As Real Estate Brokerages are reporting record numbers for Q3...how you can finish strong and have a personal best in 2021!
Today, today, today, record numbers have been posted for real estate brokerages companies for Q3. Like, it just seemed like it was coming out like Q3 earnings are way bigger, way bigger, way bigger than I anticipated. So, it is out there. So today, how you can finish this year strong carrying some of this momentum and going into 2021, just rolling right into it and making sure that next year is your personal best year ever, setting your own records.
Yeah. So what we're going to talk about specifically is the goal and how to set these goals, for those of you who have not set those goals yet, I can tell you, after this, I have a presentation with a very successful mega team. They are going through their 2021 goal setting vision and strategy right now. So this is the time to do it.
So we'll put together some numbers, which are never very exciting, but the thing that is so important about that is as you're planning if you do this right and you start to build that database, what happens is as you're continuing to impress upon those people, you're putting an idea in their head. And I was watching a movie the other day, and it said the hardest thing to kill is an idea. And I was like, "Oh, man, I love that." Because it's impossible to really kill an idea.
So what's the idea that we want to put into our customers' heads? And it's just easier than ever to do it. One of the things in our meeting prior to this, I was telling somebody on our team to watch "Social Dilemma," because it's just so easy to put ideas into people's heads today. It's so much so that I think that that's going to be licensed in the future.
And so we want to talk about you putting ideas into your community's head about why they'd be crazy to not use you and tie that basically to the goal and how to mathematically reverse engineer those numbers so that you can start 2021 with a significant plan.
With anything, you can do only a few things to increase the amount of money that you're making when you're in sales. And like with real estate, how many appointments do you have? You can increase that, or you can increase the conversion of your appointments.
And again, this is always so hard for me, because most people that I've talked to don't even know their numbers, so the first place to start always is make sure that you're tracking exactly what your numbers are so you know how to because otherwise, you're failing to plan, which is planning to fail because you can't make a plan without having real data to be able to execute essentially, right?
So what's the math look like in order for me to bang out whatever I normally do? I love being able to multiply myself through others. And I love being able to have some semblance of mathematics, certainly when I'm spending money, as to how I'm going to get it back. If somebody wants to do, let's say additional 36 transactions next year in addition to what it is that they're doing currently. And they wanted to do it from digital marketing, that's a real easy equation for us. They would need to make sure that they have a hundred leads. We say a one to 3% conversion rate, and if you aren't getting the conversion rate that you want, that's a place to optimize without spending an extra dollar.
I think today too many agents just throw money at the problem. And they throw it randomly like flailing around in a fight. Do you know what I mean? Like, "I'm going to throw it over here. Oh, that's not working. I'll throw it over, that's not working. Oh crap, my closing didn't go through, I'm going to pull back on this." They're not tracking or watching any of it. And that's not being a good business person, honestly. I can't say it in a nicer way. You are going to constantly be, as I watched a speech given the other day, in pain if that's the way you run your business.
So a hundred leads. What we tell everyone is a one to 3% conversion ratio. So that should translate into one, two, three transactions. Now, that doesn't happen the first month. You might need three to six months of generating a hundred leads per month in order for this to start to normalize. But let's just go with the worst-case scenario. Let's just say it's one. With those numbers, our average Cost per Lead is $4. So this should cost roughly $400 in pay-per-click loan, right? So you get one transaction, the average commission is roughly eight grand.
Let's say that you get this down, this means that your customer acquisition cost is essentially 400 bucks, go spend 400 bucks to get another transaction. So, I know we need to go into the number of calls that need to be made, the number of appointments that need to be set, the conversion rate of those appointments. But essentially, those are all leading indicators to get to this one lagging indicator, which is the transaction.
So, if you want to do three, you've got two choices here. You can either improve your conversion rate of those hundred leads and not spend another dollar, which I would highly recommend doing regardless. Or you can triple the budget. You spend 1,200 bucks. If you spend 1,200 bucks, you're getting 32,000 in, if that's your average commission amount on a buy-side transaction.
So, as far as a specific goal, I would start with the dollar amount first, because that's how my mind always thinks. That's how they've trained us to think. So what's the dollar amount you want to make next year? And one of the things, when we talk to people, is that. "What's your goal for next year? How do you want to get there?" And we try to create this plan and reverse engineer the plan for them.
There's a lot of steps along the way. What we found is that in order to convert these leads, you've got to make eight to 12 attempts per lead, and so Market Maker does take care of that part for you, and what we're delivering as an end finished product is the appointment.
So what we're looking at is essentially out of the amount of lead, let's just keep it at a hundred, so out of a hundred, let's say we got 12 to 25 appointments. And then out of those, we're looking at a 50% show rate. And so let's say that's a six to 12 and a half.
Now here's the cool thing. The cool thing is doing it this way, it shouldn't net you the same effect as making all those phone calls yourself. Because all you're trying to do is get to that one to three regardless. And I know we're getting into the weeds here, but six to 12 and a half, and those were the ones that show, and from those you're looking for one to three real customers that you can complete a transaction with, people who are ready, willing, and able that have indicated their timing and motivation, that have agreed to meet with you so you can go sell them a home.
And you know, what's fascinating too, is with kind of how we do things for our clients, one of the biggest grinds and hardest things to do is like attitude is everything in conversion. So I can have the exact same script and I can deliver it one way and sound very disinterested and expect you to be not interested, too, and just be to check the box. And it's not going to go very well.
Versus the person that's super excited. Now, when you don't have to get kicked in the teeth to find the few that actually do want to talk to you and make all the calls that don't respond and answer. When you're the one responsible to get it from a hundred to that 12 or 15 people that actually even wanted to schedule something to talk to you, its much easier to be that super excited person.
