How Dan Demott built a team doing $35 million in volume with circle prospecting

Dan Demott00:03

Circle prospecting, I think, is the most natural addition to lead generation for any agent. And the reason I got into circle prospecting was this idea of, okay, I have one piece of business. How do I turn it into two or three pieces of business? Let’s use this piece of news, this listing in this neighborhood, and let’s call all the neighbors.

00:17And that’s basically the process of circle prospecting, right? Is taking some piece of news you have, a new listing, an under contract, or a just sold in a neighborhood, and calling all the neighbors to let them know, “Hey, I did some business in your neighborhood, and that’s going to affect the value of your home.”

00:32“And do you have any questions about that?” And we just found it to be one of the most successful ways to get additional business from anything that we already had.

Loida Velasquez00:55

Welcome back to a brand new episode of Vulcan7 Coaches and Mentors, where we bring you some of the best in the industry to share with you their tips and strategies so that you can implement in your business immediately. With that being said, if you haven’t caught up on our previous episodes, make sure to watch them on YouTube or listen to them on your favorite streaming platforms.

01:15Now, with that being said, today we’re gonna be talking about a topic that perhaps some of you might be neglecting, and that is circle prospecting. And for that, I’m gonna go ahead and bring on today’s guest, Dan Demott. So Dan, welcome.

Dan Demott01:30

Hey, Loida. How are you?

Loida Velasquez01:32

Doing great. We’re really excited to have you on today’s episode.

01:36So for everyone that’s listening that maybe is not familiar with you, go ahead and introduce yourself and tell us a little bit about your background.

Dan Demott01:42

Sure. My name is Dan Demott. I’m the owner of the Home Source Team and a past Vulcan7 guest on the Roadshow. And Vulcan7’s been a big part of our business.

01:54I started as a solo agent like everyone else in 2018, calling my database and working every lead I could. But our business really took off when we started circle prospecting with Vulcan7. And over a period of four years, we went from, again, as a solo agent to building a team, doing over a million dollars of GCI and $35 million of volume.

02:17And circle prospecting was a big part of that, and I have taught my team to do it and since gone on to be a team lead and help other agents grow and implement circle prospecting in their business.

Loida Velasquez02:28

That’s awesome. And it’s so exciting to hear the success that you have had with circle prospecting because sometimes agents focus maybe on just one or two other lead sources, and they kind of think, “Circle prospecting, I’ll get to it whenever I have time.”

02:43So can you kind of share with us what your strategy looked like or what even made you wanna focus on that and how you leveraged circle prospecting?

Dan Demott02:53

Absolutely. So here’s why circle prospecting, I think, is the most natural addition to lead generation for any agent. Let me make that case first.

03:02Most agents get a piece of business from their database, someone they know, sphere of influence, referral, something like that. And the reason I got into circle prospecting was this idea of, okay, I have one piece of business, how do I turn it into two or three pieces of business, right? And so anything that came out of my database, I was always looking for a way, okay, how can I leverage this?

03:23Traditionally, at the time I had a coach, and he said, “You should host open houses,” and that just wasn’t my thing. But we decided that, you know what? Let’s use this piece of news, this listing in this neighborhood, and let’s call all the neighbors. And that’s basically the process of circle prospecting, right?

03:42Is taking some piece of news you have, a new listing, an under contract, or a just sold in a neighborhood, and calling all the neighbors to let them know, “Hey, I did some business in your neighborhood, and that’s going to affect the value of your home. And do you have any questions about that?”

03:58And we just found it to be one of the most successful ways to get additional business from anything that we already had.

Loida Velasquez04:05

That’s awesome. So how often were you doing this?

Dan Demott04:08

We would do it on every one of our listings and continue to do that today. Depending on how active the market is or how quickly things turn over will guide how much of that process we can complete.

04:22But generally, we’re trying to reach out to all the neighbors when we list the property, when we go under contract, and then again when it closes.

Loida Velasquez04:31

So I know whoever’s listening, they might be wondering, are you calling the same people every time? Like, “Hey, we just listed. Hey, we went under contract. Hey, we sold.”

04:39Or do you change it up also?

Dan Demott04:41

Yeah. No, we’re calling the same people. Anybody who’s done any amount of cold calling knows you can’t get them all in one shot. And so we want everyone to know, one, we’re gonna be persistent. Two, we’re calling with information that’s relevant to them, and so they should give us a chance.

