Mumbling Out Loud : How to give yourself a RAISE (just like congress does!)

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How to give yourself a RAISE (just like congress does!)

By: Ron Tarvin
Wednesday, February 07, 2007 11:16 PM

One of the things that we constantly talk about in business, whether it is as a real estate agent or a retail clerk or CEO of a bank is "How do I make more money?". This question is one that is VERY pertinent to business owners.

So in the case of real estate agents who are independent contractors and do not draw a salary from their broker, they must rely on their ability to generate repeat business and generate new business. However, one oft overlooked way to "make more money" is actually to spend less money!

HUH?

Yeah, exactly what I said. In order to make money (in other words increase the amount of dollars going into our pockets for personal spending) we must learn how to control costs. A penny saved is a penny earned as my grandmother used to say. Not an easy task considering how many people out there want a piece of the real estate agent action! If you consider that over a million licensed agents in this country alone, a business would be wise to come up with a plan to get $20, $30, or $50 from as many of that group as they can. We see it over and over again with businesses that promise the moon to get our dollars and fall flat on the ground on delivery of their service!

So who are these businesses that take away from your bottom line without adding anything to the income column?

1. Lead generation companies--there are more lead generation companies out there now than there are leads! There are new companies springing up every day! Companies that have been around a while, like HomeGain, HouseValues and the like are seeing newcomers spring up to challenge them like Assured Marketing and AgentDirect (boy do I have a story about them, but I guess that would be another blog!). And their one goal is to get your money! And how do they do it? By coming between the agent and the consumer! Here's the funny part, we give them the carrot that they dangle in front of the consumer to get the consumer to give them their information and then sell them as a "lead". Yes, we pay to support the MLS and then a company that sells leads tells the consumer that by registering, they can get you access to that information (wouldn't you just rather had the consumer on your site getting the information?).

2. Marketing Companies--seems every day there are new marketing ideas springing up. Now of course, I'm not saying that marketing companies or new ideas are inherently bad. What I am saying is "use your head" when it comes to evaluating a new idea. When a company that has a "wait list" for your area calls you and says "that area just came available" don't you wonder "WHY?" If that marketing idea was working so well, why did the other agent abandon the program?

3. SEO companies-- here is one that is HUGE on my list of pet peeves. There are some GREAT companies out there doing SEO for your website...but there are a TON of folks that are out to scam you too! I get a call from a company about once a week and they claim to be the fastest growing search engine on the web and yet, no one I have talked to has ever heard of them! Common sense tells me to stay away from that one.

There are many other sources that bleed money out of the average agent but these are some of the easiest to fix! Just use your head to THINK about what you are being sold BEFORE you buy it! There are lots of forums and message boards out there full of agents across the country who are not shy about telling you when someone rips them off too...so take to the web and investigate fully!

Remember, there are NO silver bullets in the world of selling real estate. So if it sounds TOO GOOD TO BE TRUE, it probably is!

