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Cold calling in real estate is one of those activities that no one likes doing, but that sometimes has to be done. The problem is that most cold calling techniques are flawed. In fact, according to some sources, about 97% of cold calls are a waste of time. This is a huge issue, because, although it is becoming more and more difficult as answer rates plummet and we move completely into the digital age, cold calling still remains one of the best ways to find solid leads and pump more dollars into your business.
Despite this, many people will argue that cold calling in real estate is on its way out, if not already completely dead. There is some truth to this, as the statistics for cold calling don’t look too great. A Keller Center Research Report from Baylor University analyzed more than 6,000 real estate cold calls and concluded that only 28% were answered, with just 1% converting to appointments. I’ve also written in the past about how new, modern marketing channels through emailing, social media, and texting are quickly picking up steam when compared to traditional phone calls.
However, cold calling still has value and produces results for real estate businesses. The same Keller Report also found that for every 209 calls, one appointment was set. Accounting for the time taken for bad and good calls, the estimated time needed to secure one appointment was 7 hours. In a rough ROI sketch for residential brokers, with a 2:1 appointment to listing ratio, the study concluded that they would be working at $387.7 per hour. Keep in mind that this study doesn’t account for calling fatigue and the randomness of leads, but it can serve as a baseline for the value of cold calling in its most isolated form.
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At Smart Inside Sales, we talk a lot about objection handling and how that relates to closing on your calls and being a successful cold caller. After all, caller objections give you the ammunition you need to be able to prove your value to the lead and that you understand where they are coming from, from the lead’s perspective. This means it is very important to recognize and practice common real estate objections and have a consistent strategy for overcoming them.
Before you can even hear an objection, however, you have to first keep the lead from hanging up on you right away. Your first few statements are extremely important. Think about it this way, so few people pick up the phone nowadays, that if you have someone who does pick up, you do not want to mess up this increasingly rare opportunity.
At the very beginning of the phone call, you have to successfully communicate why you are calling them, and why you are calling them when you are calling them. In other words, you have to convince the lead that what you are doing is relevant to them. This means you have to take a long, hard look at your communication strategies to continually improve your successful conversion rate. It’s critical to be informed about your leads, their interests, and to hit them with timely and relevant information.
In order to turn that 97% cold calling stat on its head, you have to be smarter on your calls. Like I just mentioned, a big part of this is proving your relevancy right off the bat. One way to convince the lead they want to be on this particular phone call is to tailor your opening statement to the specific person your speaking to. That means using any and all information you have about the lead to make it more personalized. Take a look at both of these opening statements from real estate agents:
“Hi, my name is Steve and I’m calling to see if you are interested in buying a house.”
This statement is exceptionally boring and instantly communicates the fact that you are making tons of calls a day and don’t have the time or motivation to really understand this specific lead’s situation. You can improve this statement in several ways. First, instead of just starting with “hi”, use the lead’s name. Say “Hi Mike” or “Hi Ashley”—assume the person you are calling is the person who answers the phone.
Next, add something that lets the lead know that you know at least something about their situation. Something like, “Hi Mike, I saw you were looking for homes in Downtown Savannah”. By tailoring your message to the interests and behavior of your leads, you increase your chances of a positive sale. In fact, you’re 51% more likely to achieve your sales numbers and be 80% more productive.
Despite many opinions to the contrary, cold calling can still produce results. The key is, if you can get a lead to answer the phone, to prove that you are someone worth talking to as quickly as possible. Once you show them that you are relevant to their real estate situation, then you can get into how you are able to help them and take on any objections they may throw you at you.