I started to call this step “Building Your Infrastructure” but I liked “Assembling Your Tools” better. I guess there are a couple of reasons I prefer the word “tools”. First, it doesn’t elevate the technology to a place that it replaces personal skill or responsibility, and second, because tools are just that — tools.
When you evaluate a skilled automotive technician, you don’t judge his abilities by the size of his tool box. No, as someone who spent over 30 years in the automotive repair industry, a great technician can excel with a minimum of tools, so long as they are the right tools. He doesn’t need big, fancy, high-priced tools to show the world how good he is. His tools are simply extensions of his ability that enable him to leverage the skill he already possesses. They can never replace skill or responsibility. Even the most skilled technician, with the best tools, must show up to work or the skill means little. In other words, tools are important, but it really comes down to skill and responsibility.
That being said, let’s discuss the tools an agent needs to excel in this new age of real estate. Real estate has changed in the last few years, and because of the way it’s changed, the tools an agent needs to be successful have also changed.
Allow me to give you another automotive example of what I mean. When I was an automotive technician in the late 1970’s the US auto makers decided to convert to the metric system. All of a sudden, not only did we all have to learn to recognize different sizes of fasteners, but we also had to go out and buy new tools. The old SAE or non-metric tools didn’t work on the new metric automobiles. In fact, trying to use non-metric tools on metric fasteners would not only not work, but it would damage the fastener so that it wouldn’t work with the appropriate metric tool.
Today’s real estate is different that it was 10 years ago. Different tools and a different approach are needed to be successful. And just like in my car example, using an old approach on today’s customer will also cost you your opportunity of doing business with that customer, even if you should later try to use the correct approach after messing it up with your old traditional one.
I’ll get into how and why the customer has changed in an upcoming segment, but for now, just trust me — the customer has changed and your approach and the tools you need have also changed. In the old days, your marketing tools were business cards, fliers, personal brochures, post cards, refrigerator magnets, newsletters, yard signs, magnetic signs for your car, telephone, and a personal organizer/calendar.
While it’s nice to have those tools in your “tool box”, if you don’t get a few of the new tools, you simply won’t be able to work on the new models. It’s not that there is anything wrong with those tools, it’s just that their usefulness is very limited in today’s real estate climate. The customer has changed.
“OK, Matt, so what are the new tools I need for today’s new age of real estate?” I’m glad you asked. I believe that it really comes down to only four tools that are critical to success today. All of them are technology based. Here they are: a website, an LCM gateway, an IVR system, and a contact manager. Let’s talk about each one in a little depth — how it works, where you can get it, and what you should expect to budget.
Your Own Website. Today their are literally thousands of companies willing to sell you a website. Many are templates sites that you can edit and personalize without becoming a computer programmer or web designer. They range in price from free to a couple of hundred dollars per month, depending on the website. Typically, the better they work, the more they charge. In my opinion, and for reasons I’ll explain in a minute, I would recommend you spend as little as possible.
Your website really just needs to do one thing. It simply needs to provide your customers with access to all the area listings, or the MLS through an IDX link. That’s it. There is an abundance of research that will back me up on this. When asked what they wanted from a real estate website, 94% of real estate shoppers surveyed wanted access to the listings. Virtually every other possible offering was a distant second. Our own testing has shown that they want to see the listings and they want simplicity.
Again, if all the customer wants is easy access to area listings, don’t waste your hard earned commission dollars on all the other frills, since the only one noticing will be you. One more thing about websites: you need to remember, the website isn’t any good at all unless it produces you business. The purpose, after all, of any marketing expense, is to bring you business.
According to the most recent data from the National Association of REALTORS®, the typical real estate website captures less than 1% of the visitors, or in other words, it is 99% ineffective at producing business. Even the best sites we’ve tested, and we’ve tested hundreds, convert only 6-8% of the traffic using various registration forms.
That’s why I believe you must have an LCM gateway or (Lead Capture Module) integrated with your website — in fact, our LCM comes integrated with its own simple search site or it can be used with any existing website. That way the website can do what it does best (deliver information) and the LCM can do what it does best (capture customers online). So, let’s talk about the LCM Gateway.