Comments

Member Since '06	David Dion said: These are important points for the new agent and seasoned agent. I get calls from all three of these types of companies on a regular basis. One of the biggest disappointments is when I see an out of state number on my cell phone (I do a lot of relocations from other areas) only to hear the next best and greatest pitch. During and after the pitch I wonder how many agents actually fall for this stuff. My advice. Be skeptical of all unsolicited callers trying to help you grow your business. Most are commission based hustlers. On a side note, and maybe contrary to what Ron posted, I did do business with Assured Agent and my experience with them was fantastic. The leads were there, the cost was competitive, and about 60% of every lead was real. My conversion rate was low because of my inability to convert and not because of Assured Marketing. I was getting in excess of 400 leads per month and quickly became overwhelmed. I do not use them anymore, but would recommend calling them and see what they might be able to do for you. They have (had?) a 5 free lead program. All the others were obvious sales people, and my experience was these guys actually care about what they are doing and took the time to talk to me, like a person and answered all of my questions. Great experience. I would love to hear your experience, Ron... Hey, will we see you in Vegas next week??? February 8, 2007 5:20 AM
Member Since '06	jack davidovitz said: I agree with ron and on the issue that david claims that he was to blame for not being capable to convert the leads I would look it as being gullible to the lead companies story since if you would get those leads from your costume designed site their would be no need to convert anyone One thing you need to be aware while buying leads is that just as it would not make sense for the owner of John Doe’s dinner to walk in to McDonalds and call the costumers to eat diner in his dinner it’s not making sense to get leads responding to the ads of other lead companies to come to yours…!!! The other reason its crazy to get leads and expect to actually close them is that the reason you don’t get those leads on your own is because you feed lead companies to overpower you instead of investing the money to improve your site ratings… Why don’t you get the leads you believe you have to buy from lead hustlers? Because you don’t promise a pie in the sky as do lead companies if you would advertise that you could get a nice villa on the hill with monthly payments of only $1100 your phone will never stop ringing but you will never make a sale then why do you expect to make a sale when you have the lead company do it for you? February 8, 2007 6:32 AM
Member Since '04	Ron Tarvin said: I think a lot of times that we hire lead generation companies for various reasons. One reason is the new agent looking to get started. I know that's how I started using a lead generation company several years ago. The other reason, and I've fallen for this one too, is a belief that it will give a stagnant business a kick in the butt to get moving. Ultimately, what I've found with these companies is that the DO generate leads. What they generate LEADS to lots of busy work but usually very little to no money! February 8, 2007 8:27 AM
Member Since '04	Al Block said: Great point Ron. Attention agents: Why are we out sourcing what it is our job to do already? We are the lead generators, we are the salespeople, we are the business owners. If you pay for lead capture, you are just giving someone else the ability to make you a slave. I hate to use that word because it connotates bad images. But that is what you are when you allow companies like Home Gain and Lending Tree, and everyone else out there offer you business that was yours in the first place. These companies only thrive because we let them. Next time you get that call offering you the referral from outside you real estate brokerage, say, "Thanks, but not thanks." This is not anti-competetive or anti-trust in any way. How many telemarketers call you at home to sell you something like a magazine subscription. I just say, "Sorry, not interested.". Does not mean I have boycotted "reading". All I'm saying is make your own cold calls or hire a local person who needs a job to call/mail/email for you. This way you still own yourself and you are not "a slave". February 8, 2007 8:34 AM
Member Since '05	Carol and Steve Coldwell Banker Parker Realty said: Great post Ron, I am now using a referral company...Real estate client referral I think is their name. It's my first experience with one - just thought I would try them out. When they called they said they had over 50 leads in my area waiting for an agent to call them. I received three leads from them since November. The first one I converted and made a sale and also received a referral from those clients. The other two were not even leads - I ended up getting my money back for those. I haven't received a lead since December. Those 50 leads were "cold leads" and couldn't be used. Obviously they didn't even exist as I have gotten none since then. I did get a sale which covers the cost of what I paid, but have been pretty disillusioned since then. We get lots of leads from our website, so I won't be using a lead company again. Carol http://www.peihouses.com February 8, 2007 10:59 AM
Member Since '06	Sharron and Steve Lobman said: My husband and I work in a small office with hardly any walk ins and we are new to the business. Even though our purchase of HouseValues Just Listed Buyer Leads has not produced any solid purchases yet, it has been beneficial to us. We like the database for prospects and the Drip Marketing Program is good. They offer a "personal coach" who has taught us a lot about marketing to Internet consumers. I do not think that we will continue with it after the first year, but it has been a good starting point to give us some experience while we get established. Next year, we will probably import all of these prospects into our Point2 office and spend this money on some other form of advertising. Sharron http://SharronAndSteve.com February 8, 2007 11:49 AM
