Several years ago Keller Williams did a study to determine if cold calling as a lead generation activity really works. They took 134 agents from 10 geographical areas and had them cold call with a basic script one hour a day for 14 days. They had no experience, no contacts, no database, no marketing, no listings, no “just solds”, just a list of homeowners and their phone numbers.
The results of the study:
- They made 6,264 calls of that 1,037 numbers were not working and 3,450 no answers which translated into 71.6% of the calls failed to reach a person.
- 929 of the people reached said they were not interested (14.8%).
- 132 people asked the agent to call back later.
- 19 appointments were set and the agents received 11 referrals (0.047%)
- So for every 60 people an agent reached (or contacts) they got 1 appointment or referral.
Conclusions of the study:
- If an agent can make 50 calls per hour it will take 6 hours to achieve 1 appointment.
- With a conversion rate of 2 appointments to 1 listing it will take an agent 12 hours of calls to get 1 listing.
- If an average commission is $6,000 that’s $500 an hour (Based on Texas home prices).
- Fatigue factor – by the time agents spent 11 hours callsing all 134 had quit calling.
What’s my takeaway from this? Working the phones is hard work, it is mentally exhausting all of the rejection you will encounter BUT if you can power through that it can be very effective. What other job can you make $500 an hour?
Ben Kinney, a KW Mega Agent, tracked his team phone prospecting numbers and he determined that for every 52 numbers dialed they would get 12 complete calls (23% answer rate) which would translate to 1 appointment. Now they are calling sphere, expireds/FSBOs, and around just listed/just sold, in that order.
Since Jennifer and Susan have helped to renew all of our interest in phone prospecting I thought I would start my new blog with a post on that topic. Now I have no idea where I got this grading system I just found it in one of my numerous journals, so if anybody recognizes it let me know so I can source it.
One way to get better at anything is to measure and quantify it. So here is the 6 categories the author recommends to track:
1) How many minutes are you propsecting without interruptions? The author recommends 50 mins with 10 min break for 3 hours a day.
2) Who’d you call and in what order? Recommends calling 2-3 past clients/sphere, then 2-3 Expired/FSBOs, then 2-3 Old Expireds/Old FSBOs, then 3-5 Just Listed/Just Sold, then 1-2 Follow-Up Calls. Now that is actual contacts not dials. You’ll probably need to make 5 dials to reach one person.
3) Attitude/Approach/Expectation – What’s your attitude on the phone? What’s your approach? What do you expect to accomplish during that hour?
4) Are you using scripts and dialogues or are you just winging it?
5) Did you maintain a high level of energy and intensity?
6) Never take no for an answer with a qualified client, when yes is still possible.
How powerful would your prospecting be if you mastered these six categories and did them on a high level every time?