Presented by Ylopo’s Co-Founders, Howard Tager (CEO) and Juefeng Ge (CMO).
[00:35] Intro
One of the issues that I always have in the real estate industry is that it seems like a lot of agents are just always like, living high one month and then low in another month. They’re always chasing commission checks, which is why everybody eventually wants to get out of production. But a lot of folks are kinda stuck in production for a really, really long time because they haven’t built a long-term asset.
If I got hit by a bus, Ylopo will still move on. I’ve built an organization that lives beyond me. We’ve got a great team—great executive team, great CS staff, great digital marketers, great technology group. I’ve built value that is beyond me. And what I want to teach you is you can build value beyond you having to personally chase commission checks every single day for the rest of your life.
[01:33] “A Diamond is Forever”
I basically got this (A Database is Forever) from the phrase “A Diamond is Forever”, which was voted the #1 ad slogan of the 20th century. This was developed by the De Beers corporation. No one really knows this, but prior to WWII, only 10 percent of all engagement rings had diamonds. That number now is 87 percent: 87 percent of all engagement rings have diamonds. This is like a very purposeful thing that happened over time.
The “A Diamond is Forever” slogan was developed for two reasons: a) to make sure that all people always put diamonds in engagement rings; b) to make sure people never sold their diamonds. Because they knew, if people bought diamonds and then they broke up or whatever and they eventually sold their diamonds, the price of diamonds would plummet. So they literally built a forever income-producing machine with this #1 ad slogan that was ever invented.
[02:53] How To Build Your Own Long-Term Money-Making Machine
Basically, it’s time to more than double the value of your business by doubling, tripling, quadrupling the size of your database.
I hate the word “leads”— leads are relationships. They are relationships that you start now that you can now have forever because of the nurture technology that we now can give you. You need to keep building a larger database of “relationships” that you can always stay 24/7 top of mind so you can create a never-ending pipeline of transactions.
[03:37] The Importance of Building Your Database: “The Money Shot”
This shows you, as you build your database from 5k leads to 25k leads, to 50k leads to 100k leads, you can go to building an annual GCI of $114k, all the way to $2.3M. And this is pure science. So this is how you say to yourself, “If I invest in my business”, “If I create a goal”, “If I’m constantly building my database,” over time, “I don’t even need to buy leads anymore; I can live off of my database.”
[04:20] The Importance of Building Your Database: “The Leader”
Robert Slack, one of our largest clients in the database, is a living example of the importance of building your database. He currently spends six figures a month on lead generation. He spends a bunch of money with Ylopo, he spends a lot of money with the portals. His current database is now close to 800k leads, which is absolutely enormous.
He sold over 1,000 homes in 2017, $254M worth; sold over 2500 homes in 2018, $600M worth of homes; almost 4k homes in 2019, almost $1B in 2019. And he’s gonna go way over $1B this year, well over 5k homes sold in 2020. He said, “Howard, my goal is to build our database of 2M leads and I’ll never buy another lead again.”
And when I show you the numbers, you’ll see why he will go from spending six figures a month to spending nothing a month on new lead generation.
[05:25] Ylopo’s Lead Generation and Lead Nurture Philosophy
Our Ylopo client Mike Novak said, “I’m going into real estate for three years, and decided early on to commit to building as large of a database as possible. We started using Ylopo new lead gen to generate inexpensive new leads and then re-target them over a long period of time. The result has been a significant decrease in our overall new lead gen span and we’re creating 2k-3k priority alerts per month, which convert better than any lead source we’ve ever had. We are methodical on our follow up with priority alerts and call, text, email, voicemail every one of them, as applying an automated messaging plan as well.”
Two superstar clients were showing you the power of what happens if you invest in yourself.
Think about how much money it would cost if you wanted to start a restaurant, or like a really fancy bar. We’re talking about six or seven figures, it’s crazy. And most realtors don’t think about their business in that way — spend $2000 a month, spend $3000 a month—you’ve got over five years and you’re gonna build an enormous database.
