Real Estate Agent Marketing
The following is an excerpt from a two hour training called “How To Market Your Real Estate Agent Business” (a free download):
Jassen: This is Jassen Bowman and I’m joined tonight by the six figure lead generation guru himself Mr. James Orr. How are you?
James: I’m doing great, thanks for having me on the line. Is that my new moniker?
Jassen: I believe it is. I’ve seen that kind of tossed around a little bit.
James: That’s interesting.
Jassen: Because, well, because of the whole thing about the techniques that you’ve used multiple times to build six figure businesses where the business was you getting paid to do lead generation for your primary business. In, in… People, I think, in general love that concept of getting paid to do their lead generation rather than have their lead generation be an expense, so I don’t know if we’re actually going to get into that particularly tonight, but I think we’ll have room to talk a little about it, but…
James: Yeah, that’s a really popular subject apparently, the idea of making money when you’re generating prospects for your business.
Jassen: Yeah, well, I think the big thing is that one, nobody else is really teaching that these days, but who wouldn’t want to get paid to do their lead generation?
James: Well, teaching that these days do you know anyone who’s ever taught that?
Jassen: You know I really don’t. Yeah, I can’t think of anybody.
James: I can’t think of anyone either otherwise I would have bought their course because it’s such a good idea.
Jassen: That’s a good point. So, the old saying about “There’s no such things as new ideas in marketing” maybe that’s all true.
James: Or, maybe people just decided they weren’t going to write a book about it because, or write a course about it because it was such a good idea they’re just going to keep it for themselves. It could be one of those rare instances where somebody has such a good idea that they really are not going to sell information about it.
Jassen: And, you know what? You and I both know that there are such things out there that are some trade secrets. Tonight, however, we’re going to be talking about some ways that people can use to market their real estate agent business. So, our Webinar tonight is specifically about these kind of marketing secrets that we’re talking about specifically geared towards real estate agents. And, I’m thrilled to be on this call with you tonight because as a former real estate agent myself and yourself as well this is something that we can definitely talk for hours and hours and hours about I’m sure.
James: Absolutely, I’ve done this business model more than one time. I mean, the original time I did it, it was more of a retail, residential property model. The second time I did it I focused mostly, I niched down and focused mostly on investors and I generate two different businesses. The first business we were generating well over a hundred new inquiries a day for buyers and sellers interested in having us work with them in the capacity of real estate agent and then the investor side it was a bit fewer on the number side, but they were multiple hit, multiple purchase, multiple sales type guys because investors typically do more than one deal per year. So, very interesting numbers.
Jassen: I would agree and being numbers people both of us we will, I think be sharing some numbers tonight, but let’s start with number one which is actually two things. The two major marketing focuses for building a real-estate agent business. So, there are two distinct ways of, at the core of looking, at how you’re marketing, right?
James: I agree and really what it comes down to is you want to build up an internal list, your in-house mailing list of people that know, like and trust you, want to do business with you and then all the other marketing you’re doing is really to build that internal list. Real-estate agents, the first time I heard the term, you know, farming, where you’re selecting a very specific criteria whether it’s geographic forming or if it’s farming to a certain group of people, but then you’re constantly contacting them over a period of time so that when they do have a house in need whether they are looking to buy or sell a house or refer you to someone who’s looking to buy or sell a house then they can start contacting you. You’re top of mind awareness for them and then you are, you have a really good chance of being the person that they decide to call when that happens. Then all the other marketing you’re doing is to generate people onto that list and to find people who happen to be in the market to buy or sell a house and they do not have someone who’s farming to them and has captured that top of mind awareness.
Jassen: Did you realize that only 4% of real-estate agents actually have any kind of regular contacts system to market their internal list?
James: No, honestly I’m surprised it’s that high. Where did you get that number from?
Jassen: That number is from Craig Proctor. He teaches a lot of marketing systems to real-estate agents and that is a staff that he has assembled from his decade plus of working with, you know, thousands of real-estate agents across the country.
James: Yeah, I’m surprised it’s that high, actually.
Jassen: Well, you know, that 4% represents people that are coming to his seminars and purchasing his courses and so that’s probably skewed because the people that are going to, you know, be listening to a Webinar, like what we’re doing tonight or going to a seminar of his or something like that they’re probably more inclined to be doing this kind of stuff anyway. So, I’ll bet you that number is skewed.
James: I would think it is. You know, if we could end the call here because it’s over and if you really do go and keep an internal database and you market your database over and over again you get your database to a certain size and that’s all you need to do.
Jassen: Right.
James: However, you’re going to talk about a lot of other strategies tonight and I will talk about a lot of other strategies that I have that we use for that, but you know, we have a list of about 32,000, I think it’s even a little bit bigger than that now, 32,000 real-estate investor clients who inquired about buying or selling properties with us over the years and you get to a point where your database is large enough and you don’t need to do anything else.
Jassen: Exactly. Well, especially when you’re looking at, you know, we’ll specifically look at residential real-estate sales, you know, the average American family moves every what five to seven years, I think the stat is and so if you look at, just do a breakdown of, okay you have your income goal, look at the average home price in your community and then out of that your average commission and it’s easy to calculate how big of a list you need base on how often people on average move, you know, as their family needs change. So, if you’re a real-estate agent listening to this and you don’t have some way of marketing to a house list literally that’s the first thing you need to do when you get off this call is set that up.
