Articles for Realtors

The Science of Lead Generation – Part 1

In previous posts, I wrote a 3 part series on the science of lead generation. The next few posts are going to be focused on converting those leads into appointments, and ulitmately deals.

Once you have a handle on lead generation, you’ll have a regular flow of leads, and life will be wonderful. Or will it?

Leads, my dear friends, are the lifeblood of your business, but if you aren’t getting qualified leads or you cannot convert these leads into appointments, sadly, all your efforts have been a waste.

Obviously, the goal is to convert leads into appointments!

For those of you who have an assistant and believe that lead conversion is “beneath” you, I urge you to take personal control over this critical process. In days gone by, I have been foolish enough to rely on others to convert my leads for me, and I can assure you that NO ONE will be as good at converting leads as you. If they were that good, they wouldn’t be working for you!

Converting a lead is really a 3 step process. You start by capturing the lead, you then need to connect with them (which assumes you captured enough information to do so), and then, after a period of time, you are going to close for an appointment. Without the appointment, the conversion hasn’t happened. Its that simple.

According to NAR research, 2/3 of all buyers and sellers only one agent, and the half of the remainder only interview two. Because of this, getting to the table first or second is what matters. Any later than that, and you might as well forget it.

So, with that said, your success, or lack thereof is largely going to be determined by your ability, or lack thereof, to consistently capture, connect, and convert your leads, and to do that, you are going to need to rely on scripts and systems. Oh, sure, you could just wing it, but do you think McDonalds would have been as successful if they told each cook just to wing it? Not likely. Ultimately, your sucess is going to boil down to your knowing what to say and what to do.

Capturing the Lead

If you are going to be successful in capturing a lead, you need to understand the mindset of the buyer or seller. They aren’t the least bit interested in you, or how you are doing. Instead, they are entirely interested in Whats in it for Them. Most buyers and sellers start by looking for information, they then think about service, and lastly, about the actual transaction. Obviously, if you are going to get your fair share of the last one, then you are going to need to focus on the two preceeding steps.

So, when you receive a call from somone looking for information, the first words out of your mouth should be, “Thanks for calling. My name is Trent. May I ask who’s calling?”, quickly followed by, “and what is the best number to reach you at?” The reality is that if they are calling to ask you for information, you have every right to ask who “they” are and how you can reach them back in the event that you actually find the information they are looking for.

Another tactic would be to stop carrying cards and instead, each time you are asked for one, you simply pull out a pad and pen and say, “I’ve just handed out my last one, give my your name and address and I’ll be sure to get one to you”. Simple and straight to the point works every time.

The same approach should be applied to your marketing. I have a website that allows a visitor to receive any number of free reports. To get one, all they have to do is to provide their contact information. The same could be done with a guest log at any open house.

No matter what they activity you choose to pursue, make sure you capture the lead!

Up next, how to connect!

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This week will see me training some new Realtors on short sales, and even more exciting than that, I’m hoping that the doc gives me the green light to start walking again. After seven weeks of not being able to walk, it is amazing how exciting the prospect of walking again, is! (for those that missed it, I broke BOTH ankles in a crash on my dirt bike on Sept 5th).

In between times, I’ll be spending time with my girlfriend East (who is also getting into short sales), reading my lastest book, Jump Point, and trying to improve my lead guitar skills in the XBox game, Rock Band 2.

Homes About to Get Much Cheaper

By Les Christie, CNNMoney.com staff writer
October 20, 2009: 09:43 AM EDT

If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.

Mark Zandi, chief economist with Moody’s Economy.com, agreed with Fiserv’s current assessments. “I think more price declines are coming because the foreclosure crisis is not over,” he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June — after having already fallen a whopping 48% during the past three years.

If Fiserv’s forecast holds, Miami real median home price will tumble to $142,000 by June 2011.

In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they’re expected to fall 26.8% and then flatten out.

Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.

Prices had stabilized

The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.

Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however.

“I’m afraid Case-Shiller may be just a temporary reprieve,” he said.

He pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors. But the market assistance ends when the credit expires on Dec. 1.

Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.

Winners

A handful of metro areas will buck the trend, according to Fiserv. Six markets will remain flat, and 33 will actually post gains. The biggest winner will be the Kennewick, Wash., metro area, where home prices have ramped up 8.9% over the past three years and are expected to increase another 3.4% by June 2010.

