Leverage is a buzzword that’s often too casually used. We’re told to create leverage by adding administrative staff, buying online leads, hiring buyer’s agents and many other activities, all of which can transform an agent’s business into the envy of others; however, creating leverage by adding additional expense can also cause a business to fail. So how do you ensure you get the upside of creating leverage and avoid the downside? Below are a few suggestions:
Set expectations at the outset.Don’t be that agent who hires an administrative assistant only to regret it six months later. Set very clear expectations before anyone is hired. How much will this position cost? What do you expect this person to do? How will you train them to do the job? And, most importantly, how much more revenue do you expect to produce as a result of having someone take over the administrative duties so that you can spend your time on money-making activities instead?
Know the required return.How much additional revenue do you need to generate to justify an investment in online lead generation? While it’s not reasonable to expect a return on your investment starting day one, by months 6 to 12, you should expect six times the return. For example, if you spend $1,000, you should expect $6,000 in revenue as a result.
Track the return.Have a way to track everything. Make sure everyone involved knows the expectations, as well as how the actual results measure up. For example, if you’re buying online leads, make sure your company rep (the person who sells you the leads) understands what revenue you need to generate in order to continue with the expense. If you’re spending money on mailing campaigns, what do you expect the results to be? How many responses should you receive for every 100 pieces mailed? Our response rate has historically been 0.46 percent. I know this might sound low, but you can make a huge profit from this level of response.
Make certain you’re tracking the return.This one bears repeating because few people actually set expectations at the outset of a new program, and fewer still actually track to determine if the expectations are being met. They have good intentions, but life just gets in the way. Set up your system for tracking results, then make sure to update the tracking no less than once per month.
Make course corrections.When creating leverage through additional expense doesn’t result in increased revenue and additional profit, you need to make course corrections along the way. Many agents that advertise with Zillow or realtor.com® are inconsistent at best with their follow-up and choose to blame the system instead of themselves. Once you’ve followed up with prospects the same way 20 times and aren’t getting the results you need, you must do something (anything) different. Make 20 more calls using a new follow-up script or system, then measure the results again. Continue making changes until you find what works.
To help you get started, I’d be happy to provide you with a tool I couldn’t run my business without: The Lead Tracker spreadsheet. It allows me to have a complete picture of all my lead flow and conversion rates at a glance. Connect with me at Cleve@GoGaddis.com and I’ll send you a copy.
Cleve Gaddi is a master coach with Workman Success Systems and team leader with Gaddis Partners, RE/MAX Center in Atlanta. He learned sales the hard way, selling vacuum cleaners door-to-door, and now puts those skills to use in helping his team close $60 million annually. He loves to share his systems and strategies to help others succeed. He hosts the Call Cleve Atlanta Real Estate Show heard weekly on NewsTalk 1160 WCFO. Contact him at Cleve@GoGaddis.com. For more information, please visit www.workmansuccesssystems.com.
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