I know what you’re thinking…
Engaging with your leads is time-consuming.
And if you’re like me, living by the good old 80/20 rule that Tim Ferris introduced in the 4 Hour Work Week (20% of the work produces 80% of the results. Conversely, 80% of the work only produces 20% of the results), then you’re wondering…
Is the time you’d spend following up and/or creating follow up systems worth the pay-off? Or will most of your deals come from new leads, not 3-month old ones, making long-term follow-up a waste of time?
Well, only you can answer that question for your business.
But I can tell you what studies say and what top-performing real estate investors I’ve chatted with say…
In short, consistent engagement is where the money’s at.
Thought Experiment: Motivated Sellers, Tire-Kickers, and Half-Motivated Sellers
Before we dive into all the fun facts and figures, let’s walk through a quick thought experiment.
We have motivated sellers who turn into a closed deal wicked fast (and which make you assume that, Hey! Every lead that turns into a deal does so quickly. So follow-up can’t be that important!).
Did you know, You’re …
Then we have tire-kicker sellers who’ll never accept your offer no matter what you do — they mostly exist to waste your time.
And finally, we have the most important lead of all…
…the half-motivated sellerTM
This is the person who is likely going to sell their house to an investor at some point down the road, but they aren’t under the gun as much as a full-blown motivated seller. They have time to consider their options, but you are one of those options.
Why is this the most important kind of lead you’ll ever receive? Because motivated sellers will convert so long as you don’t behave like a total dweeb, just do your thing and you’re good to go. Tire-kickers will never convert.
But half-motivated sellers need convincing, they’re interested in your service but they are likely comparing you to real estate agents in the area, other real estate investors, and even wondering what it’d be like to rent out their home to tenants.
These are the people who will grow your business to the next level.
Because if you start consistently turning half-motivated seller leads into deals, then you’ll increase the number of deals you do every month (without increasing your number of incoming leads) and you’ll capture deals that your competitors are losing.
Louis Grenier over at HotJar coins these partially motivated prospects as Undecided Explorers.
The industry he’s describing is different (more for ecommerce), but the concept is the same: some leads are more motivated then others. And remarkable business growth depends on consistently capturing the half-motivated leads.
That, you’re going to do by following up at least 5 times.
To the data!
The Cold, Hard Truth (& Data) About Engagement
Imagine that you’re a half-motivated seller. You want to get quick cash for your home and you’re in a bit of a hurry, but you’re not totally under the gun yet.
How are you going to handle that situation?
Well, you’re probably going to call multiple cash-offer companies — maybe even try to hear offers from multiple different companies — you’re probably going to chat with your go-to real estate agent, and you’re probably even going to read about what it’s like to be a landlord.
You’re going to consider your options like any reasonable person.
All that the real estate investor often sees of the half-motivated seller’s journey is a lead talking to them, asking pertinent questions, and then finishing with, “Okay — I’m going to make some other calls and I’ll let you know what I decide.”
A couple of things here…
- They aren’t going to actually call you back (not because they’re mean, but because they’re busy).
- If you don’t consistently follow up with them, they’re going to work with someone else — probably, the person who was following up.
One thing is for sure — the half-motivated seller is going to work with someone. And consistent follow-up determines whether that person is going to be you… or your competitor.
Ryan Dossey, a top-performing real estate investor and Carrot member admitted in a BiggerPocket’s podcast to having about 90% of people outright reject his first offer on their home. But that doesn’t bother him, because practically all of his deals come during the follow-up phase.
And he isn’t the only real estate investor for who that’s true. Most investors have a similar experience, finding that follow-up closes far more deals for their business than the first phone call does.
Here’s the data…
- Somewhere between 30%-50% of sales go to the salesperson that responds first.
- 80% of sales require at least 5 follow up calls.
- High growth organizations report an average of 16 touchpoints per prospect, within a 2-4 week span.
- The average real estate agent only makes 2 attempts and 45% only make one attempt to follow up a lead.
- 44% of salespeople give up after one follow-up.
- 92% of salespeople give up after no sales on the 4th call. But 60% of customers say “no” four times before saying yes.