04:57And also, you just never know how timing works out. Sometimes people can’t answer the phone the first time, but they can the second or third time. With that process, we also back it up with postcards. So we’re sending postcards out to those same people that we’re calling on Vulcan7, and so they’re seeing our name, they know why we’re calling.

05:14They’re seeing the progress of our listings.

Loida Velasquez05:18

So another question that I think people are probably wondering is, or they probably think, I think circle prospecting, maybe you get a lead here and there, but they take a long time to convert. Did you ever get any people that were like, “You know what?”

05:31“I actually am thinking about selling or buying,” or was it like a fast turnaround, or what did that kind of look like?

Dan Demott05:37

Yeah. I would say more often than not they are fast turnarounds, right? So the misperception is that circle prospecting is slow long-term nurture, and you do get some of those. You do get a lot of those.

05:50Which I always place tremendous value on. If I can start a relationship with someone, put them in my database, and nurture them over the long term, that’s a great lead. But you end up getting a lot of people who are ready to transact in the short term, and what I always loved about circle prospecting is those people self-identify.

06:08So when you call someone and say, “Hey, we just listed your neighbor’s house. It went under contract in a week. And I’m just calling to see if you have any questions about what that means for you,” those people who are most serious are the ones who are most likely to say, “Yes, actually, I do have questions.”

06:22“What can you tell me about that sale?” And so the conversation naturally flows from that because you’re addressing a concern or a need that they have in the short term.

Loida Velasquez06:32

Awesome. So I wanna do a little role play. That way people can kind of see how your conversations go. So I’ll be the homeowner, and you can just ask me, tell me whatever it is that you usually do.

Dan Demott06:43

Absolutely. So let’s go for it. Ring, ring.

Loida Velasquez06:46

Hello?

Dan Demott06:47

Hey, Loida. This is Dan Demott with the Home Source Team. How are you today?

Loida Velasquez06:52

Good. How are you?

Dan Demott06:53

Excellent, thanks. Hey, I don’t wanna take too much of your time, but I just sold your neighbor’s home at 123 Main Street. It was a record high sale. We got it under contract in two weeks.

07:03I’m just calling to see if you have any questions about what that sale means for the value of your home.

Loida Velasquez07:08

Wow, it went under contract in two weeks. How much did it sell for?

Dan Demott07:10

It did. We sold it for $650,000. It was 20,000 over the asking price.

Loida Velasquez07:17

Oh, wow. I didn’t think it was worth that much. I mean, how much do you think my home might be worth then?

Dan Demott07:23

Absolutely. There’s tremendous demand for the neighborhood. So listen, if you’re curious as to what it means for the value of your home, as you should be, here’s what I’d love to do. I’d love to send you over some information on our sale. Take a look at it and let me know how your home compares to that one, right?

07:39Do you have a different model? Do you have any upgrades you’ve done? And then let’s get on the phone tomorrow and talk about what the value of your home could be. Does that sound like a good plan?

Loida Velasquez07:48

Okay. Yeah. Perfect. That works.

Dan Demott07:50

Fantastic. What’s the best email for me to send that to?

Loida Velasquez07:54

loida@yahoo.com.

Dan Demott07:55

Excellent. And tomorrow, would 3:00 be good or is 4:00 better?

Loida Velasquez08:00

Probably later, so maybe 4:00. You can circle back then.

Dan Demott08:04

Perfect. So I’m gonna get this email out to you today, Loida, and tomorrow at 4:00, let’s have a call. You’re gonna let me know exactly how your home compares to this one, and then I’ll be able to give you an accurate assessment of what your home is worth.

Loida Velasquez08:15

Okay. Awesome. Thank you.

Dan Demott08:15

Awesome. I look forward to it.

Loida Velasquez08:18

All right. Thank you. Okay, awesome. I appreciate you doing that role play. I think it’s great for agents and people listening to kind of see an interaction to get an idea also on the verbiage and just how easy it sounds. You’re not asking already questions like, where do you think you would be moving to or any of that.

08:36Do you do that on purpose where you try not to ask too much to not blow them away?

Dan Demott08:41

Yeah, exactly. Here’s the number one thing that I find agents make a mistake with when they get on the phone is they’re trying to close for something bigger than they’ve earned the trust for. So if I’m calling you out of the clear blue sky, you’re not expecting my call.

