In response to a question I was asked on my post entitled, "When There's No Wind, Row!",I decided rather than respond at the remarks portion of my post, I would share my answer with all of you who care to hear how at least one person knows it works, having tried it, worked it, seen it work, helped others work it, and watched other succeed in it. I do this because maybe it will help someone jump start their career, get it on track, keep it on track, enjoy the fruits of their hard work, and be able to have the personal satisfaction of having succeeded in a wonderful business like ours, by sticking to what works through thick and thin.
The question posed was, "Being very new to the business and having no sphere or family to rely on I am finding that this (making contacts) is a great way to make it all happen. Of course I am learning to deal with rejection but I will overcome that. How many people did you try to get in front of either by phone or in person a day?"
For the people who work with me, they know my answer, they've heard it a thousand times. For those of you who havem't benefited from the experience, here's how it works, and it's not rocket science.
For each 25 calls or contacts you make, you will get decent one lead.
For each 3 decent leads you get, you'll get one appointment.
For each 3 appointments you get, you'll get one listing.
For each 2 listings you get, you'll have at least one closing.
Do the math, and you will find that it takes 450 contacts to get one closing. If your average commission is, say 4500, then you earn $10 for each contact you make, on average, whether they say yes, no, maybe, or tell you things about your parents you never knew. Now, there are some ground rules. First, a contact is a contact. Leaving a message doesn't count, licking an envelope, petting a dog, etc, none of these count. Only human interaction. Voice to voice, face to face, they are good. Everything else is a follow up call you have to make later.
The fact is, your economic driver is appointments, and there are an assortment of things that can skew the numbers. Your talents on the phone or door knocking (its important to always comply with the DNC list and local door knocking ordinances) will get better as you do and learn more, your appointment and conversion ratios will increase, etc, and all these will make your numbers go from leaner to more robust. Keep doing the basics, have a business plan, know your numbers and stick to them.
So, the numbers for the model I described above are simply, if I want to make $100,000 on listings, and my average value of the phone call is $10 (based on the numbers above), I have to make 10,000 contacts for the year. Sound like a lot? Lets drill it down. 10,000 contacts, divided by 50 weeks a year (you're entitled to at least two nice weeks off if you do it right), is 200 contacts per week, divided by 4 days per week (you should also have a day off during the week for yourself, since you need to be available Saturdays to show homes) equals 50 contacts a day. Does that still sound like a lot? Well, truth be told, it is a lot, but it is a do-able a lot. When I started in the business, my average sale (in the late 1970's) was in the mid 30,000 range, and the average agents listing side was about 500 and change. I wanted to make $100 a day back then , which was pretty good in those days, especially for a 19 year old, which is what I was when I first got licensed. I figured out the numbers, and then figured out that to make my $100 at listings, I would need to make app 75 calls a day at a value of $1.40 per call on average. Now that was a lot of calls, I know because I tried to make them every day, and almost did, every day, 4 days a week, 50 weeks a year, until my business took off.
The moral of the story for you, Cody, the (current) new agent who asked the question and who sounds like he's not afraid to work, and for any one else who cares to be consistent and busy, is to figure out how much your average commission is, how many of those you have to do to reach your monetary goal, and then divide them by 450 calls per closed listing, divide by 50 weeks, 5 days, and then get to work.