- Those who attempted to reach leads within an hour were nearly seven times likelier to have meaningful conversations with decision-makers than those who waited even sixty minutes.
- Following up with web leads within 5 minutes makes you 9 times more likely to engage with them.
Now let’s talk about how to build an effective and easy-to-manage follow-up system.
5 Tips For Effective Engagement
1. Provide Free Value
So… what are you going to talk about?
One of the first things that people struggle with when creating a follow-up system is, how are you going to keep reaching out without sounding like a broken record and annoying the person?
My advice is to provide your leads with free value about their situation.
Here’s an example:
Hope you’re well! I know that, last we talked, you were considering renting out your house to tenants. And I just stumbled across this article which talks about the ins-and-outs of being a landlord –> [LINK].
Anyways, hope it helps!
That’s one way to provide your leads with free value, stay in contact with them, and remind them that you’re an expert on their situation. Oh! And if you use the above template or something similar, send them to your own blog content if possible (sign up for Carrot’s Content Pro plan or Advanced Marketer plan and we’ll provide the content for your blog every single month!).
2. Treat Prospects Like Close Friends
Let’s be HONEST.
It can be a little awkward getting on the phone with someone for the fourth time to ask them if they’re still interested in selling to you. To avoid awkward silences and the inevitable “So, uh… are you still interested?”, try treating them the same way that you treat your close friends.
More than likely, they’ll reciprocate without even meaning to.
Salesperson: Hey Tim! It’s Mike. How the heck are ya?
Tim: Oh. Hi Mike. I’m good. How are you?
Salesperson: Ya know what? I’m excellent. Just had a big lunch with my wife and it was a wonderful mid-day break.
Tim: Haha. Nice.
Salesperson: So look. I was thinking about your situation some more and I just came across this resource I thought would be valuable to you — can I email it to you?
That’s just one example. Obviously, be yourself. Don’t try and be someone your not. The point is to connect with the lead on a real and authentic level and, by so doing, to increase trust, making sales calls which could be quite drab, interesting and engaging.
3. Automate As Much As Possible
An easy way to ensure that your follow-up system is ineffective and takes way too much time is to do everything manually… by memory.
Dear god. Please don’t.
When texting or emailing your leads, remember this rule. Think… “Would I really read and reply to this myself?”
Here are some tips that might increase your response rates. You can use these within your automated messages:
- Don’t try to include everything in one message. Especially a text.
- Questions get Responses.
- If you send a link in your message, be sure to create some convo around it. For example, an agent might ask.. “We have new homes that just hit just hit www.yourwebsite.com, have you seen them? If not contact us today!”
- Inject your personality. DO NOT make yourself sound like a robot. No one likes to deal with those.
Also, use a CRM to record conversations you’ve had with leads and create tasks for when to call again. Automate, automate, automate.
4. Hire a Salesperson
Eventually, if your lead-gen gets intense enough (fingers crossed that it does!), you might want to hire some help.
Just make sure that you hire a competent salesperson, ideally someone who has experience in sales and is good at it.
If your budget for hiring a salesperson is low, consider offering commission only, but be aware that getting a longterm commitment out of your salesperson will be more difficult than if you paid them for hourly work.
5. Keep Engaging After The Deal is Closed
Deal closed. You can stop following up now, right?
Actually, you should keep that relationship going as long as possible. Keep them on your general email list if they’re open to it, send them holiday cards, and definitely ask for a referral.
47% of top salespeople ask for referrals consistently while only 26% of non-top performers do the same. Also, 83% of people are happy to give a referral after a positive experience, but the majority of salespeople don’t ask.
Keep the relationship alive, even digitally, and it’ll likely pay you more money down the road.
Here are 5 SIMPLE STEPS to effectively engagement after the deal has closed…
- Send a “thank you” note.
- Do a check-in call a week or two after the sale and find out how everything is going.
- Keep your communication open. Ask them for permission to keep sending them high-value materials.
- Keep thinking about a second deal. Creating a relationship goes beyond the first transaction. Set yourself up for an opportunity to offer more products or services to the client.
- Ask for referrals. You’ll find that most of the time customers are willing to refer others to you because they trust you and know how important referrals are. People LOVE to help. They also LOVE to make themselves look good.