08:55Great, I’m calling you with information that’s relevant to you, but how much can I really ask you, right? I haven’t earned that trust yet. So what I always teach agents is, we just wanna close for the next step, right? So from where we are on a cold call, we wanna close for a follow-up call. From the follow-up call, if that goes well, then I wanna close to come out and see your house.

09:14And on that follow-up call, maybe I’ll ask some more questions about what your motivation is and how soon you’re thinking about moving or why you’re thinking about moving. But I always wanna go one step at a time because with the script that we just went through, we’re building the foundations of trust.

09:30I said I’m going to send you something. You said you’re gonna review it and get back on the phone with me. So we’ve both made a small promise to each other, and as long as we both agree to honor that, we’re building trust as we move forward. From that next call, then I wanna build even more trust and hopefully get the opportunity to come meet with that person.

Loida Velasquez09:48

Yeah.

09:48It’s almost like you’re taking little baby steps, and then the person sees, “Okay, this agent Dan, he’s not really pushing to try to sell my house. I mean, I don’t even know who he is, but at least I can find out more about the home that he sold.” And then that just makes a conversation continue.

Dan Demott10:03

That’s right. And when we send that email, we’re gonna include a link to our profiles and our reviews and give a little summary of our team, along with the information about the recent sales in the neighborhood, and it invites that conversation. And naturally what we find is one of two things happens.

10:21When we get on that call, that person’s going to say, “Well, I have upgrades,” or, “I have this bigger floor plan,” or whatever the case may be, which is great. Now they’re giving you details so you can better value their home. Or they’re going to say, “You know what? I just kind of wanted some information.”

10:40“I’m really not looking to sell in the short term. I’m more of a longer term, maybe a year from now,” or something like that. So it helps us. It lowers the stakes and helps us categorize people in the right categories. The other big benefit though is when people no-show. So anybody who’s made a lot of cold calls knows, you book an appointment, they cancel on you or they don’t show up or whatever the case may be.

11:03By making it a small step and by saying, “We’re just gonna build the foundation of trust. I’m gonna send you an email. You’re gonna agree to talk to me again,” we have a really high show rate on those calls. And when people don’t show, I always teach my agents, just message back, “Are you okay?”

11:23Because Loida, if you told me you’d get on the phone with me tomorrow at 4:00, and I sent you the email, and you don’t show up, I’m gonna assume that something must have gone wrong because you’re a great person and you wouldn’t have promised me to get on the phone with me if you didn’t mean it.

11:38Yeah. And what we find is, when we send that message, “Are you okay?” Sometimes it takes a day, but always people are like, “Oh my God, I’m sorry. Let’s reschedule. I wanna get back on the phone with you.” So people will honor their promises if you honor yours.

Loida Velasquez11:51

Yeah. And I love that entire process because even as we role played, if I was a homeowner, I would think that this is something casual.

11:59I’m gonna get information. I don’t have to do anything. And I love the “Are you okay?” text message because it’s almost like they see, “Oh man, I forgot about Dan. Let me get back to him,” or, “You know what? Something came up,” or, “Actually, I’m not interested,” or whatever it is. But at least they respond to you, and now you know where to take the conversation or if they’re someone that you wanna pursue, right?

Dan Demott12:21

Exactly right. If we back up, at a higher level, I try to always explain to agents, I put everybody in one of two categories. Either we’re gonna do business right now, or eventually we’re going to do business. And in real estate, our sales cycles are so long, right? You might need to nurture a relationship with someone for three, four, five years before they’re ready to sell their home.

12:43We can’t be transactional. We have to be relational, right? So I wanna develop a personal relationship with someone. I want that person to trust me as an individual. I wanna bring them value, and I wanna do that over a long enough period of time because if I do that, I will get the transaction.

Loida Velasquez12:59

Exactly.

12:59Awesome. So let’s say there’s maybe a newer agent that’s watching or listening to this, and they’re like, “You know what? I don’t have any listings. I haven’t sold anything. I’m a solo agent kind of on my own.” What would you recommend for them to do when it comes to circle prospecting?

Dan Demott13:13

Yeah, absolutely.

13:14Here’s the great thing. It works just as good if it’s not your listing. The odds are most agents are not doing this. So if you wanna break into a neighborhood or you’re just getting started, do a little bit of research, go on the MLS, find the recent sales, find what’s important about them. Were they on the market for a short period of time?

