by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
I cleaned up my e-mail database this week and was pretty surprised. The lion’s share of our business comes from real estate agents. Many times, I don’t speak with nor hear from an agent for 5-6 months…then…WHAM—I get a loan call. That call always seems to come within two weeks of one of my email newsletters. I understand my numbers pretty well:
- for every California agent, in my database, it results in .6 purchase loans/year
- over 75% of that business comes from agents, in the database, who open at least 50% of my emails (that comprises just 20% of the total number)
Last year, I cleaned up the data base. I whittled the number down to 70 agents. 15 of those agents accounted for 32 purchase loans and 55 agents accounted for 11 purchase loans. If I want to close 72 purchase loans in 2012, I probably need 30 agents, who open at least 50% of my emails. To add those extra 15 agents, I need to meet and add some 75 NEW agents to the database…pretty quickly.
I broke down the content offered, too:
- the highest click-through ratio (55%) came from marketing ideas
- mortgage tips (like how to get a VA offer accepted) generated a 35% click-through
- mortgage rates reports were largely unread (10% click-through)
Agents want to hear how to get more business and then, how to do business properly. Agents just don’t care about mortgage rates. I’ll stop writing those onerous mortgage rates reports (nobody’s reading them and, because their time sensitive, they are more of a short-head). I will start adding marketing ideas to my blog, then use those blog posts for my email newsletter content.
Here’s what I did last night:
- I created a new list, of the serial readers, and named it the “top-gun file”. I’ll add new agents there, check it every 90 days, and move the agents, who are not opening 50% of my emails, to the “general agents” list.
- I pre-loaded weekly emails, for the “top-gun file”, out to April 15, 2012. I want to insure consistency
- The “general agents” file will get a bi-weekly marketing idea. I pre-loaded that content, out to April 15, 2012.
Now I have to “find” 75 new agents, pretty darned quickly. All I have to do is to secure permission to email them weekly. I always tell them that if it annoys them, they can unsubscribe and some do. Most just stop reading. Almost every agent I meet gives me that permission so let’s just say I have to meet 100 agents to secure the permission from the 75 I need. Here are some ideas I have to meet those agents:
Agents who hold open houses talk to buyers. Agents who hold open houses get bored at those open houses. I had 100 “customized lunch boxes” printed, with my name, website, phone number, and a message (TANSTAAFL) on it. I’m going to go to Costco and fill these lunch boxes with a couple of 7-oz water bottles, a bag of pretzels, a bag of peanut-butter crackers, and an apple. I’ll put a bunch of cards in the front pocket, along with a couple of articles about mortgage financing. Then, I’ll deliver them to agents holding open houses, pick up their card, and call them a few days later to see how they liked the lunch box. I’m hoping they’ll ask what TANSTAFFL means so I can transition to the question about receiving my weekly email newsletter.
I attend the weekly pitch sessions and caravan for La Jolla Real Estate Brokers Association and have been invited to the Downtown San Diego pitch session and caravan, too. I’m sponsoring a table for the SDAR Officers’ installation dinner, next month. I figure that I can raffle off 2 tickets to the dinner. Each “entry” will be a business card (and permission to e-mail), at each of those. I might be able to partner up with an agent, who is holding a listing open on caravan, and hold the raffle there while exchanging my TANSTAFFL lunch bags for the business card (and permission to e-mail).
I could probably do a cross-promotion with Bill Lyons of Revestor. I can ask him to “donate” a couple of 90-day “free zip codes” certificates, in addition the 90 day trial he offers (I just gave you a link, Bill so consider that when I ask you). I can also ask him to announce our “joint raffle” to the real estate agents in his database, and have them “enter” online. I should have two extra dinners to contribute to that separate raffle.
Consistency has always been my major challenge; I think I have that fixed until at least April 15, 2012. I think I have a handle on which content “makes the frog jump”. My other challenge is adding emails of quality agents…quickly. Any critique of my current plan or ideas you might have is appreciated.
Jim Wagoner says:
Interesting article. I’ve got a list of close to 100 Realtors in my data base who I email 2-3 times per month. Most I never hear from and sometimes think I should take them off my list. But then, out of the blue, one of them that has never responded calls me with a deal. You just never know when that will happen, so it’s worth keeping them all on the list. It only takes a few seconds to send them an email.
