“20 Minutes of Successful Niche Secrets – EPISODE 66”,
Where I speak to you about the third shift in 2019 - The Lead Conversion Shift
“20 Minutes of Successful Niche Secrets – EPISODE 66,”
Shift #3 – Your Lead Conversion System with Glenn McQueenie
Glenn: Hi! It’s Glenn McQueenie, and welcome back to part three of The 3 Shifts for 2019.
In the last episode, I talked about the first four shift tactics that Gary Keller covers in his book, “Shift: The 12 Tactics.” One was to get real and get right, which is all about your mindset and making the mental shift and the action shift. And then we talked about tactic two, which is re-margining your business and holding every dollar to account. Tactic three was about doing more with less, which means looking back at your staff, top-grading your staff, combining roles, holding them to a higher account, attracting better talent who might be available now in this market. We also talked about going back to the fundamentals, which were lead generating and capturing, converting to appointments, presenting to buyers and sellers, showing buyers and sellers, writing contracts, coordinating the sale, and also managing your money. And then we finished off with tactic four, which is to find the motivated. It was all about getting rid of the “maybes” in your business, focusing a lot of your time on your “yes’s,” no time on your “no’s” (but keeping contact with them) – but really drilling down into your “maybes” and forcing them to make a decision that “Yes, I’m going to move right now,” or “No, I’m going to take my place off the market,” or “I’m going to start looking.”
So let’s get to the fifth tactic, and it’s called getting to the table, because getting to the table is really all that matters in a shifted market. It’s your lead conversion. Here’s a roundabout way of thinking about it, but if you do a lot of lead generation but you don’t really get a lot of names, what good is it? Or if you get a name and number but you don’t get an appointment, what good is that? The important part of lead conversion, lead generating, is you have to really get to the appointment – whatever it takes. It’s getting an active lead from being a prospect to being an appointment, and then from the appointment to getting the contract. And once they move it to a contract, it’s selling the home or finding them a home to buy, which is the negotiation stage. Then we have to remove the conditions, we have to firm up the deal, and then we’ve got 30 days or so to close it. So it’s the whole production line – but none of the latter part works unless you’re willing to lead generate and do the appointments required in order to get your contracts done. The other thing I think you really have to focus on is that your success in a shifted market will hinge entirely on your ability to convert leads, and that’s really where the key is right now. So you have two battles. One is to get to the listing table, and then the second is to get the listing. It’s the same for buyers – it’s to get to the buyer consultation, and then convert to get the buyer contract. So you need to have a capture system, which will ensure you get enough information from the leads that you can follow up with them. And then you need a connection system that will generate timely, scripted responses which lead to lead conversion. This really allows you to assess their needs and establish the relationship. You also have to cultivate. What is your follow-up system right now? Am I building deep relationships? Am I moving them along the sphere? A lot of people don’t understand this rule called the “15-85 Rule,” which I think I learned from Dean Jackson, and it was this whole concept. A direct mail marketing company was actually tracking conversions on billions of pieces of direct mail, and what they found out is 15% of the people who got the mail (if they were interested in the product), would do something in 90 days. But the other 85% would do something between 90 days up to almost two years. Our industry is so focused on only working with those 90-day clients, but they don’t realize that all of your equity is actually in the 85% of the people who are like, “Not now, but just keep me posted.” And I think this is where your cultivation system comes in. You really have to focus on, what are my touches? What’s the system I have when I meet somebody? Do I mail them first? Do I email? Do I text? Do I call? Do I drop by and see? Really, this combination of mail, email, text, call, and see is what converts the lead to you, but you need to have a system to follow up on that. It’s just so important. So think about that next time. As much as we’d love to find somebody who’s going to buy and close in the next 30 days, the reality is, if you look at most of the successful agents in this business, they’ve been nurturing and cultivating leads for a long time; you just see when the sign goes up. If you really ask them about the back story, a lot of them will tell you that they either sold them a house, or they’ve been talking to them for six months or nine months or a year or two years until they finally got to when now is the right time for them.