13:36Did they sell for a record high price? And really understand the market, and then circle prospect based on that information. So instead of saying, “I sold your neighbor’s home at 123 Main Street,” I’m gonna say, “Did you know that your neighbor’s home at 123 Main Street sold, and it was a record high price?”

13:53Or, “It sold in 10 days.” Right? So you don’t have to be the agent who actually did that transaction. The information is just as valuable to the homeowner.

Loida Velasquez14:03

There you go. So if you’re listening to this, definitely rewind, replay, rewatch up to this point so that you know exactly what to say and what to do.

14:12Now, Dan, I know that a couple minutes ago you mentioned that you send out also postcards, right?

14:18Is there anything else that you send out, or what does that look like in terms of, let’s say you got someone on the phone, when is the first postcard going out, and how many are you sending out?

Dan Demott14:30

Yeah. So I like to send postcards. Of course, a just listed postcard or an open house postcard, depending on how the timing works out. So as soon as the listing hits the market, we’re gonna put that postcard out. When we go under contract, we’re gonna send another postcard that we went under contract, and then after we close, we’ll send a postcard there as well.

14:48And again, depending on the timing of the transaction, but given the opportunity, we’re gonna wanna send all three of those postcards and make calls to go with them.

Loida Velasquez15:00

Mm-hmm. So does it ever happen where you’re making calls and a homeowner says, “Oh, yeah, I actually did get your postcard and I have it here”?

Dan Demott15:08

All the time. All the time. Yeah.

Loida Velasquez15:11

I’m sure that that’s exciting because it just shows that what you’re doing is working, and now they’re remembering you, so by the time they ever do decide to do something, you’ll probably be the first one that pops in their mind for real estate.

Dan Demott15:23

Yeah, it’s about frequency.

15:26In all things, when I coach agents on database or social media or circle prospecting, it’s all the same. At a fundamental level, it’s about message and frequency, and frequency is probably more important than what the message is. You have to always remember that someone gets a postcard, they look at it.

15:44If we’re lucky, they’re gonna look at it for four or five seconds before they throw it in the trash can. One time is likely not enough, but over the course of three times you’ve made an impact. And if somebody has three postcards and two missed calls from you, they are far more likely to know who you are on the third phone call than if that was your first call.

Loida Velasquez16:05

Exactly. So let’s say there’s an agent that says, “You know what? I want to target a higher price point because my neighborhood or somewhere around me is just a little bit lower. I want to take it to the next level.” What would you suggest for them to do?

Dan Demott16:19

I would suggest you follow this exact same process and script.

16:24I have coached agents who are using it at every price point. I have an agent that I coach who’s gotten three, four, and $5 million listings using this exact same script. It turns out that regardless of how expensive a home is, human behavior is the same. Everyone’s curious about what their neighbor’s home sold for and what it means for them.

Loida Velasquez16:44

Awesome. So Dan, I want you to also share with us any coaching, any programs that you have, because obviously this has been great information regarding circle prospecting, and I know that you’re also an expert in database marketing, social media. So tell us a little bit more about your coaching, and I’m sure that we’re gonna bring you back so we can have another conversation on a different topic.

Dan Demott17:04

Yeah. I’d absolutely love that. Anyone is free to check me out on social media, on Instagram and Facebook, @dandemott, or you can go to my website, dandemott.com. I give away a ton of free resources on lead generation, scripts, circle prospecting, database marketing, social media.

17:21We have a group coaching program, and then I also do selectively one-on-one coaching with agents. But the best way to get started is go get all my free resources. If anybody wants a copy of this script, we have it written out. They can send me a direct message, and we’ll get a copy to them. I’ve had so many agents reach out to me after the last time I was on the Vulcan7 Roadshow.

17:44And I love to help them. I share my scripts and resources with everyone, and from there, we can assess if it makes sense for someone to participate in one of our coaching programs.

Loida Velasquez17:53

Awesome. And we’re gonna make sure to put all of your links in the description box below. So Dan, thank you once again for this amazing session, sharing with us your tips on circle prospecting.

18:03We’ll definitely bring you back so we can talk about marketing and social media. So for those of you that are watching, make sure to go and check out all of the things that Dan offers, and we’ll see you on the next one. Bye.

Dan Demott18:14

Bye.