If you’ve read Grant Cardone’s bang-up business book The 10X Rule, then you know that the premise of the book is that people VASTLY underestimate the amount of effort that needs to be expended in order to achieve life-changing types of goals. That general principle is alive and well in the world of cold calling and I have to admit that I’ve been guilty of it.
My real estate goal is to take 52 listings per year and close them all. Any buyer business that comes out of that is just “gravy money” on top. Since employing the Fearless Agent Listing and Pricing Presentations, I have never NOT sold a listing that I’ve taken on – as long as the seller didn’t decide to buck the process after we got started. So targeting a close-to-100% list-to-sell ratio is not unreasonable.
But how many contacts per day do I need to make
in order to achieve my BIG Goal?
Well for the past few years now I’ve been running those types of calculations through my head. You know…in the morning while making coffee and stuff. Over time I’ve realized that a lot of variables go into all that. Things such as how many days per month you’re calling, how many contacts you need to make in order to get a lead, and how many leads (when properly followed up with) will translate into a signed listing contract.
So today I created a quick-n-dirty tool that gives some perspective on all that. It’s a simple Excel file that you can download here. I even created a video you can find further down below that explains how to use it.
All you need to do is plug in numbers in the GREEN boxes and everything else will calculate out for you. One green box in particular needs to be explained and that’s that one called Est. Lead-to-Listing Rate. Make sure that you account for ALL the stuff that’s likely to happen which results in the various people that make up your pool of leads choosing to NOT list with you. These things include:
- Leads You Lose in Your CRM
- Leads that start screening your phone calls and give you the fade out
- Leads that choose to list with another agent instead of you
- Leads the straight-up change their mind
- Leads that were not good leads in the first place because they lacked motivation but you COUNTED them as leads
- …and most important….
- Leads that let you stop by their house for a listing appointment but do NOT list with you
Proper Prior Planning Prevents…
Have you ever heard of “The Power of Negative Thinking“? It’s not talked about much in real estate circles because everyone is so focused on being positive and “attracting good and not bad” into their business lives and stuff. Most businesses don’t run that way though and the most BASIC of business courses you could ever take (high school level business courses) will tell you that startups need to be built around “worst case scenarios”.
For example. Two super-smarties want to start up WidgetCo so they can sell their new-fangled widgets to the people of the world. And make money. Yeah – that too.
So they start laying out their business plan. They THINK they can sell each of their widgets for $45. IF they can sell their widgets at $45 then things are going to be GREAT. But that’s a BIG “If”. They KNOW, that the market might not care about their estimates. The market might not BUY the widgets at $45. Maybe they can only get them sold at a price point of $35. If that happens, can the company make a profit? What if they can only sell at $25? Can the company survive if they have to sell at that price point?
Planning for the worst. Worst-case-scenario. All smart businesses do it. They don’t “assume that things are going to turn out even BETTER than they’d ever hoped”. Because it just doesn’t seem to go that way in the real world.
That being the case, I suggest you be VERY careful with the Est. Lead-to-Listing Rate. I’m keeping mine at 10%. If it ends up higher, if I end up extracting a greater percentage of listings out of my lead pool this year, well that will be good for me. But it’s highly unlikely that the result will be LESS than 10%. So I’m going with that.
The video below shows how to use the tool itself. Take a look and then be sure to read my final thoughts found below the video.
So again, if you want to download the Excel spreadsheet for this…you can find it here.
Remember the 10x Rule I mentioned at first? Remember how the central idea in that book is that we underestimate the effort needed to achieve our goals? Well this little tool made so very clear how true that is for me.
With a target of taking 52 listings per year, and assuming that I’ll only sign 10% of the leads I connect with to listing contracts, and also assuming that I’ll only consistently call 22 days per month over the course of the year, and also assuming that my historical average of getting 1 lead for every 100 contacts (on average) – well that means…
I need to be contacting 197 people per DAY!
That’s a LOT more than I’ve been contacting. It’s DOUBLE the daily quota I originally set for myself. It’s already the 7th of January. For the first 7 days of the year I’ve been only even been TRYING to contact HALF the number of people per day that I need to in order to be confident that I can achieve my goal for this year!
This little calculator shocked me. I’m guessing that if you run it yourself it might shock you. It re-emphasizes in my mind that Lucky Luciano was right. We cold calling real estate agents need to be thinking in MULTIPLES of 100 contacts per day. We need to get ourselves over our own mental roadblocks about running six phone lines through two dialers. We need to be mentally accepting the additional cost that additional dialers, phone lines, and headsets are going to incur.
We need to just accept it all and DO WHATEVER IT TAKES to get that 10X level of action up and running NOW.
So for me…the new minimum number of contacts per day is 200. Boom.