December 10, 2011 — 5:23 pm
Ken Brand says:
Platinum.
December 10, 2011 — 8:21 pm
Mike Mullin says:
Thanks for sharing Brian! That plan sounds pretty solid. I was surprised on the click through stats, and that info will help with my content planning. I was thinking agents would like mortgage info and how it impacts their transactions but you’ve discovered they want “how to” info on their own industry. You’ve probably already done it and not mentioned in your post but you’ll want to see if you can somewhat target those 100 agents to make sure you are adding agents who actually close transactions versus those who don’t. That’s been my downfall in the past. I ended up with a bunch of agents who liked me and wanted my info but they weren’t good agents and had no production to refer. Does your membership in the board of Realtors give you access to production figures? Use that to target the open houses you want to hit so the 100 you add to the list actually have transactions they can refer.
December 11, 2011 — 1:08 pm
Brian Brady says:
“you’ve discovered they want “how to” info on their own industry.”
I’ve seen this in click-throughs for 3 years now. This is the first time I’ve acknowledged and acted upon it.
“target those 100 agents to make sure you are adding agents who actually close transactions versus those who don’t.”
That would help the loans/agent. There is something to be said about the lesser producers–they are very loyal and appreciative. The trick is to be able to stay in front of them without “courting” them; a requirement for many top producers.
“Use that to target the open houses you want to hit so the 100 you add to the list actually have transactions they can refer.”
A lot of top producers are primarily listers. I think if an agent is holding open houses, he/she is going to find buyers. I don’t have access to the production data but I like the idea. Do you think it matters or do you think open house agents are in a position to refer as many purchase loans as the listers, Mike?
Jim makes a good point about the time required to send emails. Once I get the emails scheduled, I can add up to 500 names without incurring more costs and up to 1000 names with a slightly higher cost.
Thanks, Ken. Good luck with the special book price sale.
December 11, 2011 — 4:10 pm
Mike Mullin says:
Brian, I agree with all. I think my context was in trying to help maximize your return from the activities you employ to gain those next 100 agents. You already know how the numbers play out into closed transactions, but hopefully if you can improve the quality of the next 100 your closed transactions per contact will increase. For example, if the current batch of agents in your list were all 100% exclusive buyers’ agents then presumably your ratio is going to fall if the only agents you meet are those sitting on open houses.
Regards the production level of the agents, the agents I was referring to were literally doing NO transactions, yet still taking my time and resources.
I think it is common for there to be a couple of pure listing agents at the top of the heap that might not pay any attention to buyer leads but I’ve got to think that you get down to the top 5-20 agents and even if their primary focus is listing homes, I’ll bet they are paying attention to both sides of a transaction.
December 11, 2011 — 5:07 pm
Brian Brady says:
“Regards the production level of the agents, the agents I was referring to were literally doing NO transactions, yet still taking my time and resources.”
I know about whom you speak. It’s always an unprofitable challenge to help them. They can lean on your for marketing advice, ask you questions best meant for their brokers, and get into transactions which cause a lot of work for you.
“I’ve got to think that you get down to the top 5-20 agents and even if their primary focus is listing homes, I’ll bet they are paying attention to both sides of a transaction.”
I think I agree with that statement. I’ve found those agents are prospected the most by originators. That’s not a bad thing because I have carved out a niche with some of those agents. I don’t mind being the JV originator for them as the varsity originator spends more in time and money on them.
Mike, if you don’t mind sharing in public, can you describe who the perfect agent might be for you (and how many you think you need to sustain a healthy purchase volume) ?
December 11, 2011 — 6:33 pm
Mike Mullin says:
Sharing publicly – that IS a challenge Brian! 🙂 Ok, I’ll give it a shot.
“Perfect” would be an agent that shares the same values I hold, someone that trusts me to do my job, and one who is a professional at what they do.
And someone that I enjoy being around. Someone my wife and I would like to sit down and have dinner with.
And that’s the challenge of the blast email and un-targeted solicitation of a mass of agents because it’s difficult to screen for all that.
The good news is I don’t need many agent partners to sustain a healthy volume. I’m in a low cost of living part of the country and work under a pretty high split scenario with my company. My overhead is probably about $2,000 per month (including office rent) and my wife works as the Processor so that income flows to the household as well. I prefaced with all that because there’s lot of compensation plans out their for lenders and I’m not just an “80% split” guy. The compensation arrangement with your company is huge when considering what kind of volume you need to be happy.