How much do realtors spend on marketing? According to research, we saw that 66 percent of agents spend less than $10k a year. Only seven percent spend more than $40k a year.
This can give you the leg up if you’re willing to spend. You also need to spend because, look at what the likes of Zillow is spending. According to Zillow’s annual report in sales and marketing, marketing expenses were half a billion dollars in just 2018, and it keeps going up. So how do you compete with the Zillows in the world?
Now, multiply what Zillow spends by what Realtor.com spends, Redfin, Homelight, Opendoor, and the list goes on and on. But you have the technology with us to beat them in their own game.
What we’ve designed is a system where we are fishing these “relationships”, we’re fishing them out of the river, out of the stream early on in the process before they get to the masses; before they get to the Zillows and the Realtor.coms.
Every relationship is in a stage. They might just be in the “Aspiring” stage–they’re dreaming, they’re thinking about a home. That’s 12 months out. A lot of folks will complain to us that they’re 12 months out. Do you want to wait until they’re already in the “Zillow fish bowl,” or do you want to fish them out of the stream, put them in your fish bowl, or if you’re investing in Ylopo, you have the nurture technology to keep them in your fish bowl.
They will move eventually to six months out (“The Researchers”) and now they’re gonna start researching. We have the system where you can see that they’ve moved from aspiring to researching because their home search activity has elevated. And you will get alerts from us that their home search activity has elevated.
They will then move to the “Ready to Transact” stage—0-3 months. One of Ylopo’s superstar clients and Ylopo professor Mike Bernier framed this whole thing of Aspirers, Researchers, Ready to Transact: we’re moving them along the fish bowl, but you have the technology to see this.
[08:41] A Great Home Search Experience is Critical
It all starts with having great home search. We are investing very heavily right now in improving the home search experience. We’ve invested well in the high six figures in completely redesigning our home search website. That’s already taken six months to design out, and we’re in the process of building it. In the next 2-4 months, you’re gonna see kind of a progressive roll out on this.
We’ve thought about this really deeply. All of that new lead generation that we do, all that nurture we do, they’re driving people back to your site. So your home search is critical. And we see all of these companies who built it a long time ago, and they just don’t invest in it. They don’t change it. And we are willing to spend six, seven figures to constantly improve that home search experience. And it’s never gonna end.
Here’s the whole flow: we’re getting all of our leads—Ylopo leads, SOI leads, Open House, portal leads, Google, Craigslist—everything is going into this fish bowl. And they might be lightly searching at first or the Aspirers, but then we’re gonna be dynamically remarketing to them, selling them Listing Alerts, and we’re moving them along. And now, all of a sudden their search has been elevated over time when they’re ready. They’re gonna love certain homes like three or four times, they’re gonna send homes to their siblings and others, they’re gonna favor homes. They’re just gonna spend more time on the search site. Every one of these actions will trigger YPriority Alerts to you, tapping you on the shoulder, this is a better lead for you to focus on than just all the leads.
Now we keep moving them along. And we notice all the stuff that they’re doing, so now we’re sending them text messages—behavioral texting, Raiya is engaging them in conversations. We’re getting them even closer. Now you’ve got to watch those conversations. You’ve got to push listings to them, you’ve got to turn Raiya off and you start talking to them to get the face-to-face appointments. This is a really critical slide. As you can see, you’ve got to be patient; invest in this process. Let the leads mature three months, six months, nine months, 12 months… I love it when I get a story from a client who’s like, “Okay, I just closed a $700 buyer and they were in our fish bowl for like, three years.” To me, that’s not a bad thing. That’s a really cool thing. Our text is working, it’s keeping them close to you. Everything is about that: the dynamic listing alerts, dynamic remarketing, Raiya, the DyVA ads, it’s all about keeping you guys front and center. You have technology that no one else has.