Member Since '05	Matt Wilson said: I'm a new agent, 1 1/2 years in now, member of the executive club in ReMax and just got my cute little "Rookie of the Year" award, means little but I did like to get it. They do not teach you how to get buisness when you get your licence and the main guys in my office told me to go after expired and FSBO's, I don't have much choise as I really have no "circle of influence" and figure it will come in time with nose to the grindstone old fashioned work just like every other body in my office did for their first three years. That said I have been using HouseValues lead generation, I listed a 4 acre property eatate sale that will sell and got a buyer that we are finalizing an offer this sunday on one of my expired listings - double end - in January alone that I can attribute to them for sure, which pays their fees for the year plus puts $5000.00 in my pocket after split. I don't know if I just got lucky and luck does seem to play a fair role in this game but I can't do anything but give positive feedback on HouseValues. February 8, 2007 12:45 PM
Member Since '04	Ron Tarvin said: Sharron and Steve, my condolences. I too had a HouseValues subscription at one time and I was one of the cheerleaders. PLEASE NOTE MY OPINION FOLLOWS However, when they decided to KEEP money for a service that they were NOT providing, I decided I could no longer do business with them. The MarketLeader system has not worked properly in a long time. They did a dog and pony show conference call with the CEO of HV and never answered multiple emails about returning money that they were not entitled to because their product did not work for months before they told anyone about it. HouseValues is one of the most expensive of the bunch and one of the ones delivering the least. I understand being new to the business, but that's how they make their money...on newbies who really don't have the money to spend anyway. My HouseValues and JustListed subscriptions were costing over $850/month and the most I ever got from it was to break even. I got to pay to work I guess. Now I generate twice the leads as I was getting from HV/JL with my website (I was purchasing 30 leads a month and I generate between 60-70 "leads" a month with my website) and I spend about 80% less to do it! I now work on my site and that builds traffic through organic (FREE) search engine placements and I spend about $200/month on pay per click advertising with Yahoo/MSN, and my database for the last year is over DOUBLE what it was with HV and the contacts are usually MUCH better. I get the occasional None Yabusiness named lead, but only about 2 or 3 a month! And how about all the folks who bought into the HOMEPAGES route? What a mess that was. (again, MY opinion) The facts are that you can generate far more business driving people to your website with door hangers and mailouts than you will ever generate with an equal amount of money spent on lead generation (and in my opinion, door hangers and mailouts have some of the lowest rates of return compared to many other marketing methods!) For $850/month that I WAS spending with HV, I could have SNAILMAILED 1700 homes each month. The statistics tell us that in a 12 month period, 1 in 50 people that you don't know will do business with you from mailouts, right? So that same $850/month used to mail to 1700 homes a month, over the course of the year should have generated about 30 deals...and I can tell you I got anywhere near that number from my HV/JL leads. February 8, 2007 12:54 PM
Member Since '04	Ron Tarvin said: Matthew, I'm glad it's worked for you. I think luck does play a huge part in it, just as it does with website leads. Luck of the draw sometimes. Someone else mentioned that they used Assured Marketing and I have to say that while I never personally used them (other than their 5 free leads that actually they sent me like 15), they at least had good contact information and were legitmate leads (or at least they used to!) Another lead generation that I have never heard a single good thing about is www.agentway.com and they have a smooth set up for getting money. They charge a non refundable setup fee for each "geo-targeted area" that you buy (that's like a zip code to you and I) and it's about $50/each. Then they promise you three months of leads at $2/lead and $9/lead each month after that. You have the ability to accept or deny any lead they send you and they say that agents with at least 2 geo-targeted areas will average 10 leads a month. Pretty sweet right? Except that I have gotten emails from at least 20 agents that claim what I claim. They have gotten ZERO leads from the program and when you ask for a refund, well, you pay for leads AFTER you get them and your initial "SETUP FEE" is NON-REFUNDABLE! February 8, 2007 1:07 PM
Member Since '06	Heather West said: I'm fairly new to the industry as well, and I used HouseValues for my first year. After the first couple of months, I was overwhelmed with the number of leads and unable to respond with the attention you'd need to turn the good leads or weed out the bad. I don't think Housevalues under-delivered on their promises, but looking back, I don't think I'd spend money on a national lead generation system again, either. I got one client out of the system that's already paid for the year and keeps on buying, but I get better general response for the money from ANY of my local efforts. And it's much easier to turn your own leads than those you purchase - they made the effort to contact you personally, and they already want to work with you without having to be sold. You learn a lot in your first year, right? And I appreciate your idea, Ron, about the raise. I should be able to take home lots of extra money this year by just saying no. February 8, 2007 2:03 PM
