Circle Prospecting vs. Cold Calling

What’s the difference between cold calling and circle prospecting?

It’s a question we get asked every single day by real estate agents looking for strategic ways to generate more listings.

So what’s the difference? The difference can be found in the strategy itself. Cold calling is more like a shotgun approach; high volume calls across a large area in pursuit of connecting with anyone and everyone who might be interested in selling their home. There is very little “strategy” behind the approach, but that doesn’t make it any less effective. Cold calling itself is a volume game and its success relies heavily on consistent, high volume calling. Cold calling at random is really good for agents who might not have a specific targeted market where they want to generate more business and also for agents who don’t have any recent/active listings. In summary: highly effective way to generate business if it’s done at high volume consistently.

On the topic of strategy, we see a slightly different approach in circle prospecting. This approach gets its name by literally drawing a circle (or any geometric shape) around a specific target (maybe a recent sale or an active listing) and leveraging that recent success in the cold calls being made. For example, instead of just calling every homeowner in town and asking them if they’re open to selling, a circle prospecting campaign would discuss the active listing or recent sale on the call themselves, using a specific lever to generate interest. Let’s say the recent sale sold 10% over asking price and in 48 hours - that might be of interest to sellers in the area who are on the fence about whether or not now is the right time to sell. 

Both strategies are an incredibly effective way to generate more seller leads. In fact, over 20% of all the seller leads generated nation-wide are generated through cold calling. So by not implementing some kind of cold calling campaign, you limit your opportunity by 20% right off the bat. To learn more about your options regarding the implementation of an ISA or executing the strategies yourself, see our post about Outsources vs. In-House ISAs