Year End Stats - 2011

I’m putting together stats from the past year and have come across two important stats that I wanted to share with everyone. Hopefully it will show the importance of building relationships quickly.

Stat 1

2008 or earlier - 15%
2009 - 22%
2010 - 27%2011 - 37%

Look at the numbers from 2010 and earlier, 63% of our sales are because of our systems of listing updates and follow up phone calls. This is all that matters. If we did nothing with those leads, we would get exactly that from them....nothing!


Stat 2

This one is based on the 37% of our buyers this year that bought from leads in 2011.

41% bought within 90 days
38% bought within 180 days
21% bought within 365 days

What does that tell us? To me it looks like most buyers are buying within 90 days even though our average has been consistent at 233 days the past couple years. This means if we do a better job of getting hold of our leads sooner verse later, we can turn sales quicker. Also, for those Agents that only try to get hold of a lead once, this should show you that you need to be on top of your leads and call multiple times to earn their business because if they are going to buy in that 90 day window, you don't have much time.

Suggestions

As much as follow up with leads is crucial for long term conversion, be sure that you are calling your new leads at least 3-4 times to get hold of them. The stats above say we are probably missing a ton of sales by not getting hold of these leads quickly and building a relationship with them.

If you have an LCA, once you know the Agent has made contact, follow behind them and give the lead a quick call to introduce yourself and let them know that you and your “assistant” will be doing everything we can to help them find their home. Ultimately they have to like you, the Agent, if they are going to use you. If there relationship is just with an LCA, then you have not built any trust or relationship which will lower their loyalty level to you.

LCA Changes

So you all know I'm a huge advocate of taking lead conversion out of Agents hands. This week we have made one step closer by implementing a new position called an IML (Internet Marketing Liaison).

What I've realized over the past year is even thour our LCA's do a great job of calling our leads, their talents are wasted on the prospecting part of our business. Our IML will fill that part of our business model now and do all our prospecting on leads we have never been able to get in touch. This will allow the LCA's to concentrate on more active and revenue generating leads.

In the end, it's about helping as many our leads (customers) buy and sell homes. The best way we can help them is by creating systems that help my Agents. With the new way we are doing things, the LCA will now also be making our first call to our new leads. They will now ensure that each of our new registrations will be called multiple times until we get hold of them. Currently our Agents call once, maybe twice, and then let it go. It's all about maximizing.

My next webinar in two weeks is going to go over our first two weeks or results with our new IML program. I'm looking forward to helping everyone understand this process as I believe it's a game changer.

Interesting stats

At the end of June I was asked a question which I didn't know the answer. I was asked what percentage of our closings are from the current year leads. Interesting I thought since I have never done that equation. Of course that made me have my stat girl, take a look at our 2011 sales through the end of June. Here are the stats:

48% of our sales came from leads from 2011

25% of our sales came from leads from 2010

27% of our sales came from leads from 2009 and earlier.

This isn't off from what I had thought they would be. In fact, it solidifies my belief that those Agents who stay in touch with their customers will have more sales. I know I'm always hounding everyone about the importance of building relationships, and this is the reason why. More than 50% of our sales come from leads that are 9 months or more old.

If you are complaining because business and bad and you are broke, pick up the phone and within a short time your life will change!

Call your leads!!!!!

To charge or not to charge

I can't believe it's been over a month since I posted. I've been quite busy evaluating my Real Estate company and making decisions to take the company to the next level. It does seem no matter how much I want to help my Agents become all they can be, I have trouble getting sustainable momentum from them. Over the past couple months I have been working on this and trying to figure it out.

Basically, through all my work, I have figured out that I can't really motivate the Agents. They must reach inside themselves and decide if they really have what it takes to be a top Agent. They are certainly great people and have all the tools at their disposal, but yet they just can't take that next step.

With this said, in our last office meeting, I was discussing what is holding them back to reaching their potential. One of the Agents made a pretty strong statement. He said, "until you are threatening our jobs, we probably won't work any harder". That hit me pretty hard because he is probably right!

This coming week I'm meeting with my core staff. These are a mixture of Agents that have been with me for at least 4 years. We are going to discuss where and how we are going to bring our brokerage to the next level. My mind is leaning toward a pay system for the Agents. Meaning, they will be charged a monthly fee for leads which will go away based on closings. The problem I'm finding with most teams operating a similar model to me is the lack of financial buy in by the Agents. With this system, the Agents do have a buy in but also have the ability to not pay anything based on closings. I'm hoping this will increase the Agents dedication to the leads and generating business on their own.

