’s just awesome and you’ll find it comes to you when you need it. You know, kind of things are getting loan off and you get this phone call and “Oh my goodness, this is Bob from, you know, an hour and a half away. Super! Hey, nice talking to you. How are things going? How’s Joan?” You know, you get into this conversation. “Hey listen, I got a referral for you.” “Oh, that’s awesome! Super! What are they looking for?”

Other realtors. Think about that and that’s business to nurture. That’ worth making a little drive once in a while and having lunch, having dinner, meeting their spouse, you know, all that kind of stuff. And just kind of solidifying that relationship and thinking of ways to do business out there. You shouldn’t be doing business in places that you don’t know the markets. You don’t know the schools. You don’t know what’s going on. Really if you can, you can, but it’s not advisable.

It’s just an opportunity for more business to come your way. Honestly. It really is. So nurture those relationships if you can take time out. These are marketing dollars that you would spend on billboards and bus benches and enormous ads and marketing programs and all this kind of stuff. Well, buy lunch, buy dinner, put some gas in your tank. Reward referrals, send little gifts all the time, note cards. All those kinds of things are way less expensive than all the dollars that people are putting up. Plus you gotta eat anyway the time and you’re creating relationships that are solidifying more business in the future for you. So really important stuff.

The other thing, a local realtors, they should be people or… Sorry! They should think of you as someone who’s easy to do business with, right? So when you have a listing, you should have all the information on that listing. The surveys and the site surveys and the title abstracts and the title searches and basically all the information on that listing floor plans, whatever you can do to put together and make it easy for them to obtain so that they can do a good job for their client. They’re gonna love doing business with you. They’re going to love that your client is pulled up one of your listings, right?

But not only that, when you come to do an offer now and you start asking for certain things and they’re going to go: “Oh man, I didn’t get my stuff together to make that happen. But I feel like I got to get that for this person because they always do.” If you step up your game in your business and you’re cheerful and you’re respectful, and even in negotiations and even in times where you have a little bit of conflict or there’s a little bit of tension there, if you handle it properly and professionally and with reason and logic and you know, it’s not just two people trying to create a win-lose situation. If you’re trying to create win-win situations out of it, at the end of the day, yeah, you duked it out a little bit, but you respected each other at the end of the day.

The more you do that with the local agents that you do business with, remember, there’s only so many of those people and however they are or how many number there are, you’re going to have to do business with these people. And if they’re happy that you’re the one bringing an offer and you’re getting into negotiations and you start to explain your position in the negotiations, which is a whole other thing that we talk about in the 4X formula course. You start getting into that, they’re going to respect it a lot more. They’re going to take it to heart a lot more. Actually, what ends up happening is they’re going to take your words and they’re going to reiterate them to their client and because they trust what you’re saying. That you’re not coming from a place of trying to take advantage of someone, but you’re actually coming from a place of logic and understanding and professionalism.

Really think about that. A lot of people fail in this area and this is a huge area where they just tick people off and they have no problem ticking everybody off. They just don’t do good business. They don’t step up their game. That just everybody else needs to step up their game, but they don’t have to step up their game kind of idea. Those types of people, all they do is just tick people off. There’s lack of respect and honestly, there’s a lot more tension when you’re doing deals with those people.

So think about that. Think about those local people. Believe it or not, I’ve actually got referrals from local people, from certain circumstances that people end up kind of in a bad position with their clients for whatever reason and they still want to resurrect some sort of money out of it. They’ll think: “You know what, I’ll refer these people over to Kelly. I know he’s going to do a good job for them and at least I’ll get 25% out of it or something.” You know? So I actually have gotten referrals from local people who are doing business in the same area because I’ve done good business with them and we get along great and I’ve always treated them with respect. So always remember that.

Then mortgage professionals and financial advisors and people who are doing business with your people. Bankers, all that kind of stuff. You should be doing lunches. You should be doing meetings with them, talking about their ideal client, talking about the different things that are going on in the finance world. Get to understand that stuff. Mortgage professionals, especially if you are dealing with one financial institution, they could have a bunch of policies and they could have honestly in each financial institution, a lot of times they’ll have a niche that’s in their policy at the moment and it changes all the time where they’re going, you know what? We like this type of buyer or we’d like to lend to this type of client profile and this is their favorite one. And they believe that’s a niche market. And it could be a person who, you know, we’re going to create products that are really good for business, for self people or we’re going to create products who are really good for this type of client who has maybe a little challenge or a little little x on their credit, but you could see that they’ve developed and they’re working towards repairing that, you know. We’re going to be a niche lender for those type of people because they don’t fall into the right categories of other lenders.

Honestly, if you take the time to understand that stuff, you can start to become a really good resource for them and they will respect the fact that you’ve taken the time to learn their business and understand it a little bit. When you’re talking to buyers and they say, “Gosh, you know, I don’t know if I could do this because of this happened and blah, blah, blah.” And you get in these conversations and you’ll go: “You know what? I was talking to John over at ABC Bank and you know what? They have developed a product that’s actually quite unique and this could actually work really well for you in your circumstances or in, you know, your different area. You know. Do you want me to get him to give you a call and see if that’s something that could work when we set that up?” Keep people in your fold. Again, you are now the resource. You’re the one they trust, all that kind of stuff, right? So these are really important things.

Financial advisors, a lot of times, lenders will offer a certain type of insurance on the mortgage, mortgage insurance. Now if you think about it, mortgage insurance is a funny thing. It’s a declining balance. It’s being paid down, but you’re paying the same amount of money every month for this mortgage insurance for a declining balance. And that’s a whole long story. I won’t get into it too much but, sometimes you could say: “You know what, it might be a good idea just to, you know, before you agree to doing something like that. Maybe speak to a financial advisor. I’ve got a couple people I like working with. I’ve got one guy that I have, I do my own investments with and I trust him. I think he does work for me. I think he treats my money like his and all that kind of stuff and insurance is really important. So maybe we would it be alright if I gave you his name and number or gave him your information and maybe you guys can get together and he could figure out a way to help you out. Maybe even save you quite a bit of money.”

So that kind of stuff. Now that’s another person that’s a strategic alliance that you’re now helping his business. These people will all start referring business to you as well. So this is a whole other way of creating business that’s outside of just trying to get prospects and leads and all that kind of stuff. The idea that we teach through 4X formula is to create ways that business, various ways, a bunch of ways, where business can come in, but you got to go out and you’ve got to affect people in a positive way to get that to happen.

And I want that for you. It’s just such a more positive business, less stressful. And you can be traveling in Europe because you can afford to, for one. Because you can take the time off and your business won’t be affected because the people want to deal with someone they trust. They’ll wait for you to get back and imagine going on a little vacation, you come back and then all of a sudden people say: “Hey, I was waiting for you to get back and love to meet up with you and talk to you about listing my home.” Um, and you have these messages, or you have people that have basically said, hey, I’m looking at, you know, people looking after your business. They say: “Yeah, but they wanted to talk to you directly. And then they just said they wait until you get back.”

That happens a lot in my business and we’re very blessed with that and we’re very, very excited about it. It’s such a cool feeling to go on a little trip, come back and have that happening. So I want that for you. And it didn’t cost any money. It just took some effort. It took some intention and I just took basically the right attitude.

I hope this podcast for today helps you out and just, you know, get out there and roll up your sleeves but do with intention. If you want to get involved with the 4X formula training program, please do. It’s easy to do. We always have links. We always have ways to make that happen. Get on our email list. Whatever it takes and we’ll talk soon. Have a great day.