Kingston Lane

The Math Behind Online Success

By May 12, 2018 No Comments

Video Transcript

00:02 All right, welcome. Let’s go ahead and get started. My name is Steve Olson. Today I’m going to take you through the math with online lead generation and advertising. Now for those of you guys that are with us live, this is awesome. You’re gonna. Learn a lot about math. I’m going to deconstruct the whole thing and if you want to know one of the things that I’m going to be telling you, some of the overarching stuff that we’re talking about, you’ll want to visit the . And I’ll talk to you guys about four things you should never say to an online lead. More on that a little bit later. So let’s deconstruct the stigma or the, the um, the good and the bad. Everything about online leads and what you need to know right now in regards to how you need to make yourself successful.

00:43 Right? So, um, I’m going to do a bunch of math with you. So if I were you, I’d be writing this stuff down right now. We could, this could take 10 minutes, it could take 30. I have no idea. Let’s just run with it. So, um, I want you guys to start with a budget now before we talk about anything, facebook, Google, paper, all that stuff, like, just lump all of that into one right now. We don’t need to get that specific on what we’re talking about today. I’m just going to give you the math behind the success in regards to what we’re finding are the most successful agents doing right now. So let’s start with a budget right now. I’ll go ahead and erase this, so we have as much a screen real estate as we can. Hopefully you guys can read this with all light here, right? So you just start with a budget, OK?   

01:28 For easy perspective to start with, a thousand bucks, OK? Now, keep in mind everything that I’m going to give you today is based on assumptions. If you know your numbers, and what I would do is I would plug your numbers into this formula and I think that will help you get to a better finality that we will lead to later. Next thing we do is we need to forecast about how much it’s going to cost for everybody to click through on a lead. So we’re going to call this cost per click and we’re going to set that in about thirty five cents. That means every time somebody sees your ad and then formally clicks on it to go where you want them to go, and you’re going to get billed this amount right here. OK, so we spend a thousand dollars. Maybe this is a one day, a five day, a 30 day campaign, whatever. We’re getting thirty five cents per click. So that means the number of clicks that we’re getting right now, are about 2857. So spent a thousand dollars. This is how much we spend per click on a thousand dollar spend. This many people are clicking through to your website. Hopefully that makes sense so far. Um, let’s talk about conversion rate.

02:35 Now, when you hear conversion rate, typically what we hear is how many people turn into a deal. That’s not what conversion rate is in regards to this video conversion rate is of the thousand dollars you spent to [inaudible] people that actually went to your website, how many of them did what you want them to do, how many of them did what she wanted them to do? Uh, to give you guys some ideas. Sometimes it’s forced registration, meaning they see a whole bunch of homes for sale. They click on one of them. It says, Hey, you gotta log in before you look at this. Sometimes it’s a landing page, right? Lot of you guys are running coming soon. Campaigns. We’ve got an amazing coming soon, a platform on ours. Those are having a lot of success with. That’s one page, one email address. Hey, put your email address here. Unlock that. Maybe you’re doing webinars right? Maybe they’re registering for Webinar number one might be some type of a download, right?

03:29 Could be a lead magnet, pdf of some sort, market report, whatever you guys are doing, so whatever you’re sending all these people to, what’s the percentage of conversion you’re going to get based on these outcomes? Most of you guys are writing sites like boomtown commissions, Inc, conversion, click funnels, whatever, and you’re getting somewhere around eight percent conversion, so I’d write down eight percent right now, 28, 57, eight percent conversion. How many registrations do you get? It’s approximately 228. So now of the 200, 2000, 800, 57, excuse me, people that came to your site, 228 of them are the ones that say, hey, yeah, this looks cool. Let me give you my email address and I’ll opt in. These are what we consider leads. Now some people call these like suspects or registrations or leads like I would recommend we call them people because that’s what they are, right?

