I recently received a great question from someone reading the blog. I’ve included the full question below along with my thoughts.
First, a quick thank you for your work. Back a few years ago, your marketing ideas were some of the best and I used them to make a lot of money. Still do… Thank you.
One of the biggest issues I see in marketing today, is that many marketers give away free consulting- by mistake, in the name of providing content they think their client needs in order to convert them to revenue events.
In real estate brokerage, I have found that if I follow a simple marketing doctrine, I don’t get tempted to provide too much free consulting. I market to generate a lead in order to convert that to a face to face appointment. That’s it.
As part of my sales process, I work off the doctrine that I am looking to disqualify a prospect rather than trying to sign them up for something. (Years ago, I invested a lot of time and money in the Sandler Selling system which I cant say enough good things about.)
If you are operating as a solo agent, you must be mindful that your cost of services in terms of the time you spend putting a deal together is largely the same. So doing a $80K rental house or a $800K apartment takes nearly the same amount of time. What I am talking about here is really pipeline management. As a result, it is wise to market to generate leads to fill your pipeline with the types of deals that will give you your volume requirement in terms of deal size and number of transactions.
In the past, I have generated great leads, converted them and ended up with a stable full of small deals that because extremely time intensive and yielded small fees. Conversely, I have had years where I had a much smaller pool of closings that generated the same fees or even more. The latter leaves you with way more free time….
However, since some of the lead generating activities are so easy and simple and provide such great lead flow for smaller deal sizes, it seems crazy to walk away from that low hanging fruit. As a result, I started referring these smaller deals that did not fit my pipeline to other agents. The result was great in that I still generated a fee without doing all of the heavy lifting on a small deal.
I’d be interested in hearing your thoughts on free consulting and pipeline management in the future.
This is a great question, isn’t it? Well, actually there are two questions here to consider:
1. How much free value do you give away in your marketing?
2. Do you focus on lower or higher quality leads in your marketing?
Let’s start with the second question. My suggestion would be to focus your marketing on higher quality leads. Our two main resources of time and marketing dollars are limited. Because of these limitations, we should minimize resources used to attract and convert lower quality leads.
By lower quality leads, I mean “lower commission income” leads. A lower quality lead might be a first time buyer looking to buy one lower priced home with financing. You’ll work very hard, and if all goes well, you’ll collect one small commission check. A higher quality lead might be a cash investor who is looking to buy a larger multi-family property, or several single family homes. This higher quality prospect may lead to one large commission check, or several smaller commission checks.
The more time you spend on lower quality marketing and lower quality prospects, the less time you’ll have for higher quality marketing and higher quality prospects. In the gym I sold this year, I had experimented with Groupon deals to attract new members. This marketing strategy generated a significant number of lower quality leads for the gym. These leads all wanted to basically workout for free. They didn’t see any value in what we offered. They were focused on saving money instead of getting results. We ended up wasting a lot of time and energy on these lower quality prospects. I finally cancelled all Groupon offers and eliminated this marketing campaign all together. I realized it was better to let all the other gyms go after these lower quality prospects!
What good is a database of lower quality prospects?
When you trade something of higher value for something of lower value, you make a poor trade.
Trading your precious money for lower quality prospects = poor trade.
Trading your precious time for lower quality prospects = poor trade.
Agents make this trade every day and get pissed off when they struggle from month-to-month.
Based on your question, I believe you’re 100% correct in how you’re approaching your marketing. You’re leveraging the opportunity to profit from lower quality leads without having to sacrifice your time, which is your most valuable asset. Your time is reserved for higher quality prospects. You’re choosing to trade something of high value to receive something of high value in return.
Having said all of this, it is best to focus your attention on attracting and converting higher quality prospects. You have to know who this higher quality prospect is and work backwards.
In terms of marketing, I agree 100% with your process of not offering free consulting. The goal of your marketing is to get high quality clients. Never lose sight of this goal. We don’t get paid for giving away great content. The free content we give away should be used as a lead conversion tool engineered to get the high quality prospect to hire you as their agent. In other words, the free content is really a sales letter for your services. This sales letter is intertwined throughout the content positioning you as the expert.