Let’s get to tactic six, which is, you’ve got to catch people in your web, whatever your marketing program’s going to be – Internet lead generation, Facebook, Instagram, Kijiji, Craigslist. Is it direct farming? Geographic farming? Demographic farming? Psychographic farming? Marketing to your niche market? You need to have a system that you can catch them in your web. You have to have a way for consumers to register with you. It could be a landing page. It could be an opt-in page. It could be a special offer page. It could be a free report page. You need to be able to capture names and get them into your database. And then what you want to do is, when they do respond to you, your fast response is crucial to the whole outcome here. Thirty years ago, people used to leave messages at the real estate office, and I’d walk in and then I’d get these yellow messages that were rolled up in a circle in a tube that had my name on it. And if I came in on Monday and they called on Friday and I called them back, they were totally okay with that. Well now, if someone texts you and you don’t reply to them in a minute, they’re totally annoyed. So you just have to know, the game changes. You’ve just got to change the game and respond, because it’s the speed now that works. And also just understand that you have a long-term cultivation system in your business. A lot of the buyers are doing their research early. They’re starting this process way before you even hear about them, and then they tend to come to you later on. So I think it’s really important for everybody in your database that you’re always checking with them, checking their pulse, and seeing how you can help them.
Tactic seven is really about pricing ahead of the market. Don’t chase the market or let the market chase you. It’s about sitting down with your sellers and saying, “Okay, here’s what’s happening in the neighbourhood. We’ve had six months (or nine months or three months) of prices either flattening or declining, and the most money you’re going to get for your house is today, because I think a month from now, prices are going to be even lower. So we should be pricing not at the last sale. We should be pricing slightly below the last sale. And if I’m wrong, the market will correct me anyway.” But what most sellers want to do is price at the last sale, plus tell you that they have a Macramé owl clock in their kitchen and they’ve got all these other features that have got to be worth at least another 10%. So then, somehow, you take the listing, and now you’re stuck. There’s no way, because it’s going to take a couple of weeks for you to get that reduced, but now the market is moving away from you, and now you’re really chasing a market. So you can’t ever let your pricing be out of sync with the market if you really, really want to sell. And this is going to require you to get better training and sharpen your knowledge and your attitude and your skills and your habits.
So there are seven “maxims” (I say) of the market right now, whenever you’re trying to price ahead. Number one is you have to be a student of the market, and you have to know your numbers. In a hard-shifting market, you have to focus your comps on actives, because your pending and sold data may already be out of date. You have to be actively looking at the properties on the market and understand what’s behind the numbers. You have to keep your presentation as current as possible and let your research speak for you. Number five would be, you have to pre-qualify for motivation. The sellers who most need to sell are the ones that are going to sell the most often. Number six is, secure a price reduction in advance. When you actually get the listing, you just post-date your price reductions. And most importantly, always price ahead of the market. That’s the tactic that you have to do, and that’s tactic number seven – pricing ahead of the market.
Tactic eight is about standing out from the competition, and this is about proper pricing, proper staging, and preparing the house the best you can. We know that staged homes, on average, sell in half the time that non-staged homes do, and that sellers who staged their homes ended up with about 6.3% more. So understand in a shifted market that you have to tell your sellers that, “Hey, buyers are looking for value, and you’re never going to get a second chance to make a good first impression, because there’s just too many homes out there and they have a lot of choices.” Really focus all of your activity on finding and attracting motivated buyers. And again, have your offers. Offer a best buy list. Create urgency – “The Best 10 Deals on the Market Right Now.” Tell people that if they wait, they’re going to miss the opportunity. I have no idea how long a market will be down for, or how long it will be up. In fact, nobody does. And if anybody tells you they do, they’re, I think, simply lying. If you look in the US in 2005, 2006, 2007, the advice that the Fed was getting from the top economist was, “I think we’re in for a soft landing.” That was the best researchers out there, and we know that when prices fell 40-50%, there was no soft landing. It was chaos.