04:23 But just to keep the terminology straight based on the industry, we’re going to call these leads, but just remember they’re people, right? So you might be asking yourself like, well what if I’m not at eight percent? Maybe I’m running a different platform. Maybe the ads are different. Maybe how I’m squeezing them is a little bit different. What happens if it’s four percent while it’s [inaudible]? Pretty simple, half the conversion have to lean, so that number is going to roughly 114, right? Still Thousand Bucks. Hundred and 14 registrations can’t beat that hundred and 14. We’ve, that’s pretty good. Um, if you are trending around 228, a lot of people want to know your cost per lead. Two hundred and $28 on a thousand dollars. Your average cost per lead is about $4. Thirty eight cents. Some of your markets, this number is much lower. Some of the markets I’m talking to you right now, the number is much higher, but based on these numbers right now to under 20 leads on a thousand dollar spend, you’re spending about $4 and thirty eight cents. So do we have enough to tell an accurate story on lead generation? Know we’re only halfway done, right? Two hundred and 28 leads. What’s the conversion percentage from here to a deal? If you want to get really Ninja, you’re tracking this number to an appointment, you’re attracting VAT number to a contract.

05:45 How many appointments per lead? How many leads per appointment? I’m sorry, how many appointments per deals? That’s where we should be putting. That’s where we shouldn’t be pushing on rather. But uh, let’s get back into the members, right? Good. Overall number right now, if you want to be super conservative to make sure you can take this thousand dollars and turn money. I would be looking at one point five percent leads to closing.

06:11 OK?

06:12 Simple math on 228. It’s going to be somewhere like three points. So let’s call it three deals. So now the average agent thinks, oh, thousand bucks, three deals. That’s pretty cool. I pay a thousand bucks for three deals, but you’re still not telling the whole story. We actually have to get deep in the mud with the, uh, with the numbers. Let’s say you are like most markets, we coach in Tier Two hundred 75,000 times three percent. You’ve got an average commission of about, I think it’s like 80 to 50 or something like that. I was going to check this math. So [inaudible] 50 a deal. If we multiply 80 to 50, that’s $24,700 in commissions GCI. So here’s the question was you spend a thousand bucks to gross 24, 700. Seems obvious, right? What does that. That’s like a 24 x return. That’s a good number. Now listen, we have brokerage splits, we have the cost of advertising, we’ve got salaries, we brought all this stuff, don’t get caught and all that stuff.

07:15 Just top-line money spent versus top-line money earned. Twenty four acts as a really good number. If you want to know what my filter that I put on all online advertising, I want to be able to, within 30 days I want to get a 10 x return on ad spent. In other words, can I spend a thousand dollars and add $10,000 in revenue to the team? Can I spend a thousand dollars and generate $10,000 in revenue for the team on this model right here with the average sales price to 75 or three percent commission, we’re almost at a 24 x return. So that’s, that’s really good, right? So now you should have a pretty good amount of knowledge around how to manipulate these numbers. Like if it’s a four percent, if your market’s at four percent, but don’t beat yourself up over it, that’s totally cool because guess what, with better ad copy, better photos, better videos, better call to action, better buttons, better all of that.

08:13 We can manipulate that number with a better landing page where you can manipulate that number or this number is super easy to manipulate, right? Either spend more or spend less. Now there’s some sweet spots with budget on another video, I’ll cover this because certain markets you can only spend so much money, so sometimes if you were talking to a Ninja ad, a guy, they may not tell you that the answer is spending more money. That might not be the answer. Right? So that’s. That’s really interesting. Better ads, better targeting will impact this number. You should write that down. Better ads, better targeting will impact that number. I’d be spending a lot of time split testing ads over and over and over again because when this fire is it a level 10, everything below sketch better. When this fire is at a level 10, everything below it gets better.

08:59 That’s a really important metric to look at. So do you remember earlier, I want to write these numbers down because that’s really important. Let’s write them down here. Write this down, [inaudible]. Those are total views of the landing page and 228 percent. Those are registration. So I’m gonna. Erase this really quick and I want to give you guys, let’s take it even a step further because this is pretty exciting. Thousand Bucks, thirty five cents, 2057, eight percent conversion to 28 leads, one and a half percent. Conversion equals about three deals, which is 24,700 bucks, 24 x return. Hopefully have that right now. I’m going to erase this

09:40 by the way you guys. Why racing this? If you want to know the top four things that you should never say to an online lead, there’s there’s four big no-nos that a lot of us do. I want you to go to the four knows [inaudible], the, the number four and [inaudible] and you can download that pdf there. That would be really cool. All right, so let’s go to the numbers we just talked about. Hopefully this isn’t too wet to tell you. You use this a lot, this thing, sleep super duty and get a couple of nuances of these. All right, so we know that we have traffic,

10:11 OK,

10:15 traffic is facebook ads, youtube ads, Google, whatever. All these people are here. You want them to go somewhere, so they’re going to go to your landing page, right? Is Your [inaudible] on video? Maybe this is all your homes that they’re clicking on. Whatever it is, right? They’ve got two choices they can make. When they go to that landing page, write number one, they can convert, meaning they can register, they can sign up for your email list, they can register for free search account or number two, they bounce.