The question, to charge Agents or not to charge. If I had to do it again, I would certainly have charged a monthly fee, probably around $200 - $250 per month. If they have one closing it would go down to $100. If they had two closings it would go down to 0. If they had 3 closings they will receive a credit to use during a month they might be slow and so on. I believe that the buy in might be just what the doctor ordered to increase sales.

I'll keep you posted!

To call or not to call

I've received a bunch of calls recently about whether or not you should call your leads or not. I know you all know how I feel about this, but I wanted to comment. Here is what this company is saying. They believe that you shouldn't chase leads (prospect). They believe that when a lead is ready to buy, they will be contacting you.

Here is the reality. There are certainly leads that will contact you when they are ready to buy as long as you have been sending them listings and what they are looking to buy. However, the question isn't those leads, it's the leads (money), that you have left on the table because you didn't make any calls. Simple answer. My Agents (who no longer receive leads) who didn't make calls would get 5-10 sales per year without lifting a finger. Yup, it's possible. However, my Agents that make calls sell 20-30 homes per year from leads. The numbers don't lie.

Let's look at another scenario. You are sending someone listings and never call. You never have any conversation except maybe an email or two. They are on another website, which they are always, and that agent calls and has a discussion with them about their home purchase and continues to follow up. Who do you think they are going to use when it comes time to buy?

In the end, those who give great customer service and follow up will always sell more homes than those who just wait for the leads to call you. I know it sounds great...you never have to make a call and the sales just come pouring in. As long as you don't mind losing a ton of sales, I guess that's ok. Frankly, I spend much too much money on my Internet marketing, I'm not about to let them go if I don't have to.

Prospect your database, you have a gold mine sitting there, all you have to do is call!

Lead Conversion Agent - The Name has changed, the position is the same!

I know lately I have been talking a lot about the LCA position. I've recently changed the name of Lead Conversion Administrator to Lead Conversion Agent. Why you may ask? Well we recently ran into an issue with the IRS because they believe that mainly because of our name of our LCA (and because we were giving them a base pay), that they are administrators not Independent Contractors. This of course has major tax implications so we decided to change the name to better describe what an LCA is in reality. We continuing to discuss this with the IRS, but why leave things to chance.

Why am I so committed to the LCA program? It's quite simple, I know that the more people we contact, the more loyalty we earn. The loyalty we earn will turn into more sales and more customers for life. In reality, our Agents are only making money if they are out in the field showing homes, taking listings and writing offers and contracts. Our LCA position is the future of our business. It will eventually take the Agent out of the lead conversion role and more into the Realtor role. After all, most of our Agents are great Realtors, but that doesn't make them great lead converters.

Recently we have been able to really start refining the program. Once we started with our new phone calling system, the MOJO system (you can check it out at www.resnphonecalls.com), in November, we knew we were taking the LCA position to the next level. Now we know we can contact the volume of people needed to generate more showings which in turn means more sales. However, we were still not converting the number of showings I wanted. This past week we figured out another piece of the puzzle. We realized that it wasn't the volume, but better deciding which leads to call.

Our LCA's were spending most of their time calling our Good phone number no contact leads. We had thought that if we can contact these we will be able to save a ton of leads. The program worked well. However, we realized this past week that this category, our prospecting category, should be just called 1 week per month. We also realized we have two categories that really are our most active leads, our shown property leads and our calendared leads. These are the two categories with the most potential to get people in our Agent's cars today.

So here is our new calling schedule for an average month:

Week 1 - Calling our Good Phone/No Contact

Week 2 and 3 - Calling our most active leads that have yet to schedule a time to come see homes.

Week 4 - Calling our shown property did not buy and our calendared categories. This is done the 4th week of the month confirming those leads who booked for the following month first, and then the shown property leads. Recently we added the ability to search our database based on leads that have saved listings along with opened their emails in the last 30 days. In the last 30 days we had 801 leads that have opened their emails and saved at least 1 listing. We can also search those leads by price range they saved. This is a huge step in building our business.

Is this the final step? I doubt it! Most of you who know me know that I'm not going to rest until we are able to convert at a 10% clip. We are actually a lot closer to that than our numbers show. I believe with more refinement of the program and better use of our 100mph marketing program, we will be able to really take the next leap. We are almost there and I know you will be watching!

Are Internet Leads Bad?

Internet leads are as good as you want them to be. I believe that about 30-40% of the leads we have are actively looking to buy a home. Whether or not we will be their Agent is really up to how well my Agents, or my systems, help those customers become our customers!