So let’s get to tactic number nine: create buyer urgency. We’ve already talked about it, but this is the biggest challenge you’re going to have, is actually just getting buyers to buy. They’re fearful, they’re reluctant, and they’re absolutely convinced it’s going to go lower. Every market has its good buys and it has its great buys. But the big thing is, you’ve got to be focusing on the urgency of buyers, and you do that by becoming the local economist of choice, where you have all your numbers. You do it by working on your emotional intelligence, which is all about, really, just understanding what their big “why” is, and really addressing what their buyer reluctance is. We’ve got four strategies to overcome the reluctance. One would be, why wait? And you can explain the hazards of trying to time the market. Two is trading up – there’s never a better time to trade up than in a down market. The other strategy is constantly narrowing the field and search criteria for your buyers, and just watch for that right opportunity and right deal. And that leads into number four, which is just find the best buy for them, and identify why it’s such a great value for them to do. It’s so important, but creating buyer urgency is really a matter of your knowledge of the market, your skills at communicating the realities, and also of your assertiveness in challenging their thinking. This isn’t the time to let them walk all over you. This is the time to sharpen your skills and really help them get what they want.
Tactic 10 is just expand their options. This is where you need to start looking at more creative financing options, more legal options – joint ownership, getting groups of people to buy together, doing joint ventures with people. Instead of four people trying to buy one place, you get them all together and they buy a fourplex. We also work at creative financing. What can the seller do to sell their home? Can they offer an inducement? Can they buy down the interest rate? What are the creative things that buyers can do? Would they offer a credit to the buyer on closing to do repairs? Would they do the repairs for the buyer ahead of closing if they agreed upon a higher price? What can lenders do right now? Is it time to stay away from that lender, and go into a private mortgage? Is it time for them to tap into their parents or other sources? I always think it’s not about the parents doing them a favour. I think if the parents have got a line of credit on their house, they can borrow at 3.5-4% and lend it to them at 6% and make the difference as profit. It can be a win-win for everything. Sellers can contribute or offer concessions. They can hold back a mortgage (a vendor take-back mortgage). I think we can start seeing a few more government-funded programs come about. They’ll reduce it down to 0% down payments again. So just watch what’s going on, but your key on how you can expand the options is you have to have a firm understanding of the playing field, the players, and the options. You have to really build the team of financial experts and sources, and make sure they keep you informed and up to date on what’s going on, and then position them to serve your clients.
We have two more tactics left, and then we’re done. One is, you have to master the market of the moment. If it’s Power of Sales, foreclosures. We have a new thing called “I bid” offers, instant offers, which are Internet bids. We’re going to have to really master the market and understand that there’s going to be buyer reluctance. You might have some unreasonable sellers. And there might be some affordability gaps. What are your strategies behind that? Again, I’ve said it a few times on this podcast, but just play the hand with the cards you’re dealt, not the ones you wish you had. It’s just about getting real. Get right and say, “Okay, if it’s up to me, let’s go and get this done.” It’s not anyone else’s problem in this market. It’s your job to be well trained, to know all the options, and really just to master the market of the moment.
And then the final tactic is number 12, which is bulletproof the transaction. Your job is to get the transaction to closing. You have to be an even greater fiduciary for your clients and protect them. You should be getting crazy deposits, like a 10% deposit, quick closing. Allow them to do a home inspection prior to tying up your property conditional on a home inspection, so you don’t have to report it as a deal fallen through. Expand the irrevocable sign back time. Give them three or four days, and then they can do their home inspection or get their financing in order before you have to tie it up and report. You’re going to have buyer remorse that’s going to happen. You’re going to have seller anger. Buyer remorse occurs when they buy a property, and then on closing, they find out the neighbour (identical home), bought for 5% or 10% less, and then people are looking for a way to get out of the contract. You’re going to have some sellers angry at the prices that they got compared to what they thought they were going to get. You might have the banks clamp down on financing. It’s going to take longer to get these things done.
So the whole idea, really, is to just listen. Be that leader. In part four, I’ll start talking about the technology shift and also the emotional intelligence shift, because this is where we really have to hold their hands, support them, help them, guide them through (which could be a very stressful transaction) – but this is why you get paid the big bucks, and why you’re a professional, is really to just safely navigate them through this and bulletproof the transaction. And that’s going to include that you play defense. You really have to be assertive in protecting your clients’ welfare in the transactions. You have to catch things early, before they happen, that could put the closing at risk. This is just the time to be the true advocate, fiduciary, for your clients.
So there we go! We’ve just finished all of those shift tactics. Again, I would tell you to buy Gary Keller’s book. It’s called “Shift: The 12 Tactics” by Gary Keller. Looking forward to talking to you next time, when we record the fourth part of this, which is the technology shift and the emotional intelligence shift. Thanks for listening!