I would be incredibly happy with only about $1,000,000 in monthly production. I can pay my bills and be fine at only $500k a month in closed loans.
As to how many agents it would take to produce that kind of volume that’s a tough guess. I don’t have the metrics on closed transactions per agent in our local market either.
If we are staying with your “perfect” agent theme, my gut tells me it would only take a half dozen good relationships to do the trick.
In reality I’m only looking to augment my current volume so adding any number of “perfect” agents to the mix would be fantastic. And I’m working on it in a targeted fashion for 2012. Facebook is a huge factor in this – particularly the “values” part of the screening because you can typically get a good feel for someone by their posts.
It helps that I’m diversified by holding licenses in two states (WA and CA) so I frequently pick up loans that are twice or three times the average loan balance of Spokane based transactions.
Thanks for the challenge Brian. I hope I didn’t stray too far from what you were looking for in a reply.
December 11, 2011 — 8:02 pm
Chris Johnson says:
Great stuff. You’re underrated.
December 11, 2011 — 10:56 pm
Brian Brady says:
I think we have similar setups, Mike. (compensation and processor). I agree that both of those issues mean a lot to profitability.
I like your definition of the “perfect” agent and agree with the tools you use to “vet” them (Facebook). I wrote some posts here, a couple of years ago, about how valuable social media are to identifying “target” prospects.
I find that the click-throughs show me who is raising their hands or not and that helps me to identify those agents. It’s less targeted than the social media approach but when you have the blunt force of a Chinese Army, why not use it? (the answer to that is that force can produce casualties)
Thanks for playing along. I hope you’ll continue to contribute as I report results. If I produce casualties, I’ll be revisiting your comments here.
December 11, 2011 — 11:00 pm
Jim Klein says:
“But then, out of the blue, one of them that has never responded calls me with a deal.”
FWIW I think that’s a great tip. It’s probably irrelevant for 99% of the agents who take it all as spam, but not for the 1% “cream of the crop” that are the target here.
Those rare birds seek longevity, security and consistency when it comes to both insurance and loans. Ease of mind is a very high value to them, and the right email (gently) targeted over and over can produce that. Just my $ .02.
December 13, 2011 — 2:51 pm
Brian Brady says:
Thanks Chris.
Jim, you’re two cents just made me realize that my emails don’t cost nuthin’. I’ve already done the work by securing permission so who cares if they don’t read them?
Any comments (from anyone here) about the negative impact of continuing to email to the ‘uninterested’?
December 13, 2011 — 7:00 pm
Jim Klein says:
I can think of plenty of negatives…just none for you!
Especially with permission.
December 13, 2011 — 9:09 pm
Bethany says:
Right on target with this one, sometimes people tend to forget the value of email blast. Even if only a small percentage take the time to read them, it is definitely worth the effort!
December 16, 2011 — 8:46 am
Rodil San Mateo says:
Thanks for showing your statistics for this, I always find that useful. What service are you using for your email campaign and to track who opened your messages?
P.S. Love the TANSTAAFL reference (from another Heinlein fan 🙂
December 17, 2011 — 8:53 am
Brian Brady says:
I use ConstantContact.com. It costs about $20-$25/month.
December 18, 2011 — 4:59 pm
Flavio says:
good stats…there is power in email…thanks for sharing
December 20, 2011 — 9:27 am
Robert Kerr says:
Curious, Brian: How do you (or ConstantContact) tell if mail has been opened?
December 25, 2011 — 10:48 pm
Robert Kerr says:
Never mind! The site says it’s a one-pixel GIF. FYI, the mechanism is not reliable, especially with better/smarter e-mail clients w.r.t. spam; your open rates might be significantly higher.
Cheers, Brian, and I wish you a prosperous new year.
December 25, 2011 — 10:51 pm
Brian Brady says:
Good to see your words here again, Robert. I think you may be right about that open rate. People tell me they read my email but CC doesn’t show it as “opened”. I best not eliminate people, from the list, if they aren’t eliminating themselves.
Happy New Year!
December 28, 2011 — 5:02 pm