James: Yeah, I would agree and if you didn’t understand what Jassen just said about walking through that math. It’s really easy to do, you know, go talk to your managing broker or you know, whoever is in charge of your office, I hope that’s not you if you don’t know this, but if you go talk to them they should be able to walk you through that whole number scenario, you know, if it’s a $100,000 house and you’ve got a $3,000.00 dollar commission you’re split each time that happens and, you know, how many transactions do you need in order to close that? Okay, how many people per year typically move from your list, well, let’s say it’s 1/5. If everyone moves every five years, you can work back and figure out exactly the size list you need to be marketing to every single month or every couple of weeks or whatever it is you’re going to do in order to be top of mind awareness and have a good shot at doing those number of transactions based on your list size.
Jassen: Exactly. Actually, really quick, do you want to run through an actual example of that?
James: Sure. You want me to?
Jassen: Well, I was going to do that if you wanted me to.
James: Yeah, if you want to do it I would absolutely love it, yeah.
Jassen: Okay. Let’s say that you’re… By the way this comes down to market, knowledge and what not things that we’re not really going to delve into on this particular Webinar, but you can get this information from your managing broker, from your MLS, you know, the data is available, so utilize it. For the sake of argument let’s say the average home price that you just said is $100,000 in your community and lets say that you are average commission per side is 3%, I think that’s fairly standard still across the country, in most places so, on every transaction your commission $3,000 and so, we’re going to look at GCI, gross commission income, which is, you know, before your brokerage fees and splits and whatnot come out.
So, let’s say you want to make $100,000 a year in gross commission income. Well, you already know that your average transaction is a gross commission income of $3,000, so you take the 100 divide it by the 3 you end up, you need to do 33 sides per year. Let’s just round it up and call it 35. So, if you do 35 sides, you know, either as the buyer side or the seller side per year then your gross commission income will be approximately $100,000. So, if you also look at the data and discover that 1/5 of that people in your community move every year and that’s just kind of a national average, so if they move every five years that means 1/5 move every year. So, your list size then needs to be 5 times greater than the number of sides you need to do per year. So, in this case you would need 175 people on your house list that you are creating a relationship with so that when it comes time for them to buy or sell a house the only logical conclusion for them to come to in terms of the real-estate agent to use is you. So, 175 people, is that…
James: Yeah, well I think that, well it’s interesting you should use those numbers because I think that you left out some things that I would have been a little bit more conservative with if I would have done it. For instance, I would have included a commission split with my broker, so instead of using $3,000 I would have used, you know, probably $2,000 or $1,500…
Jassen: Okay.
James: …and then I would have also put in some type of ratio for ‘x’ number of people on my list, but only a certain percentage of those are actually going to do transactions with me. So, you know, just to kind of add in those fudge factors why don’t we…
Jassen: Yeah.
James: …multiply it by 3 in order to kind of get a number that’s a little bit more reasonable and that’s still only what like…
Jassen: Yeah, if you’ve got a 50/50, yeah 50/50 split with a broker is not uncommon not everybody’s going to do business with you, yeah, you’re right. So, you can multiply it by 3 and it’s I mean, 500 and 1/4 people.
James: Let’s squint really hard and call it 600. So, you need to actually put 600 people on your mailing list. I mean I’m all for being more conservative and if you have a little bit better year you’re going to have expenses with your mailing and stuff like that so, in order to really net a hundred then you’re going to have stuff in there. So, you know, if you really think that that’s the case okay great so you crank it up to 600 people on your list, you know you need to maybe do 50 transactions in order to get to that number and fifty transactions is like one a week. So, that’s definitely doable, it’s realistic…
Jassen: Yeah.
James: …and you can work toward that and then you bring in staff, you bring in admin if you need help with additional things whether it’s licensed admen’s or unlicensed admen’s to do just the, you know, more general office maintenance paperwork type stuff.
Jassen: Right and I mean you realize most real-estate agents can’t fathom doing one closing a week.
James: No, they can’t fathom those. It’s too much. Well one a month is probably better than the national average.
Jassen: Yeah.
James: Wasn’t there a stat you told me once where like the average commission for a real-estate agent was like less than $20,000 a year or something like that?
Jassen: Something like that, but I believe, and this was probably from the National Association of Realtors study, this is probably from a couple of years ago, but I believe it was $17,000 a year was the average income of real-estate agents across the country and that being the average that means you’ve got high performers, you know, making hundreds of thousands if not millions of dollars a year and then you’ve got other people that are making one or none. You know, in terms of sides that they’re representing.
James: Yeah, they’re doing, you know, the friends and family thing, you know, occasionally one there six closest friends is going to buy or sell a house and they do one transaction a year or something like that.
Jassen: Right,
James: Yeah, let’s get into the marketing side of this because I mean the, if you don’t have a database you need to go make one and that is really a key to this model because you want to be able to stop marketing at some point or at least significantly cut back on your marketing because there’s nothing more expensive than doing new lead generation. Even though I can actually make it profitable it’s still a pain in the butt in order to do. I would much rather just mail out to my in house list.
Jassen: Exactly. I wanted to run through this math because I want folks to have an idea of what kind of numbers we’re actually talking about in terms of their list as we go through the rest of our presentation here tonight because real-estate is a business where the returns are fairly high and so because of that you can provide greater, obviously greater quality of service to a smaller group of people and you don’t need as big of a list to make a really good living.
James: That’s correct.
Until my next post,
James
P.S. You may also be interested in “The World’s Greatest Real Estate Agent Marketing Course”.
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