The Science of Prospecting; Essential reading for any Realtor or mortgage lender.
If you’re a real estate agent, loan officer, or work in sales in any capacity, then prospecting is a way of life.
Cold calling, door knocking, social media posts, email newsletters, mailing postcards, prospecting phone calls, and even open houses are the tools of the trade. In fact, you probably spend the lion’s share of your work week thinking about how you’ll attract new clients – or you should be.
But, too often, prospecting takes a backburner to just about every other task of the modern Realtor or loan officer. While it should be the number one priority for any business that expects to thrive, client outreach still largely remains unfocused, un-quantified, and following no logical strategy.
But imagine if you could rely on scientific data and behavioral studies to refine your prospecting activities into laser focus? The result could help you increase your contact ratios and the value of your leads 100 times over, as well as allowing you to increase qualified leads by 21 times, boosting your revenues exponentially with newfound efficiency.
The comprehensive and cutting-edge study was conducted by James Oldroyd, P.H.D. from the Ohio State University and Faculty Fellow at MIT, as well as David Elkington, the C.E.O. of InsideSales.com. Data was tracked diligently over three years, across multiple companies and industries, tracking 100,000 call attempts and follow up with 15,000 unique leads.
The findings were so profound that it was quickly published in the Harvard Business Review Magazine and shared industry-wide.
The behavioral study set out to learn some critical information about lead management and prospecting web leads. Mountains of data were analyzed with one question in mind: for the best results, when and how should salespeople and companies respond to their leads?
They found that there are four external factors that show the greatest impact on closing qualified leads:
1. Wednesdays and Thursdays are the best days to contact prospects.
The study found that Wednesdays and Thursdays were the two best days to call leads and make contact. The study also found that Tuesdays are the worst days to contact a prospect.
In fact, Thursday is 49 percent better to contact prospects than on a Tuesday, making it the best time of the week to dedicate to prospecting!
Qualifying leads (different than just making first contact with them) is also most fruitful on Wednesdays. In fact, your chances of qualifying a lead on Hump Day are 24.9 percent better than on any given Friday, which is the worst day.
However, Friday wasn’t bad for making contact with a lead – just not the time to qualify them.
2. The best time to call a qualified lead is between 4 pm and 5 pm.
In fact, the study found that calling during that late afternoon hour resulted in 149 percent better closing ratios versus calling at 1 pm to 2 pm.
In general, 4 pm to 6 pm is the best time to make contact with a lead, as it's 114 percent more successful than calling between 11 am and 12 pm (right before lunch time!).
The next best time to call a prospect is between 8 am and 9 am every day.
3. The best time to respond to a lead is within 5 minutes.
It’s common sense that you should call people back as soon as possible, but the urge for recency is even more prevalent with web leads. The study found that just by waiting 10 minutes to call a prospect back, you’re hurting your chances of contacting and qualifying them by 400 percent, and your chances of landing the sale drop by 10x after the first 5 minutes have passed!
Furthermore, the odds of reaching a lead decrease by six times through the first hour, and drop another ten times after the first hour has passed. The study also found that after 20 hours had passed, it wasn't even worth trying to call or contact prospects (unless through some sort of marketing automation like emails, etc.) because you actually might be hurting your chances of making the sale.
Of course, that speaks to web leads, which may be far different than real estate and loan prospects in the real world, but you get the idea – sometimes, it’s better to stop chasing and just wait for them to call you back, instead.
4. Always make at least six call attempts to reach a prospect.
Therefore, most salespeople give up on a lead way too soon – and over 30 percent of qualified leads are never reached at all (although attempts may be made). The study found that just by making a few extra call attempts, the chance of closing the sale increased by 70 percent. The study found that by the sixth attempt to contact a qualified lead, your chances of closing the sale go up 90 percent compared to just making one call.
Point blank; sales people don't make enough attempts to contact their qualified leads before giving up. The study found that while most salespeople will call a lead back one time, only slightly more than 20 percent – or one in five – will call twice. They also discovered that only 10 percent will call three times, and only between 1 and 2 percent of salespeople will call a prospect back a sixth time in an attempt to make contact.
So how does the average company’s sales team stack up?
This survey also found that most companies are falling woefully short when it comes to optimal practices for engaging their prospects. In fact, the average company:
Remember that these statistics are based on web leads, not "warm" referrals, prospects from networking, advertising, or inquiries generated from social media marketing.
