By Alexis Craig
What if I told you that you could generate $100,000 extra in gross commission income with only a minimal investment?
You probably think I’m full of it, especially if you’re not even making over $100,00 right now. But that’s because most people think the only way to increase their income is by generating more leads.
While lead generation is important, lead conversion is just as important. Many agents are leaving money on the table because of a failure to follow up.
The Surprising Math of an Extra $100,000
Let’s say you spend $5,000 to generate 50 leads and 10 of them convert to a successful transaction that is worth $5,000 in gross commission income, or a total of $50,000.
But with an effective follow-up system, you can convert an additional eight. That’s $50,000 in gross commission income. Let’s assume that four of those transactions are seller listings.
A listing that is effectively marketed should net one buyer transaction, which means you should get an additional four transactions, or another $20,000.
Since you have a strong referral program, your 12 transactions should net four closed transactions over the next year. That’s another $20,000. Assuming two of those referral transactions net two buyer transactions, that’s $10,000.
Total all of that, and you just made an additional $100,000. I’ve seen agents double the size of their business when they realized the money they were leaving on the table. The best part? They didn’t have to work twice as hard to double their business.
The Three Rules of Effective Follow Up
There are three rules that I try to implement when I’m creating follow-up funnels:
1. Realize that people don’t typically buy in their first interaction with you.
At any given time, only about 2 percent of people are ready to buy your real estate solutions. The misfortune is that a majority of agents only focus on the “hot” leads, or the 2 percent. But the fortune is in the follow up.
In our office, we have a mantra: “Communicate, build a relationship, and market to them until they’re buying, crying, or dying.” Most agents try to convert a lead in four touches and then pretty much forget about them.
2. Be consistent and frequent.
I see a lot of agents fall prey to what I call “lead generation tactical hell.” They jump from tactic to tactic, never sticking to anything long enough to see results. Consistency and frequency is the most important element to follow up.
I’m going to share with you a sketch of my follow up funnel for open house leads below. I’ve never shared this with the public, and for good reason. When you take a look at it, you’ll be tempted to try to get into the minutia. It’s important that you don’t get bogged down by the details of the funnel. My funnel is months in the making. It works because of consistent and frequent communication, not because of a specific email or the sequence that I use.
3. Automate the whole funnel.
Part of what helps me to be consistent in my follow up is that a majority of it is automated — either through technology or staff. As your business grows, finding the time to call leads that won’t be ready to convert for a year is a battle. There are always more pressing issues. But by putting them on an automated email sequence, or drip campaign, you can take all of the hard work out of it. This is going to be huge if you want to grow and scale your business.
My Follow Up Funnel for Open House Leads
As promised, here is my funnel. Don’t get lost in the details, but notice that I have a follow up system for every single type of lead that comes to an open house. I don’t let anyone go.
There are a hundred ways to follow up and I could have built my funnel in any number of ways.
Action step: Pick one lead type and create the outline for a seven part follow up sequence. Then, paste it below in the comments. I will try to jump in and give you feedback on your funnel.