Is it possible to buy a new client?

Post by Rob Minton
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This morning I took some time to review some notes from my real estate sales business. The notes I reviewed were lead generation totals. Remember, I no longer own my business. The notes I reviewed were prior to the sale of the business. While reviewing the notes, I thought of a big break through I had with my business, which was that you can buy new clients through marketing.

When I first got into real estate, I didn't fully grasp this concept. Sure, I realized that advertising generated leads. However, I didn't have an effective way to convert leads into clients. Because this conversion was missing from my business, I didn't "see" the ability to buy clients.

To show you what I mean, here are the notes I reviewed this morning which summarized one month of advertising:

                                                                                  Cost            Leads Generated

Advertorial Adv. in Larger Circulation Newspaper         $,2500                349

Advertorial Adv. in Smaller Circulation Newspaper        $550                    36

Marketing letter mailed to my attorney's database        $550                    35

Small Classified Adv. in Large Circulation Newspaper    $200                    3

Adv. in Local Investment Club Newsletter                     $125                    3

Advertorial Adv. in Free Newspaper                             $337                    32

Totals                                                                        $4,262                458

A question for you:

Would you invest $4,262 to generate 458 leads for your business?

Some of you would say "YES" in a heartbeat. Others might hesitate on making such a large investment. I've been in both camps.

Those of you who quickly answered "YES" must have systems within your businesses to convert leads into clients. Using their average lead conversion percentages, they can quickly calculate how many clients will come from the 458 leads. They probably can calculate how many home sales will come from these leads too.

Here are my lead conversion percentages for the leads generated above:

I received 46 client applications. I mailed a free report to each lead which included an application to become one of my clients. Approximately 10% of these leads applied to become one of my clients. My team signed 36 of these applicants to exclusive representation agreements and we sold 16 homes.

I split commissions with my agents, so let's say that the net commission to my business was $2,000 per sale after paying one of my buyer's agents. The $4,262 investment to buy leads turned into around $16,000 in net commissions back to the business.This is a 275% return on investment.

How many times a year would you like to invest $4,262 and get back around $16,000? Well, I did it 12 times a year through monthly marketing. You have this same ability in your business, if you can systematically convert prospects into clients.

The return on investment is great, but the lesson on buying clients is priceless. Can you see how I bought new clients? In fact, I paid $118 for each new client. ($4,262 divided by 36 clients)

What made this possible?

Having systems in place to convert leads into clients and clients into commissions.

A lead conversion system is the key to buying clients. If you don't have one, you shouldn't spend the $4,262 on marketing because you'll be wasting your money.

In my business, one of the lead conversion tools I used was "The Free Report". The free report I used was a sales letter that I wrote which compelled my target buyer to apply to become one of my clients. This sales letter became the goose that laid golden eggs. We then added several other lead conversion tools to the business which helped us convert more leads into clients.

The reason I was reviewing my notes is because I'm in the process of launching a new lead generation and lead conversion system that agents can use to systematically attract and convert leads into clients. This new program includes a compelling sales letter (Free Report) prompting the target buyer to apply to become your client. This program has been engineered around the recession by focusing on specific segment of the market. This program will be released in mid March. You can sign up to be on the pre-release notification list at: http://www.NotificationList.com.

Before we part ways on this blog post, go back and study each advertisement I ran and the number of leads generated. Can you spot the 80/20 principle in play? Which advertisements resulted in 80% of the leads generated? Some valuable information that you might be able to leverage in your business.

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