Your LCM Gateway. An LCM gateway is a specialized mini-website module that is designed to be integrated to a website. It’s sole purpose is to capture the maximum number of visitors, so instead of capturing only about one percent of the visitors to your site, by using an LCM gateway you capture between 30-35%. The first time through the gateway, the user has to register to use your website. From then on, he or she can come and go freely without ever re-registering. The procedure is simple and effective.
Why does the lead capture gateway work so much better than the registration forms on most real estate websites? Why couldn’t you just put a registration form in the customer path and receive the same results? Well, you would probably receive much better results than you receive now. We’ve seen agents take their site conversion up to the 5% range just by doing that one thing. However, the LCM gateway is specifically designed to maximize lead capture, while web forms are not.
Online lead capture (OLC) is a science. In fact, as one of the pioneers of OLC, I’ve written extensively about the Science of Online Lead Capture, trying to educate agents on the technology that has put our company on the map. Without going into all the science here, the reason it’s important to use an LCM gateway is that traffic on the Internet costs a lot of money, and every year, as more and more agents compete for the same visitors, the prices go up.
Let me explain it this way. If Internet traffic costs an average of $1 per site visitor (and that is the national average cost), then a site with an LCM gateway generates customers for about $3 each where that same site without an LCM gateway produces far fewer customers and at a cost of about $100 each. See the difference? It’s huge. That’s why and LCM gateway is a must-have tool in your tool box and you should cost you less than $200 per month. Our company, FavoriteAgent.com, gives our proprietary LCM gateway to all of our coaching students free of charge.
Your IVR System. An IVR (or Interactive Voice Response) system is a telephony lead capture solution. It is to the telephone what an LCM gateway is to a website. You may have seen it called a “call capture hotline” or “information hotline”. You should have it integrated to anything where a customer might call in. I have it on pages of my website, my yard signs, and anywhere a customer might find me and want to call.
The way it works is when a customer calls, regardless of whether they have caller ID block, their phone number is captured, while the customer is routed to a pre-recorded message that might have information about a house, or an advertisement to your website.
Generally speaking, an IVR system is easy to set up and usually costs less than $100 per month. My personal favorite is Proquest Technologies and I have used them since 2002. Their system can be licensed for about $39.95 per month plus usage air time. The average customer spends $60 per month. This piece is a must have because the ability to capture customers is the most important thing in today’s real estate climate. Another solution is our LCM phone gateway which we give free of charge to our coaching students.
Your Contact Manager. A contact manager or CRM (customer relationship manager) application is a database specifically designed to manage contacts. The reason that having a contact manager is so important in today’s real estate climate, is that today an agent must manage a lot more customers at any given time. Instead of working a customer for 2-3 weeks, today’s customers are with us much longer, an average of 6-8 weeks.
That means that you will be managing all those contacts for 3-4 times as long and you will be managing 3-4 times as many, just to do the same amount of business. Most agents had a hard enough time just keeping up with the followup, and the activities for a two weeks supply of customers, over a 2-3 week timeframe. Imagine keeping up with four times that many customers over a 6-8 week timeframe!
There are several contact management software applications or CRMs available for real estate professionals. Some of the most popular ones are Top Producer, Agent Office, Market Leader, Salesforce.com (not real estate specific), and Pipeline. All of those applications except Pipeline cost between $50 – $100 per month. Pipeline is free for any of my coaching students.
By the way, our company, FavoriteAgent.com, developed Pipeline. We built it because we had used all of the others and didn’t like their functionality or their prices. I wanted something very simple to use, something robust, and something that could be used from any computer, including my smart phone.
Whichever contact manager you use, you need to use one. Trying to run your real estate practice without a contact manager to help you keep up with all your customers will keep you from ever growing beyond a minimal level of production. Again, a contact manager is a must-have.
OK. That does it for tools. You should be able to assemble the entire arsenal for under $200 per month. And if you use the right tools, they should pay for themselves many times over. In our next segment, we’ll be talking about everyone’s favorite expense — advertising. I’ll show you how you can evaluate every single idea and know for sure whether you should use it, so you won’t want to miss our next installment.