A great home search experience is critical. Everything happens there. It’s the incubator to keep folks in your fish bowl. It’s all going in there. Get your offline leads, your Open House leads, get your referrals. Take your home search experience and put it in a bunch of different branded sites. All the social media leads. We can set up any other lead source on auto-import. We’re doing a mass import of your old leads from other databases, auto-import of other lead streams. We’re always thinking of ways of getting paid and free of home organic leads into this Ylopo nurture system.
[12:10] Ylopo Client Example: Realty Group
Long and Mike from RG Realty at MN – they’re an example of somebody who tried us, they thought we sucked, they left. Then came back to us. And now it was a combination of two things. We weren’t great when they first started with us, but we keep getting better and better over time. And then they came back with a whole new mindset about what to do.
And now, Mike and Long have shown in a really cool slide (from Summit) how they get everything into the Ylopo nurture machine. They are every other tool out there. They’re getting all of these leads into this home search incubation system so that all of our lead nurture technology can happen.
And then look what happens: new leads that last 30 days = 345. Total conversations = 118. Total appointments = 35. Total closings = 14. Total agents = 10. Total closings = 160.
That shows what they’re doing all the time now that they really understand the longer-term nurture part of what we’re doing.
[13:22] What To Do if You Already Have A Solid Database
You want to revisit and audit your current database in terms of remarketing and your nurture system. If you have a decent size database, you want to make sure that everyone is correctly on the Dynamic Listing Alerts, Remarketing, Priority Alerts, AI-assisted text communication. Make sure all this is working. If you don’t think something is working correctly, talk to your account manager at Ylopo.
I could show you a case study of someone who came to us with a large database. And we looked at what was happening prior to us starting our sophisticated remarketing with this client. They had 48k+ leads in their database. Their total monthly website visits was 2319, so they were getting a 4.8 percent Return to Site rate.
Once we initiated the Dynamic Remarketing plus Raiya, their 48k database, their total monthly website visits went up to almost 9k. Their Priority Alerts, which didn’t even exist, went to almost 2000. That’s a 20 percent Priority Alert rate and 18.5 percent Return to Site rate, a 385 percent increase once we got the month of the dynamic remarketing.
The point of the story is, get that Dynamic Remarketing. Check in with your account manager, check in with Ylopo marketing: do you have enough dough on your remarketing. Are you spending enough? If we say, roughly like, $75-$100 for 1000 leads in your database, should be your remarketing budget.
If you can get your database to 5k leads, you’re gonna get 1000 folks that are coming back to visit your website; 180 priority alerts, that’s 18 percent. For probable Buyer/Seller, you’re gonna basically work with these people at some point. But in terms of that month, that 30-day experience, you’re gonna actually close 1.5 of them. This is not theoretical data—this is actual case study data from our clients. We’re not just pulling these—we’ve got the data across all of our clients.
Now look what happens if you say you’re gonna build 5k leads for 5 years. I’m gonna invest in myself; invest in my business. I’m not gonna chase my tail forever. I’m gonna build something of perpetual value. Now I have a 25k lead database. That’s 5k website visits a month; almost 1k priority alerts a month. It’s 45 people that you will work with, and now it’s 7.5 deals a month.
For 50k leads: 10,000 website visits a month; 1800 priority alerts; 90 people you’re gonna work with; 15 deals a month.
For a really, really big number to aspire to: 100k leads in your database – 20k website visits a month; 3600 priority alerts; 180 people you’ll work with; 30 deals a month.
[16:57] The Importance of Building Your Database: “The Money Shot” (Part 2)
Based on the science that is all the data we’re collecting, what happens when you go from a 5k lead database to a 25k lead database, to a 50k lead database, to a 100k. These are the actual numbers you’re gonna get; these are the probably buyers/sellers; these are gonna be the closed deals.