But the four fundamentals of lead management probably still apply in some degree when it comes to prospecting for your real estate or mortgage lending business. If nothing else, start tracking the result of your prospecting efforts based on these four variables and see if you find a significant difference, as well!
Email info@REMnorm.com if you have any questions about this study or want to see how you can close more deals.
Download this infographic:
Meet the Millennials (and find out how they're buying, selling, and viewing real estate)
Are you a Realtor or mortgage broker and you're wondering how your clientele will shift over the next one, two, or five years? I’d like you to meet the Millennials, the demographic that’s on the cusp of dominating our population and society – including real estate.
With 83.1 million adults between 18 and 34 years old (born between 1981 and 1997,) Millennials are the largest demographic in U.S. history. They also make up about ¼ of our total population and are projected to make up ¾ of our entire workforce by 2025, or 53.5 million workers.
The common myth over the last five years was that Millennials delayed home buying. But in fact, they constitute close to one-third of all home buyers now, and represent a significant 68% of first-time homebuyers.
Today’s share of home buyers includes 42% Generation X (34-47 years old), 29% Baby Boomers (48-66 years old), and only 29% of Millennials (18-33). (Other data as recent as 2016 has them account for 34% of all home buyers.
50% of Millennials rent on their own,
Only 26% own their home, condominium, etc.,
21% of Millennials still live with their parents,
and 3% live in military or student housing.
But even though Millennials are taking longer to buy a home than generations prior, that doesn’t mean they’ve dismissed real estate ownership.
In fact, 65.3% of this 18-34 group associate home ownership with the American Dream, the highest percentage of any age group! (Interestingly, the 65+ age group was next highest at 63.9%)
In fact, 33.2% of Millennials expect to buy a home within the next 3-5 years, and 91% expect to own a home some day!
What’s holding Millennials back from buying a home?
40% of them are saddled with student loan debt, and the average college graduate with student loans now has more than $29,400 in debt.
In fact, 54% of Millennials cite student loan debt as the biggest obstacle to buying their own home.
Income and a steady job is an issue since 10% of millennials are unemployed, which is almost 4% higher than any other age demographic!
Speaking to that, saving the money for a down payment is the biggest challenge for 23% of Millennials, compared to 13% of all home buyers.
62% of Millennials have less than $1,000 saved, and 21% have nothing saved.
(However, 73% of Millennials are unaware of low down payment options, such as FHA loans.)
Ironically, it’s the high cost of renting that’s keeping many Millennials from being able to save a down payment!
It’s also a lot harder to pool their resources as a couple since only 26% of Millennials are married, which is 10% from the same age group in the past.
This age group is also lagging when it comes to credit score, with an average score of just 624.
What do Millennials want in a house?
According to surveys, the 18-34 age bracket has distinct priorities and needs.
75% of Millennials want a single-family detached home,
11% want a townhome,
4% want to live in a muti-family unit,
and only 3% to live in a manufactured home.
Additionally, 84% of Millennials want 3+ bedrooms, 52% want a 2-story home, only 35% look for a single-story home, and 12% are OK with a split-level home.
46% want a luxury kitchen,
47% want solar panels and efficient energy storage,
75% want new appliances in the home they buy,
and cell reception and fast internet are more likely to influence their decision to pick a certain house.
The top features they look for in a home:
• Laundry room
• Exterior lighting
• Energy-efficient appliances
• Storage options
• Living room
• And front porch
They also want homes they can move right into without fixing or alterations.
For that reason, 48% of Millennials are likely to buy a newly constructed home to avoid renovations or plumbing/roof/electricity problems, compared to 34% of all buyers.
Where Millennials want to live might dispel the perception of large scale urban living, too. In fact,
49% (just about half) want to live in the suburbs,
21% do look to buy in an urban area,
17% want small town living,
13% are looking to live in the country or rural area,
and 1% want to live at a resort (don’t we all!)
They also look to reduce their commute times, with 65% of Millennials saying that a convenient location – even the ability to walk or bike to work – is a big plus.
When it comes time to search for a home to buy, Millennials look online more than any other age bracket (99% compared to 95% for all buyers), and 58% find a home via their mobile device (46% for Gen-Xers, and 33% for Baby Boomers).
But Millennials are also the demographic most likely to purchase a home through a Realtor, with 90% of them using a licensed Real Estate agent.