If you read any of my manuals, or my book, you know that I have the 40% rule. We have found that approximately 40% of our leads are active on our site. So why would we not be their Realtor? The main reason is lack of follow up. Most Agents have no system in place to convert these leads (customers) to customers for life (sales).

So are Internet leads bad? NO! The key is are you good enough to convert these leads to sales. In most cases, most Agents, are not good enough. Ok, I can see everyone swearing at me right now from saying they are not good. I don't mean you aren't a good Realtor. I do mean that you may not be good at sales. The most important aspect of sales is prospecting and conversion. If you are not prospecting in Real Estate, you are not maximizing your sales. By collecting Internet leads, you are giving yourself the ability to prospect your own database verse cold calling trying to get appointments.

Personally I would prefer to spend my time calling leads that I have built a relationship by sending listings, just checking in letters and the other info that allows us to stay in touch with our customers. I'm not a big fan of cold calling. I'm a huge fan of warm calling.

If you really want to be successful in your business career by using the Internet, then you can't look at Internet leads as bad. You need to look in the mirror and ask yourself if you are doing the best job you can to convert those leads to customers for life.

Looking at the numbers

We ended up 2010 with 329 sales and a lead conversion rate of a little over 4.25%. Not bad. I'm excited about this year because I think we will start seeing a rise shortly in business. There seems to be a little bit of confidence out there. I sure hope I'm right.

Every January we get a good amount of new members who want to make changes in their careers. Welcome to all of you who are new! One of the things I think is a MUST, is understanding your numbers. It's almost impossible grow your business without understanding the numbers.

So what do you need to know? Well in my case, I always want to know my gross number of leads per year. Then of course I look at our total sales. Once I know my sales per leads numbers, I can make adjustments from there.

Let's look at real numbers:

If you are spending $1,000 a month on PPC marketing at $1 per click and a 10% capture rate, this means you would receive 100 leads for that marketing expense. If you close at 2%, you will be getting 2 sales out of that 100 leads. Your cost per sale is $500.

So how can you increase sales with this amount of information? Firstly, you can easily increase your monthly spend to $2,000 per month on PPC. This theoretically should double your sales. But what happens if you also increase your conversion rate with good systems? If you get to where we are this year at more than 4 sales per 100 leads, your cost per sale goes down to $250. Not bad!

As you are putting your plans together to grow your business. Remember, it's all numbers. Everything you do in your business can relate to numbers. Once you understand how these numbers affect your business, you can then strengthen those areas to increase production. Not as hard as it seems. If you have any questions, watch our knowing your numbers webinar. It breaks this down a lot more.

Understand your numbers, change your business. You are almost there!

Working Internet Leads - It's all about mindset

As most of you know, working Internet leads is pretty much my life these days. Ok, it has been for the past 9 years. Almost daily, I read posts throughout the Internet on the subject. I read different views on so many aspects of lead conversion and most of the times it is from people who don't have any success converting Internet leads, but they are quick to tell you how to do it.

One thing I always say is, I don't know if my system is the best system on the market. I don't know if someone out there is doing a better job than I am or that my brokerage is at closing deals from the Internet. I do know however, that my system works great for myself and my brokerage.

I think the most important aspect of lead conversion is mindset. How do you handle your Internet leads? Do you send them an email asking them if they need anything and letting them know you are there for them? Do you get many if any responses? Is your mindset that if they were really serious about buying a home they will call me? How is that working for you so far?

It's about mindset. Working any sales job is about numbers. The more people you contact and build relationships with, the more sales you get. I don't really care if you are selling vacuum cleaners, cars, medical equipment or houses. It doesn't matter. The more relationships you have, the more sales.

There is one belief that I have and I believe most of my Agents have that changes the game. When most Agents are telling leads who are buying in a year to call them if they need them, we are looking at that lead as an opportunity to create a great relationship over the next 12 months. Do they all buy? Of course not. But, we know that if we build a great relationship, we will be their Realtor if they do buy.

There is so much more that goes into lead conversion than a great mindset, however, it is by far the most important aspect of converting leads. If you don't have the proper mindset, you will never do a great job using the Internet to build your business. Don't be one of those Agents that throw a ton of marketing dollars at the Internet and yet don't have the right mindset. If you look at each lead and each contact as a potential new customer for life and spend your follow up developing this relationship, you will win. It's that simple.

To learn more about the proper follow up systems, go to the Lead Conversion Simplified webinar within the site. This webinar is the easiest to follow and understand the importance of having an easy to follow seminar to grow your business.

If you have questions about your lead conversion programs, don't hesitate to let me know. I'm always available to enjoy a great discussion about helping you become a strong Internet Real Estate Agent!