Get the failure over with quickly was always my paradigm. "If you ain't going to be my customer, then let me get out of the way so I can get to the next one who might be." You know what I'm saying? That was my attitude. And my other attitude, which I've said this before, I'll say it a million times, is essentially they've contacted me. I don't care if they've filled out a form on our website or if they sent me an email, they sent me a telegram.
And especially with our platform, because what we're essentially doing for the customer is connecting them with the home purchaser who has agreed to talk to them. And we know that buying a home is a process, not an event. So the ones that are further along down the process are going to be more willing to talk to an agent. If they're willing to get on the phone with an agent, it's a good lead. Especially since they know that they're getting on the phone with an agent, because they set the dang appointment to get on the phone with the agent. It's just like our platform, when somebody sets the appointment with us, they know why they're coming. They ain't coming to play checkers, coming to check it out. You know what I mean? They're coming to see if it's something they should buy.
And it's the same with these systems, especially our system where we deliver a pre-positioned appointment because they're coming to talk to you about purchasing real estate. And I think that that gets lost a lot of times. If they don't have a specific house. I think too often, real estates like to think of themselves as like a perfume clerk. "Which perfume? Oh, you wanted to smell this one?" You know what I mean? They can't create interest in the perfume without the person already has an interest in the perfume.
Yes. And the coolest part of figuring things out mathematically is you know where to focus when something goes wrong, as long as you're tracking it the right way. That is probably the most powerful thing that we have in being able to decide what our company does and what we focus on every day, so we're not just running around doing a bunch of work and then getting into the end of the month being like, "Okay, I hope that worked." We are focused on the right things because we essentially have a very complex dashboard that could be way more complex, but we have it down to the few gauges that we actually know we need to look at every single day and be like, "Oh, gas is low. We need to get gas."
Let's say if your goal is in the quarter-million dollars in commissions at least. So, let's reverse engineer that number backward:
250,000 in Commission / 8,000 in Commission = 32 Transactions
32 Transactions / 12 Months = 2.6 Transactions per Month
3 Transactions (rounded up) / 1% Conversion Rate = 300 Leads
300 Leads * $4 Cost per Lead = $1,200 Marketing Budget per Month
$1,200 Marketing per Month * 12 = $14,400 Marketing Budget per Year
In one year, spend $14,400 in marketing, and make $250,000 in commissions
If you don't have the math, let us help you get some math, we'll help you with that for free. And of course, if you're not setting your goals right now, you should be. You shouldn't wait until, honestly, no later than this month, November, to get this done, and you should have a plan that is actually quantifiable and implementable that you can test and make sure you're staying on track the whole time.
I would venture to say that closing, like what we talked about last week of you've got to start now if you want to make sure that you're off to a good start next year. And going back to the topic of this, companies are posting record numbers for Q3, we've been in some really hot times, and this is the record for quarters. You know what I mean? Insane numbers. So, you can utilize that momentum and gather people, because the people that you're getting now, I would venture to say that if my goal was selling a hundred homes in 2021, then whatever my budget needed to be, reverse engineering that. Let's say it was one a month, eight deals a month, so my budget was $8,000 a month to get a hundred deals. Right?
It'd be worth it. You've spent a hundred to make 800.
Yeah, absolutely. Sign me up all day. But I would venture to say that you would probably try to spend that eight grand a month starting November to November to be able to close in 2021. It's like the fiscal year versus the actual calendar year on what your budget spent because I talked to somebody yesterday and she was like, "Well, I just need to really get things going because I need to get a few closings in before the end of the year." And I was like, "Aw, man. We're like probably two months too late on being able to really make sure that you're there." Because if got to get something right now for next month to close, you know what I mean? And I think so many people stay in that … that's how you get in that roller coaster of just staying in that up and down, up and down, up and down, when it's just right now, right now, right now, right now, versus looking at the universal picture.
So, let's say that this is your plan for 2021 and then something adverse happens. Something adversely impacts your business that you didn't anticipate. We're going to be looking at the numbers. Did my conversion rate drop? Did my cost per lead go up? Did my appointments slow down? What is the bottleneck? Because those are the things that you can control. You can't necessarily control the other things. And as far as real estate is concerned, like I always say, the beauty of it is everybody has to live somewhere. Real estate is not going away. A car could arguably go away. We could have space shuttles, we could have flying drones, they could 86 the internal combustion engine, but a house is not going away. We're always going to need shelter and the earth upon which it sits.
So, for me, just always recognizing that fact, no matter what, real estate is always going to be here, which means no matter what, you're always going to have a solution to whatever the challenge is in your business. And failing to plan is planning to fail. You can't see everything coming, but if you've got a plan, as you're going through and implementing the plan, you can make those tweaks accordingly in order to make sure that you're facilitating, you're staying as close to on track as possible.
And that's just good business. Like I said before, we practice what we preach. We do the same thing here. When we've got a problem, we're like, "Where's the problem?" "Okay. Well, this happened." "All right, well, conversion rate went down," or "Oh, this happened." "Well, the conversion of sales has gone down. Okay, well, let's see what we need to do to improve that." I mean, it's the only way, if you're going to have a business, to really run it.
All right, cool. Well, listen, if you guys want some help with this stuff, that's what we do here at Market Maker. Go to marketmakercall.com, watch a short video I made for you on how we generate leads, nurture those leads in a way that elevates your status and authority in the mind of those leads, and then ultimately delivers them to your calendar as a pre-positioned appointment. And if you don't know what a pre-positioned appointment is, definitely reach out so we can teach you.
I love it. So as we always say at Market Maker, you are always one pre-positioned appointment away.
Every day. Go get it.