They’re also more likely to sell faster. In fact, Millennials keep their home for an average of 6 years, far less than the 10-year average for all homeowners.
Only 11% of 18-34 buyers define homeownership as permanent, and 68% see their current home purchase as a stepping-stone towards their dream home (compared to 36% of all buyers).
When it comes time to put a For Sale in the front yard, every homeowner wants the same thing: the highest possible price in the shortest amount of time. That much is universal. But from there, home sellers may diverge in their opinions of how to best reach that goal, as some hire top-notch agents (that usually works best); others employ discounted agents (not so much); and, GASP, a few even try to sell their home themselves (a recipe for disaster).
But home sellers have another important choice to make: to have their home professionally staged or not. And it turns out, a lot of money (yours!) is riding on that decision.
Just consider that last year, about 5,250,000 existing homes sold in the U.S according to the National Association of Realtors. In addition to that number, there were 510,000 newly constructed homes that sold as well. Together, there are about 15,780 home sales every single day in the U.S.
If you’re trying to sell your home, that means you have some SERIOUS competition, all wanting to sell their listing quickly and for top dollar. So how can you stand out?
Of course, and pricing your home accurately is fundamental. But there’s another great way to separate your home from the competition, attract more prospective buyers, sell quicker and for more money: home staging.
In this blog, we’ll cover some of the hard facts, statistics, and data on just how effect home staging is for selling homes quickly while netting sellers far more profit. Based on this third-party independent research, homeowners can make an informed decision whether they should have their home-for-sale staged, and Realtors can present this information to their clients.
What do other Realtors think about home staging?
32% of real estate agents report that staging a home increases the dollar value that buyers are willing to offer by a substantial 1-5%, mainly on medium to high priced listings.
To put that dollar increase due to staging in perspective, that means the sellers would see $3,500 to $17,500 more on a $350,000 home sale!
That’s just a start to the financial benefits of staging, as 16% of real estate agents believe staging actually will increase the price their buyers offer by 6-10% which would be up to $35,000 on that same $350,000 home.
How do most homebuyers feel about staged homes?
Of course, realtors have a great perspective on home staging, but what if we asked those same buyers we’re trying to attract?
In fact, 81% of buyers say it’s easier to visualize themselves living in the home when it’s staged, and 28% overlook the home’s faults when it’s staged.
46% of buyers are more willing to go view and walk through a listing they saw online when it’s staged.
What do buyer’s agents think about the effects of home staging? 49% of agents representing the buyer feel that home staging helps influence most buyers, while 47% feel at least some buyers are affected by staging.
Home staging costs a median of $675 per listing. Of course, it will cost more to properly stage a higher end or luxury home, but it’s important to remember that the ROI will be the same or even better, netting far more for the seller.
How many sellers’ agents recommend staging?
34% Stage all home listings
13% Stage homes that are difficult to sell
4% Stage only high priced listings
44% De-clutter and fix the property only without staging.
Which rooms are most likely to be staged?
1 Living room
3 Master Bedroom
4 Dining Room
6 Children’s Room
7 Guest Bedroom
Who pays for home staging?
62% Seller’s agent offers the home staging services to sellers as part of a full-price commission package.
39% The seller pays to have the home staged before the home is listed.
10% The seller pays the stagers after the home is sold.
3% The real estate agent’s firm pays for home staging services.
How much more are buyers willing to offer for a staged home?
4% Staged home has an increase of 16-20% of the home’s value
8% Staged home has an increase of 11-15% of the home’s value
22% Staged home has an increase of 6-10% of the home’s value
37% Staged home has an increase of 1-5% of the home’s value
10% No impact on dollar value
0% Staged home has a negative impact on price compared to a similar home
19% Not sure
An independent survey showed that staged homes spend only half as many days on market as non-staged homes, and sold for more than 6% above asking price!
Time is money when it comes to selling a home – and staging saves time:
A National Association of Realtors (NAR) study seconded that when it found that the longer a home stays on the market, the further the price drops and the less it will ultimately sell for.
Since 90% of homebuyers first start their search online these days, your listing photos will really stand out and attract more buyers when your home is staged.
The same NAR survey found that the average staged home has an ROI of about 8-10%.
A comprehensive study found that homes that were staged AFTER they were already listed sold in an average of 198 days.
