Skip to content In real estate, your most valuable asset isn’t your car, your technology, or even your license…it’s your sphere of influence (SOI). This network of people who know, like, and trust you represents your most reliable source of business, yet many agents underutilize this goldmine of opportunity.
Quick Links:
- What Exactly is a Sphere of Influence in Real Estate?
- The Remarkable Value of Your SOI
- How SOI Differs From Other Lead Generation Sources
- The Biggest Mistakes Agents Make With Their SOI
- Measuring SOI Effectiveness
- Conclusion
So in today’s post, we want to answer the question “What is SOI?” and why many real estate agents consider it the biggest factor to their long-term success.
What Exactly is a Sphere of Influence in Real Estate?
Your sphere of influence (SOI) is the network of people who know you personally or professionally and might refer business to you. Unlike cold leads, these contacts already have some level of trust in you, making them significantly more likely to work with you or recommend your services.
Who Should Be Included in Your SOI?
Your sphere of influence should include:
- Family members and relatives
- Friends and social acquaintances
- Current and past clients
- Neighbors
- Former classmates and alumni connections
- Colleagues from previous jobs
- Service providers (your dentist, hairstylist, etc.)
- Members of groups you belong to (church, gym, clubs)
- Parents from your children’s activities
- Local business owners you interact with
The key qualification is simple: if someone knows your name and what you do for a living, they belong in your SOI.
The Remarkable Value of Your SOI
According to the National Association of REALTORS®, around 20% of an established agent’s business comes directly from their sphere of influence through repeat business and referrals. This statistic alone should convince you of your SOI’s importance.
The $10,000+ Per Person Value Proposition
Each person in your sphere of influence represents significant potential value:
- Direct Transaction Value: Even with conservative estimates, the average commission on a home sale (approximately $10,000-$15,000 depending on your market)
- Referral Value: Each satisfied client refers an average of 2.3 people over their lifetime
- Compound Value: Those referrals can generate additional referrals, creating a multiplier effect
When you calculate the lifetime value of a single contact, including their own transactions and the referrals they generate, each person in your database is potentially worth $10,000 or more to your business.
How SOI Differs From Other Lead Generation Sources
Understanding how your sphere of influence compares to other lead sources helps explain why top-producing agents prioritize SOI marketing.
Conversion Rate Comparison
| Lead Source | Average Conversion Rate | Trust Level | Cost Per Lead | Time to Convert |
|---|---|---|---|---|
| SOI/Referrals | 40–60% | High | $0–$10 | Days to weeks |
| Online Leads | 1–3% | Low | $25–$100+ | Weeks to months |
| Cold Calling | 1–2% | Very Low | $8–$15 | Months |
| Direct Mail | 1–4% | Medium-Low | $15–$60 | Weeks to months |
Your SOI converts at dramatically higher rates because the trust barrier—the biggest obstacle in sales—has already been overcome.
According to research from Ardorseo, leads from referrals are more likely to convert than leads from other sources, and they typically require 82% less follow-up time.
Keep in mind that while your SOI conversion rate is very high, only 3-5% of them will actually sell in a given year (according to the most recent data available from REDX). That’s why the best agents supplement their income with leads much more likely to sell like Expireds, GeoLeads, FRBO and FSBO leads. Check them out at https://www.redx.com/products/
The Biggest Mistakes Agents Make With Their SOI
Despite its value, many agents mismanage their sphere of influence. Here are the most common mistakes and how to avoid them:
1. Inconsistent Communication
The Mistake: Contacting your SOI only when you need business.
The Solution: Implement a systematic contact schedule:
- Monthly value-add emails or newsletters
- Quarterly personal check-ins
- Semi-annual client appreciation events
- Annual reviews or market updates
If you’re contacting your SOI only when you need business, you get what Growth Minded Agents calls “Commission Breath”. Which refers to when you get so excited about the commission or about trying to get a deal, your clients can tell you are only seeing them as potential to make money.
So to avoid commission breath, try keeping your SOI active and engaged in your communications. Direct email can be a super valuable strategy for keeping your SOI engaged according to Ricky Carruth.
2. Failing to Track and Organize Contacts
The Mistake: Keeping contacts scattered across various platforms without a system.
The Solution:
- Use a dedicated CRM to organize your SOI
- Categorize contacts by relationship type and potential
- Track all interactions and important personal details
- Set reminders for follow-ups and important dates
Here’s why failing to track and organize contacts is a mistake. Your SOI is only valuable as long as you are keeping in touch with them at strategic times. If your sphere just uses another agent, they are no longer of value to you.
So make sure you are keeping track of your leads. Check in with them regularly (not too much!) so you can be in the know when homeowners are ready to buy or sell.
3. Not Providing Consistent Value
The Mistake: Making every interaction about real estate or asking for referrals.
The Solution:
- Follow the 80/20 rule: 80% value, 20% business
- Share useful market information, home maintenance tips, and local resources
- Celebrate personal milestones and achievements
- Offer genuine help without expectation of return
Real estate is a people industry, and if you forget about the people involved in the transaction, you won’t be in it for long. Remember to try and make friends along the way!
4. Treating All SOI Contacts Equally
The Mistake: Using the same approach for everyone in your database.
The Solution:
- Segment your SOI into A, B, and C tiers based on relationship strength and referral potential
- Customize your approach for each tier
- Invest more time and resources in your A-level contacts
- Create upgrade paths to move contacts from C to B to A over time
Not every contact in your SOI should be treated the same. Some are “hotter” than others, and some will be harder to work with than others. By prioritizing and segmenting your contacts, you are more likely to convert your SOI into listings much better over time.
Measuring SOI Effectiveness
So how do you know if your SOI is worth investing in? The only person who can answer that question is you, and it requires tracking essential metrics.
To ensure your SOI strategy is working, track these key metrics:
- Contact Growth Rate: How quickly is your database expanding?
- Engagement Rate: What percentage of your SOI opens emails or responds to outreach?
- Referral Rate: How many referrals do you receive per 100 SOI contacts annually?
- Conversion Rate: What percentage of SOI-generated leads convert to transactions?
- ROI: What’s your return on investment for SOI marketing activities?
Set benchmarks for each metric and review them quarterly to refine your approach.
Conclusion
Your sphere of influence isn’t just a list of contacts—it’s the foundation of a sustainable real estate business. When properly nurtured, each person in your SOI represents $10,000 or more in potential commission income through direct business and referrals.
Unlike other lead sources with low conversion rates and high acquisition costs, your SOI offers the highest ROI because these relationships are built on trust. By implementing a systematic approach to SOI management and communication, you create a renewable source of high-quality leads that can sustain your business through any market conditions.
Even though your SOI is a good source of potential revenue, it only converts at a roughly ~5% rate annually. That’s why successful agents also prioritize prospecting highly converting leads like Expireds, GeoLeads, and FSBO/FRBO leads. Learn more about these lead lists at redx.com