Now, let’s take a look at your costs. We know, based upon these sizes, what your monthly remarketing cost is gonna be; what your monthly Raiya cost is going to be; what your likely platform is gonna be. Remember, these numbers: zero lead gen. So we’re saying, “Okay, now you’ve got a 25k leads, now you’re turning your lead gen number off.” You’ve got a big remarketing spend which is important, you’ve got a big Raiya spend, which is important. So these are your total costs. If the average price of the home you’re selling is $250,000, there’s your gross monthly sales. If your average commission is not 3 percent, it’s 2.5 percent, there’s your GCI. Your GCI less your costs, there’s your net profit. And there’s your ROI on your nurture investment. It’s off the charts. Your annual gross commission income will go from $115,000 to $2.3M a year when you build your database to 100k leads.
And we didn’t even know this until we’ve really drilled down into the conversion numbers, as well as the cost numbers. The ROI on this is amazing.
So stare at this, put this up on your board, dream about this, but you can do this. ‘Cause Mike Novak’s doing it; Robert Slack’s doing it; Bernier and Long are doing it; Brian Curtis is doing it; Barry Jenkins is doing it. You can do this, but you need to invest into building that database.
[18:47] Set A Goal and Make A Plan!
Build that 25k lead database at a minimum of five years.
Here’s the good news: if you did a 100 percent lead acquisition, meaning that you’re paying for all those leads, here’s the length of time you would need if you were solely social, or solely Google PPC, or solely portals.
Let’s take an equal amount. Your annual spend is $30k, so you’re gonna spend $2500 a month. If you spend $2500 a month on the portals, and we say, generously, that your cost per lead is only $75. We’re super generous and we say that your close rate is 4 percent. So you’re gonna get 400 leads per year. You’re gonna do 16 deals a year, average home price $250k; average commission at 2.5 percent; annual GCI would be $100k. Your gross profit is $70k, your ROI is 233 percent. The number of leads in your database, though, is only gonna be 2k after five years. So the number of years you’re gonna need to build a 25k lead database is 62.5 years.
For Google PPC: same deal. Google PPC across the nation, we’re looking at $12 a lead. Let’s say we take that conversion rate way down, take it down to 1 percent. You’re still spending your $30k or $2500 a month. Now, you’re gonna get 2500 leads a year; 25 deals a year, again, same other math. Your ROI is gonna be 421 percent. Your number of leads in your database is going to be 12,500 after five years. You’re gonna need 10 years if you want strictly $30k a year on Google PPC.
Now we go pure social: $6 a lead; conversion rate, we’re gonna say, only 0.5 percent; annual spend is $30k. Number of leads acquired per year is 5k. So this is what Mike Novak was doing. His number of deals is 25, just like with the Google PPC. Same average home price, same GCI, same annual GCI, same gross profit, same return on internet marketing investment. But, after five years, he’s got 25k leads in his database that he now can turn that nurture machine on. So it’ll only take him five years.
We want you to have a mixed of all the different types of leads because they all have different buyer timeframes.
If you’re in, like, a Florida market where 90 percent of your clients come from out of town, you’ve got to be all-in on Google PPC because it’s amazing for out of town. If you’re in an area where 90+ percent are from where you live, you want to do both. You are strangling your market. You want to build a giant database? You’ve got to be all-in on social. You want to sprinkle some Google PPC, in my opinion, you should do both.
[22:05] How To Build Up A Massive Number of Free “Organic” Leads
We don’t actually want you to just always spend your marketing dollars with us. We also want to be part of a mastermind, of a success community, where we can share ideas about how to also create free leads and get more leads into the Ylopo nurture system.
Doing sphere imports: for example from Linkedin. A lot of people don’t know this, but we actually have that feature back on now for Linkedin. We’re actually making progress on having that back on Facebook as well. If you go to www.ylopo.com/sphereimport, you’ll be able to fill out a form or you’ll be able to go into your Linkedin and download the connections that you’ve built. All of those are free organic leads. Just make that as a note; try to do that as soon as you can because who knows when these channels turn off the ability for us to do that.
Leveraging third party data sources like Cole Realty, Remine, etc.
Using your Open House app.
Using your main website and your team member’s sub-sites. Remember, we can give a home search subdomain to every single one of the team members so they can get people they need into the home search experience.