When you break a real estate agents business down, there are only four ways to increase production. There are four proven avenues toward increased gross revenue. The four ways to increase production are:
Number of contacts
Method of contacts
Quality of the prospect
Quality of the presentation
When you begin working on any one of these, you have taken the step to becoming a Champion Agent. Once you have raised your level of the performance in each of these areas, you can call yourself a Champion!
Method of contacts
How we choose to make contact with people will determine our success level or the outcome. Having been in the real estate business for the better part of sixteen years, I can say that, in the last eight years, we have shifted away from the face-to-face, belly-to-belly, phone-to-phone business that I started in. I would contend that we are less personal today in business than ever before.
We rely more on communication via e-mail and mail than ever before. We are relying on the Internet to create leads, convert prospects, and sell homes. I believe the Internet and e-mail are wonderful tools. They create an ease of communication in marketing. They fall far short, however, of the standard for making sales. If we believe that we are going to drip our way to high volume sales and high net profit, then our thinking is pure folly. The personal service, counsel, expertise, and especially sales will never be removed from the business.
In the late ‘90s, we had a large volume of Internet prognosticators who cast a future vision of real estate sales via the Internet. Through websites, pay-per-click ads, organic traffic, and virtual tours, we were all going to sell homes easily. They would come to these magical web sites, watch the virtual tours of the homes, and click the “buy it” button at the bottom of the page. We would have just then sold a home! What all the Internet prognosticators missed was the fact that people would never make such a large personal and financial decision for their family through a few digital pictures and a click. The public still wants the personal service, expert counsel, market knowledge, and market interpretation of trends that a Champion Agent provides.
The problem is we bought into some of the malarkey that was being presented to us as an industry. We have become less personal, less intimate with our clients and prospects since that time.
When you look at the method coupled with the number of contacts, the pathway to success seems obvious. The number of contacts you need to make decreases as the method you select becomes more warm and personal. You would need better than 1,000 mail pieces to create a few leads. In direct mail, companies are only looking for a couple of percentage points of return. When using the telephone, you drop down in the low hundreds level for cold calling. I am not an advocate of cold calling; the odds are still too long to achieve a satisfactory result. (I define cold calling as using a criss cross dictionary or other list that is untargeted to call people randomly.) At best, you might work geographically to improve your odds.
When the method changes to target groups, the ratios improve to around fifty contacts to produce a few leads. Calling absentee owners, a geographic area you mail to, school directory list, orphaned past clients of other agents who have left your company, or any group that you can create where you can combine a target for mail and phone works. The results improve when you combine the mail and phone and maintain contact over a period of time. This is not a one and done strategy. You want to select targets you can work with profitably over the long run.
The last category is warm prospects. When you work to create revenue through this method of contact, you increase your odds to twenty-five contacts for a few leads. The contact points are your current clients, past clients, and sphere of influence people in your database. Most agents merely mail these people something periodically but never call them. When method of contact is exclusively mail, the results move back up to the thousands level when it should be in the teens. I would also place expireds and FSBOs in this twenty-five or less category. Because of their pre-demonstrated motivation, you are at least making contact with a more motivated individual, so your odds of lead generation and lead conversion to appointments is markedly better.
As would-be Champion Agents, we need to understand how the method of contact directly relates to our success in real estate sales. We must work to create a business that takes advantage of the odds that can swing in our favor if we use our contact method appropriately.
Dirk Zeller is a sought out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. The Real Estate community has embraced and praised his six best-selling books; Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies®, Successful Time Management for Dummies®, and over 300 articles in print. To learn more regarding this article, please visit http://realestatechampions.com/closingthesale/.