Recently, I came across this question by Chad Hooper in the Google Plus Mojo Mastermind Group forum:
Now I’ve given serious thought to this over time and as I’ve used both Cole data and Mojo Lead Store data so I started typing out a response which turned into this blog post. So here’s my thoughts on this…
When cold calling with Cole Realty’s landline data (not cell phone data) I get about a 20% pickup rate during a weekday morning calling session. That compared to the 18% I got with the Mojo Lead Store Data. So a bump…but not night-n-day difference.
That’s not to say I’ve NEVER used Cole’s cell phone data. I have. I’ve used it to hunt down expired and FSBOs who didn’t put their phone number on their Zillow listing. It worked pretty well and had the data north of 65% of the time. I can’t remember if you can do a map search and import cell phone numbers in bulk for whole neighborhood or not. I never did it though and can’t speak on how effective it could be.
What’s The REAL Problem That We’re Trying To Solve Here?
The only reason people want “better data” is so that they can increase their contacts per hour. The theory is that with better data you’ll have less bad numbers and when you’re dialing good numbers (vs disconnected numbers) that will translate into a higher contact rate…because the dialer won’t have to sort through as many bad numbers. So greater efficiency. If up the ante even more and call cell phone numbers, then you’re increase the chance of getting through to people because they always have their cell phones on them at all times while they are NOT close to their landline phone at all times. So again, greater efficiency.
The problem with this line of thought is that it makes a terrible assumption. That assumption is that the biggest obstacle keeping you from talking with more people is bad phone numbers followed closely by people’s proximity to their phones. This false assumption allows people to create a corresponding false belief: namely that as long as you’re dialing the “best” numbers…then you’ll contact more people.
This just isn’t true.
The BIGGEST obstacle to you talking with more people – hands down – is…Individual Phone Screening Behavior
People not picking up the phone when they don’t recognize the phone number. Ignoring you. Sending you to voicemail.
As I am typing this out right now I am calling through a raw list in Canton Michigan that I got from Cole. You know what keeps happening? I get answering machine after answering machine after answering machine. That tells me that the phone numbers (the data) is GREAT. Because I’m connecting through. Also, because it’s 10:30am just a couple days before Christmas, that means that I’m calling, not at the best hours of the day, but during descent hours AND a bunch of people should be off work and home to answer the phone when they normally be available to take my call simply because they took some vacation days for Christmas. So I should be seeing a higher contact rate. But I doubt if I”ll see it get over 20%. This image here shows where I stand right now as I type this:
That’s right. Less than 8%. Terrible. All of those 33 “No Contacts” you see there are answering machines that I clicked away from when I heard them.
So think about it. A LOT of those “No Contact” answering machines were from people that were home, didn’t recognize the number, and just let it go to voicemail. You’re going to experience that same type of behavior when calling cell phones. It’s not going to be any different.
You’ll get Screening. And lots of it.
The greatest enemy to contact rate when cold calling is screening and nothing else. The long term ANSWER to this problem is…
People you’ve called before 3 to 5 months ago who answered the phone and told you they were NOT thinking of selling at that time. Those people’s phone numbers work and they’ve proved through their behavior that they pick up the phone when someone who’s number they don’t recognize calls. If you had a lists of 50,000 to 75,000 of THOSE people…then you could call through that database two or three times per year and get all the leads you can follow up with that you can handle so as to put yourself in a position to close 50 to 100 deals per year.
Of course that brings us back to the ORIGINAL problem.
Data lists of people who you have NOT called yet. You have to call through those lists at least once so you can actually GET in touch with people that answer the phone and put them into the Prime Lists for future calling.
So back to the original question. Do you pay more for the Cole data in hope that it will give you a boost in contact rate while you’re wading through the raw lists the first time around…or do you do something else?
Here’s My Suggestion
If you’re at all concerned about how much it’s going to COST you to get going with this cold calling thing but you ARE considering slicing out the $1,000+ from your limited budget in order to get access to Cole’s best data set, then change course and go with a lower quality data source like data from Mojo Lead Store and then pony up the extra coin that you WERE earmarking for Cole’s data program and reapply it to getting up and running with TWO Mojo dialers.
That’s two two phone lines, two headsets, and two Mojo Dialer accounts. Remember, it’s all about contact rate and on that front you’ll do much MUCH better by investing in two Mojo Dialers running at the same time than you would by paying for better data. Why? Because the only thing that overcomes the screening problem in a timely manner is to increase the number of dials made per hour and the best solution for that is dual Mojo dialers.
I’m going to be doing this myself starting next month.
Do you use Evernote in your real estate business? You should. Earlier this week, I had someone asked for help organizing her scripts so they could be used effectively on the phone – even if not memorized.
I am using Evernote for this myself.
This video is a crash-course in Evernote. It shows what it is, the basics on how to get “stuff” into it, and how to use it for real estate-related tasks. Mojo users will be particularly interested in the content at the END of the video where I show how you can use Evernote as your ultimate phone script application to be used on-the-fly while dialing to overcome ANY objection 10 different ways.