Fairbanks, Alaska, prices are anticipated to rise 2.5%, while Anchorage will climb 2.1%. Elmira, N.Y., prices may inch up 1.8%.

The nation’s biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.

Home values in the nation’s second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. Chicago prices, which have fallen 25.2% to $227,000, will drop only 4.1% over the next 12 months and then starting to climb.

The Detroit metro area now has the dubious distinction of having the lowest home prices in the country. Prices have dropped 51.7% to a median of $50,000. They’re expected to fall another 9.1% and then stabilize.

The Science of Lead Generation – Part 3

This post is the third in a series on the science of lead generation in the real estate business. You can read Part 1 here and Part 2 here.

Now that you have figured out what message to send and the most feasible method(s) for getting that message out, the only thing left to do is to take action and start generating leads. And, while this sounds simple enough, I must risk the obvious and state that if you are going to be a successful agent or investor, you must actually start generating leads!

The reason the most people fail at lead generation is because they “take a stab” at it. In other words, they try some of this and some of that; all the while pinching each penny to death. The net result of this half-assed approach is, well….nothing. You may get a few leads, but this inconsistent approach is not going to give your the waterfall of leads you’re going to need to really light your business up.

To be successful at selling anything, you need a lot of leads. To get a lot of leads, you are going to need to do a lot of lead generating. You must do it for several hours every day. You must do it every day, day in, and day out, for the rest of your career. You cannot wimp out or give up. Got it?

They key to all of this is to develop a belief that dealing with business never takes priority over finding new business. Never, ever. To do this, you will need to have the discipline to prioritize lead generation over everything else, every day. Its may sound simple, but trust me, it ain’t. If you lack this discipline, you will always be an average producer.

So, how does one develop this discipline? Simple, you block time for lead generation. In other words, you literally put it into your schedule and you do not deviate from it. For me, that means first thing in the morning. For you, it might be something different. It really doesn’t matter, so long as you do it. I would suggest that 3 hours is the minimum daily investment you need to make into lead generation.

Back when I was a stockbroker, I set aside the first 3 hours of every day for prospecting. I hated prospecting, but I liked money, so I was able to force myself to do it. The net result was that I brought in more new clients than 97% of my class-mates.

For each three hours of blocked time, I would suggest that you devote the first 30 minutes or so to preparation, the middle two hours to executing what you’d planned, and the final 30 minutes to follow up activities associated with the leads you found that day.

If you did nothing else but follow this simply daily ritual, you’ll be ahead of 97% of the agents in your office.

In my next post, we’ll talk about how to keep track of your lead generation activities and how to determine which ones need more focus.

Your comments are always welcome,

Trent Dyrsmid

PS. As an investor, I like to buy and flip short sales. When you work with me on a deal, you will earn 6-9% per deal and my negotiator will do all the heavy lifting. Plus, it doesn’t matter if you’ve never done a short sale before, as I will teach you how. To learn more, check out this video.

The Science of Lead Generation – Part 2

In my last post, The Science of Lead Generation – Part 1, I left off talking about the importance of having the right message, directed to the right people, at the right time.

In this post, I’m going to continue that thread by talking about the method you choose to get your message out. At the high level, their are two main categories of methods; prospecting and marketing. With prospecting, you must exert effort to go get the leads, and with marketing, you exert effort to get the leads to come find you. Personally, I don’t much care for the former, and as such, focus all my energies on the latter. With that said, I would suggest to you that you should focus on both, so as not to put all you eggs in one basket. As well, if you don’t have the funds available to cover the cost of marketing, you are going to need to prospect until you’ve closed enough deals to cover this cost.

Speaking of which, please allow me to divert for just a second. If you are a Realtor, you are in business, and that means that all your income is not your to spend freely. If you are not consistently reinvesting some fixed percentage of that income on marketing systems, you are just shooting yourself in the foot. If that is the case, wise up!

Ok, venting now complete. Lets get back to the point of the post

As I alluded to earlier, with prospecting, you go looking for leads, and that is usually done via telemarketing or face-to-face. With marketing, on the other hand, there is a long list of activities in which you could partake. Some exampes are:

• Advertising (print media, radio, online, billboards, bandit signs, bus stop benches, TV, etc…)
• Promotional Items (fridge magnet, calendar, pens, etc…)
• Websites
• Direct Mail (postcards, just sold/listed cards, special event cards, market update cards, etc…)
• Broadcast (voice, email, fax)
• Signs, brochures boxes, etc..
• Branded Cars, clothing, badges, etc…
• News releases
• Advice columns
• Blogging
• Farming
• Sponsorship

Learn how to double your short sale commissions. Click here for more.

