Let’s have a quick discussion about the value of your time. Spoiler alert: it’s very valuable.
We spend a tremendous amount of time here at the Association talking with new agents about effectively prospecting in the early days of their career. It’s tough to get momentum going without an existing book of business, as we all know. It’s even tougher when you’re doing it on a shoestring budget.
Coming into this business undercapitalized is the primary reason new agents fail. If you don’t have the money to both live and prospect for new business, your chances of ending up in a tight spot are high. When you’re undercapitalized, a marketing misstep means your finances are stretched too thin. You’ll either have to dip into personal funds or reduce your marketing expenses. Cutting your marketing can further cut your income, and from there things can begin to spiral. No bueno.
In order to get ahead of this spiral, many new agents look to ultra-low cost methods of prospecting such as cold-calling and door-knocking. Done properly, both of these can result in solid sales. Done wrongly, however, and they’re simply a tremendous waste of time. Here’s the crux of our discussion: when low-cost prospecting methods like this fail, many new agents view that waste of time as though they’ve lost nothing (or, at most, as though they’ve lost whatever small amount of marketing dollars they spent). “Spent a week cold calling and made no sales? Oh well, it only cost me the $50 for unlimited data for the month.”
This is the mentality of an agent who won’t be in business in a year – a week of wasted activity is terrible! What if you’d spent $350 instead and bought a thousand aged leads? Even at a 0.5% closing rate you’d still get five deals out of that, and even at a ridiculously conservative average commission of $200 each you’d see a thousand bucks come back to you. That’s nearly a 3:1 ROI, and I bet you can do better.
The moral of the story: when you’re engaging in low-percentage, low-cost methods of prospecting you must understand that your time isn’t free. A week of cold-calling for no result doesn’t just lose you the cost of the data – it also loses you critically valuable time. That’s tremendously more expensive in both the short and long run for you as an agent. Don’t be afraid of putting a little extra money into your business in order to reduce the amount of prospecting time it takes for you to find a deal. It’ll pay off!