Member Since '03	Mike Farmer said: The only thing I pay for now is Google Adwords campaign (pay-per-click), of which I can control the cost. I have the Google prospects go straight to a page in my website that is a call-for-action registration that explains my home-search program and lets them know to expect a call. Some days (I have it active on different days) I spend $70.00 and get 10-15 leads who give their name, e-mail address, physical address and phone number, plus criteria through the listing notifier. This has worked best for me. February 8, 2007 2:32 PM
Member Since '05	Matt Wilson said: Hello Ron: I was wondering about the coaches out there. My broker seems to love Richard Robbins and Brian Buffini. I was kind of forced to go to a RR thing in Toronto, what a waste of $700.00 that I really didn't have and now he wants us all to take the 100 Days BB course at the reduced rate of $500.00 Canadian Pesos. Plus the drive in each week to do it and the 3hr commitment. I don't really want to do it after the RR waste of time but the big agents also push you into this, one saying why are you even questioning why bother. I was thinking of taking the Craig Proctor course, he is at least still actively selling real estate not coaching courses. February 8, 2007 2:49 PM
Member Since '04	Ron Tarvin said: I don't know a lot about coaches out there. I've never taken a coaching course because I get all of that from my broker (we have tons of classes taught by people who are the leaders in our office) and my team leader sits with me once a month to do directional business consulting. I've looked over several things sent to me by some of the guys you mention. I don't like the Proctor system...something just hits wrong with his concept. Reminds me of a used car salesman, I guess. I have heard good things about Buffini. I occasionally drop over the Mike Ferry and listen to his webcasts ( http://www.mdfss.com ), and I've known a lot of folks that like Howard Brinton and his Star Power stuff ( http://www.gostarpower.com/ ). I also like David Knox's stuff as he is very entertaining ( http://www.davidknox.com/ ). But I can not endorse any of them since I do not use them. February 8, 2007 3:00 PM
Member Since '03	John Enxing, Associate Broker said: Great point Ron about the cost cut. That is how these big forbes and fortune 500 companies show a quartely profit for their investors if business isn't good, that is, cut cost! Anyhow, what I did is during the fourth quarter of 06, you know, Thanksgiving and Christmas, when all were traveling and buying retail, I began to plan for the spring and summer real estate market. I had a friend make a statement to me, "The power of HTML". So, I went to the book store and read on web design with HTML, and created several websites, and as a result I have first page ranking with yahoo and google on key word search for my area. The cost, time, time, and more time. But, I will say during this fourth quarter period of not a busy real estate market, it was time to cultivate the land and plant seed for the harvest in the spring and summer when the real estate industry is at it's peak. The cost of web design and hosting is very inexpensive, and when you get top search engine rank, there is no cost, and all that time you stay on the first page is leveraged marketing to your benefit. This is one technique for me. Remember, no real estate agent, no lead generating companies, and all the other companies that feed off of us! Be careful and use the nickel wisely..... February 8, 2007 4:59 PM
Member Since '04	Ron Tarvin said: I think I got censored on my own post! I posted some links to some useful stuff like David Knox and MDFSS seminars (which is Mike Ferry) and also mentioned that I know a few that use Howard Brinton from gostarpower but if you search for them on google, you'll find them. I don't care for Craig Proctor's stuff...too used car saleman-ish to me. February 8, 2007 11:34 PM
Member Since '03	Howard Arnoff said: An excellent post Ron with good advice especially to newer real estate agents. Forget the lead generators, HV is practically out of business, overpromised and underdelivered. A lot of "just looking" or refi "what's my house value" register thinking they are going to get an instant value and wind up with an agent calling, I don't think that was what they wanted when they provided their info online and I surely don't want to be the awkward agent who makes that phone call. Some old fashioned things still work, floor time, open houses, working your neighborhood, sphere of influence, friends, neighbors and relatives. Not expensive and your grandmother was right! Track where you are successful and keep doing more of those things, stop doing those which don't bring any potential clients or income. For a new fashioned idea, work on making your website better. Attract the 80% of the population who are now searching online and create your own leads in exchange for your time and effort. Very cost effective as well. February 9, 2007 6:48 AM
Member Since '06	Steven Burnett said: I like the way you think Ron and agree with you 100%. I've been marketing other online businesses for 10 years and have probably spent at least $10K on leads and autoresponder proprams for these programs. In the end when all the smoke clears, they didn't work well. Against my better judgement, I tried Housevalues and the leads were terrible. I dropped them and will not buy any more leads from anyone. Pay per click is the way to go until you develop a referral base of customers that keeps you busy without having to spend money advertising. Once in awhile you may get lucky with a lead, but most people don't. Just my 2¢! February 10, 2007 5:46 PM