However, when homeowners had their homes staged BEFORE they listed them for sale, these properties sold in only 42 days!
That means homes staged pre-listing sold 79% percent faster than those staged post-listing.
Maybe you had a great year selling homes and closing loans in 2017, but there's a facet of your marketing you shouldn't ignore any more: video marketing. In fact, if you want to make 2018 the best year of your career, double-down on video marketing. In fact, home buyers, sellers, and your social media audience are all looking for your videos more than ever.
We put together some facts, stats, and data about video marketing to help convince you:
Are most real estate agents properly utilizing video?
According to independent statistics, only 15% of agents are using videos for marketing, and only 12% of real estate agents have a YouTube account. But even more telling, of that 12% with a YouTube account, only 5% are active on that platform, creating and posting new video content regularly.
However, 85% of buyers and sellers are looking to work with a real estate agent and company that integrates video as part of their home marketing strategy!
The prevalence of video in our daily lives
Every day, about 100 million people watch video on the Internet in the U.S.
In fact, the average video watcher sees 32.2 videos per month (more than one per day) and spends an average of 24 minutes each day watching them.
Astoundingly, 74% - nearly three-quarters – of all Internet traffic in 2017 will be video!
Why is video so powerful for marketing real estate?
According to Forrester Research, just one minute of video is the equivalent to 1.8 million words to the human brain – about the same amount of content as about 3,600 web pages filled with text!
We also retain what we see in video much better. A study by the Online Publishers Association found that 80% of viewers recall a good portion of the videos they viewed online.
In fact, 8 out of 10 internet users remember a video ad from a website they visited within the past 30 days!
Home buyers LOVE video!
At least four out of ten (40%) of home buyers surveyed say that virtual video tours of a home for sale are “very useful.”
Surveys reveal that 58% of current home buyers are looking for (or even expect!) an online video of the home they’re viewing online.
Even more swaying, research proves that home listings with videos as part of their marketing strategy receive 403% more views and inquiries than listings with no video.
What kinds of real estate videos are buyers looking for?
Home shoppers love watching online videos of the homes they’re considering viewing. In fact, 70% of online buyers watch video tours of the inside of the homes they’re browsing.
But home buyers aren’t just looking for quick videos spanning random listings. Instead, they’re looking for specific and tangible information that will influence their decision to make an offer and buy – or not.
Reportedly, 86% of home buyers use video to research the community they’re thinking of buying in.
Thanks to a tandem study conducted by Google and the National Association of Realtors, we have some key insights into the videos that consumers most want to see.
In their published findings, “The Digital House Hunt: Consumer and Market Trends in Real Estate,” they reported that consumers want to see:
• 86% videos that educate them about the community
• 70% video tours of the homes for sale
• 54% educational videos about the buying and selling process
• 30% testimonial videos from past clients and referral partners, which is important for building trust and a comfort level
• 25% videos about the real estate agent they’re working with and his or her company
Video and mobile are BFFs
For the first time ever, mobile was king. In 2017, social media and Internet browsing on our smartphones and mobile devices surpassed Internet browsing on desktops, laptops, and other devices.
In fact, almost 80% of time spent on social media is now on mobile devices, and we're expected to have 6.1 billion additional smartphone users by 2020.
Home buyers, too, are going mobile, and looking for content, conducting searches, and watching videos on their phones and devices – often on the fly as they go home shopping or walk into an open house.
In fact, consumers these days are watching videos for an average of 1 to 3 minutes on their mobile devices – much longer than on their traditional computers.
Video marketing your listing gets more clicks, likes, and shares
Just by including a video link in an email (such as one promoting new listings), your click-through rate goes up by 200% - which means more exposure for your house for sale.
A fascinating study of consumer behavior actually mapped the eye movements of participants as they browsed the Internet. The study found that when viewing Search Engine Results Pages (SERPs) like Google and others, video results drew and kept our attention at a higher rate than other content.
Google, Bing, Yahoo, and the other search engines also give heavier relevance to video content as they’re algorithms rank them. In fact, once a video reaches the first page of Google rankings, consumers are 41% more likely to click that video thumbnail instead of just a link or photo.
Other real estate video facts:
Where are home buyers are searching for these real estate videos? These are the most popular platforms for buyers, sellers, or anyone interested in real estate videos to find them:
41% Brokerage websites
37% Google results
Want more help with your marketing? Contact us at Sales@REMbulletin.com