10:44 Bounce is an industry term for people that view a website and then leave without taking any action whatsoever. They just closed the window, they closed the tab, whatever, they’re gone, nothing. Nothing’s there. So we know that on 28, 57 a, these are the total views, so 228 of them to [inaudible] cool. One and a half percent of that. We already know at one point five times, we already know that that’s going to grocery about 24,700 that. So you might be asking, well, every thousand bucks this is as good as I can get. No, that’s only part of it. The people that bounce that I’d have to do some math. Twenty to 57. I might have written that. Written that down over there. That is that the CA. I don’t think I did. I did 26, 29. So real quick homework assignment which number’s bigger? Twenty six, 29 to 28.

11:35 So you might be thinking now like, Whoa, that’s a big number. Well they didn’t register. So are they’re not leads. Maybe, maybe not. Maybe they just didn’t like the website. Maybe they don’t like getting contact info. Maybe you showed them the wrong homes. Maybe they looked at a San Diego ad, but really they’re, they’re thinking about buying in south orange county or something like that. There was some level of integrity that they were not in the cause. Them not to register. So knowing that this number is bigger than this number, what do we do now? I’m not going to get super deep. I’ll give you guys another video about this and what I would do with this, but let me, let me just bait this a little bit. Number one, write down facebook remarketing there a way based on snippets of code that you can put on your website or even in the APP and you can say, hey, if they went to this landing page and they didn’t take my desired action, uh, there in this bounce group, how can I advertise to those? Next one, I would look into

12:26 instagram, remarketing. Youtube,

12:32 we marketing. This is a big one. You can never see those five second videos before you’re watching what you’re really there to watch. This is huge and it’s super cheap. It’s so freaking cheap. Last one,

12:43 Google display remarketing.

12:48 I’ve awesome handwriting. I know you guys are all thinking about right now, so just imagine a thousand bucks, one and a half times return. I’m sorry, what did have times conversion? Twenty 4,700 gross return and that’s only what? Two hundred and 28 people, and guess what? That’s a ton of manual labor. That’s phone calls, that’s emails, that’s you know, bombom messages. That’s it’s everything that we have to get in front of them, right? Twenty six, 29, that’s a much bigger group and we can do this by almost automating the whole process. I’ve looked into this, I googled this. This stuff’s not hard. It’s just, it’s very process driven. It’s very clicky. Click do this, do this, do this, do this, but what I know is this is a much bigger list. Then this one right? Doesn’t mean they’re more motivated. Doesn’t mean they’re not as motivated. It doesn’t mean they’re motivated. All it just means it’s a bigger list and once you already have the people in this list, this type of advertising

13:41 become super, super, super cheap. So if you have any questions, I’d be really interested to hear what they are. Do me a favor below this, just give me a comment, let me know questions or I’ll answer those for you right in the comment thread a. But here’s what I would do if I were you. If you’re an agent, like most of the agents that are on our platform or others that we coach or any of them that we just know overall, we know that they are really, really, really good at scripts and dialogs. Those are the ones blowing by the one and a half percent conversion rate. If you want to know the four things that you should never say to an online lead or to a registration or to somebody you never know, go to the number four, the four no’s dot com. And Download our exclusive pdf that shows you the four biggest mistakes that most agents are making when they talk to online mean. So, uh, that’s up for today. I hope you guys found a lot of value in this. Remember, this list is a great. That science is a great size. This is an amazing return, but most of you guys are missing that opportunity. OK? Stay tuned for another video. I’ll show you how to deconstruct this whole thing and we’ll pour gas on that. OK, my name is Steve Olson, president of Kingston lame. I’ll see on the next video.

Steve Olson

Steve Olson

Steve Olson is the President of Kingston Lane and an award-winning veteran of the Real Estate industry. Not only have him and his teams been involved over a thousand homes across markets, he has personally conducted over 7000 coaching calls to some of the highest producing real estate agents across North America which are collectively selling more than $1 Billion annually. You can connect with Steve on facebook and through his podcast, The Steve Olson Show.