Obviously, not everyone is going to do everything on this list! However, I believe that some items on the list should be done by everyone. As an investor, my activities include:

• Vehicle wrap (directs traffic to website and 24 hour recorded message)
• Website (more than one)
• Direct mail (postcards and letter)
• Blogging
• Email
• Farming

The point I’m trying to make here is that you need to test which methods work best for you in your market. Don’t just guess!

In my next post, I’m going to talk to you about how to ramp it up and get the leads flowing.

Your comments are always welcome,
Trent Dyrsmid

PS. As an investor, I like to buy and flip short sales. When you work with me on a deal, you will earn 6-9% per deal and my negotiator will do all the heavy lifting. Plus, it doesn’t matter if you’ve never done a short sale before, as I will teach you how. To learn more, check out this video.

The Science of Lead Generation – Part 1

We’ve all heard the phrase, “nothing happens until a sale is made”, right?

Well, guess what. No sales happen without leads!!

When you chose to become a Realtor, or any sales professional for that matter, you also chose to become an expert in lead generation, because, without a steady stream of qualified leads, you are going to starve.

As a full-time investor, I no different than you. Without qualified seller and investor leads, I’m out of business.

Step One: Stop Doing What Isn’t Working

In today’s market, the trick is to understand which lead generation activities are going to yield you the best bang for your buck. To do that, I’d suggest that you start with the following exercise. Write down the top ten sources of your leads. The reason for this is that you need to discover where your leads come from (obviously, this will not be the same for everybody). Next, make a note of how many deals that lead has brought you. And finally prioritize them from 1-10 with 1 being the most effective, and 10 being the least. Now take the bottom five and stop wasting your time and money on them.

For example:

1. Direct mail (25)
2. Expired Listings (15)
3. Newsletter (9)
4. Calls to Sphere of Influence (9)
5. Website (8)
6. Open houses (6)
7. Sign calls (4)
   
8. Client parties (3)
   
9. FSBOs (2)
   
10. Agent referrals (2)

There is one exception to this however, and that is any activity that helps you to build your long-term brand and/or reputation. Writing a newsletter of articles for article websites and blogs is one such example. This activity may not yield immediate results, however, consistent execution over a period of years will position you as an expert in your field, and as such, it should remain as a key component of your marketing mix. (As a side note, if you aren’t regularely writing, what are you doing to position yourself as an authority?)

Step Two: Figure Out What Works Now

Now that you understand which lead generation activities have been working best for you, its time to build an effective lead generation program that will work in any market. The key to doing this is to understand the difference between the Message and the Method.

Your Message is critical because if you are using the wrong message, your response rate will be horrible. What do I mean? Consider that as the market changes, the motivation of your buyers and sellers is going to change as well. Speak to the wrong motivation, and you’re a dead duck.

For example, in today’s market, distressed properties make up the vast majority of all listings in Southern California. As affordability is at an all time high, there are also a large number of first time buyers. What that means is that to procure listings, your message is going to have to address the needs of a seller in distress, and to attract buyers, your message is going to need to speak to the needs of a first-time buyer.

The key to understanding messaging is that it is built on the idea that people will contact you if there is something of benefit to them. Get the right message and your phone will ring off the hook. As an example of this, I did a postcard mailing on Wednesday this week, and on Friday, I received 17 calls from sellers (this was a 4% response rate). What was my message? “I have cash, and for the right deal, I could pay full price.” Did that mean I was going to pay full price and pay all cash? No. It meant that I could pay all cash or for a deal with the right terms, I would pay top dollar.

Another key to your message is that it must contain an offer. The statement above was the offer that cause my prospects to respond to my marketing. Be sure not to forget this!

Once you have figured out what messaging is needed, you must address the method you are going to use to get the message out to your market, and we’ll cover that in Part 2.

Your comments are always welcome,
Trent Dyrsmid

PS. As an investor, I like to buy and flip short sales. When you work with me on a deal, you will earn 6-9% per deal and my negotiator will do all the heavy lifting. Plus, it doesn’t matter if you’ve never done a short sale before, as I will teach you how. To learn more, check out this video.