COLD CALLING RESULTS

60 Replies

What's the largest list you ever used to cold call and what were the results?

@David W. This is right up my alley. All we do in my wholesale company is cold call, and I stopped direct mail about a year ago so I have plenty of data, best practices, and insight as it pertains to multiple markets. We are currently cold calling our largest list of leads right now. It's a list of 9054 numbers in 6 cities spread across 3 states. We're targeting high equity absentee lists, code violations, and recently-divorced property owners. To bottom line it, it takes us about 2400 unique leads to get one deal. A lot of people may think it takes forever to cold call this amount of leads in any reasonable amount of time, and that's correct if you don't have the right systems in place. We have an army of trained assistants that tackle around 50-100 leads per day using a rapid dialer so they're able to get through more leads within a shorter period. Also, we expedite the time it takes to get through 2400 leads by sending out voicemail blasts through Slybroadcast.com. It's a great resource, and I use it every day. We have the leads that call back go straight-to-voicemail and if they leave a voicemail, then we call them back. I have an assistant that sits in the pocket all day sourcing these leads and generating offers based on a formula we generated by market. The combination of Slybroadcasting while cold calling is powerful. However, cold calling is something that needs to be done daily to generate great results. Unlike direct mail, your prospect doesn't have a physical reminder of your company so you need to have them on an aggressive followup sequence and/or VM blast campaign. We'll hit the same leads every week for 8 weeks straight and then take a break. This may seem like overkill, but you're only going to be able to touch 40-50% of your list by cold calling. We're currently averaging a 4% response rate across all markets. I'll provide my metrics for one week's worth of calling in our Charleston market below. 

So we placed 436 outbound calls during the week of 9-15 OCT 2017. We consider a response whenever we get connected with an individual and it's the correct number. In this case, we only consider a remove from list request and property for sell inquiry as connects; voicemails that we leave don't count. We received 6 connects and a total of 4 properties for sale, which resulted in a 1.3% response rate. Over the course of a month, this campaign will have a 5.2% response rate, which is way higher than direct mail's average 1% response rate. We'll likely receive one really warm lead that just isn't ready to sell. In this case, we'll followup with this lead every week and place them on an email and text followup sequence, and we'll get the deal under contract the next month.

One thing to note is that you have to cold call in volume and consistently. It takes us roughly 70 dials to get 1 connect! This is why I always, always, always, encourage investors that want to cold call to do large lists, just like you would in direct mail. A lot of them want to "dip their toe in" and "test the waters", but the numbers above tell the whole story. You can't expect to call a list of 100 leads and get a deal, even if it's a drive for dollars list with distressed properties. Please let me know if you'd like for me to clarify anything I stated or want more metrics. I'm a numbers nerd.haha. Monitoring my company's KPIs is my life.

That's gold Cornelius.... Absolutely gold & the reason why I love this site. 

@Shariyf Grevious Howdy Shariyf! Thanks for the kind compliment. I learned a ton off of BP when I first started investing so I like chiming in on the forums to help other people out.

I believe I am going to give them a shot, Cornelius, what is your referral code.  You might as well get the benefit from it.

@Rhonda Dietz I'm not an affiliate and don't have a referral code, Rhonda, but thanks for thinking of me. I'd sign up and shoot out a blast. My voicemail that I send out sounds really personal and doesn't sound like I'm marketing at all. I say "Hey, my name is Ethan (I use my partner's name), and I guess I just missed you. I just bought a property down the road and some neighbors said you might be in the market to sell yours. Please give me a call back if you ever thought about selling." Approximately 35-40% of your list will receive voicemails, and you can expect about a 2-10% response rate depending on the list you market to. Please let me know if you have any questions.

Definitely going to give it a shot!  Thanks a bunch for the idea!

This is from a fascinating study I found online conducted by Baylor University in conjunction with Keller Williams.  The agents are Real Estate Agents:

Over the course of a two-week period in November 2011, 50 participating agents made 6,264 phone-based cold calls, collectively. Of the 6,264 cold calls placed, 28% were answered, 55% were not answered, and 17% were non-working numbers.

While 6,264 calls were placed over the seven-day period, 72% were very quick calls due to nonanswers and non-working phone numbers. Accounting for non-answers and non-working numbers becomes the tedious part of working true cold calling lists. However, the 28% of calls that were completed (1,774) were productive calls.

Out of the 1,774 calls that were answered, agents were able to set a total of 19 appointments with prospective clients, and 11 referrals were received. Agents were asked to call back at a later time by 132 prospective clients, and 1,612 of the callees were not interested in the offering or refused additional information.

What Is My Potential ROI? A Baseline for Comparison

Realistically, the average agent will not be willing to make 6,264 cold calls to achieve outcomes similar to this study. So, the question becomes, “What must I do to achieve a positive return from my cold calling efforts?” 

If we assume that the goal of cold calling is to either set an appointment or receive a referral, then the data help to tell a story of what Return on Investment (ROI) agents might realistically expect to achieve from cold calling.

The study reveals that for every 330 calls made, approximately one appointment was set (a 330:1 call-to-appointment ratio). More relevant to our desired cold calling goal, for every 209 calls made, one appointment was set or referral was received (a 209:1 call-to-appointment-or-referral ratio). 

If we consider that the study indicated 72% of calls made were bad (non-answers or nonworking numbers), then approximately 150 of every 209 calls will be bad. 

Assuming that placing a bad call takes about 1 minute per call (on average), then 150 minutes (or 2.5 hours) will be spent handling bad calls. Consider also that the study indicated 28% of calls made were answered. 

Consequently, 59 of every 209 calls will be answered. If we assume that an answered call takes approximately 5 minutes to complete (on average), then 5 hours will be spent handling answered calls. 

Collectively, we see that it will take an investment of approximately 7.5 hours to complete 209 calls, leading to a return of one appointment or referral. If calls are broken-out across one workweek, agents can expect to make 1.5 hours worth of calls each day for 5 days to secure one appointment or receive one referral – a positive cold calling outcome. 7.5 hours invested to achieve 1 qualified appointment or referral is a relatively strong ROI.

@Cornelius Garland

Just a heads up but make sure you're using best practices when making calls.

1. ALWAYS run the phone numbers through the Federal Do Not Call registry AND the state registry. Fines are anywhere from $16,000 per call Federally and $10,000 per call locally.

2. The FCC bans text messages sent to mobile phones using an auto dialer unless the consumer has given permission to receive the message even if the mobile number is not on any Federal or State Do Not Call list.

3. Robocalls leaving a message on Voice Mail are also prohibited.

There has already been an uptick in attorneys advertising for these type of cases since they are so easy to prove. This is the #1 consumer complaint across the nation. So, attorneys see demand to take these cases on.

@David W. Thank you for posting the study from Baylor above. It makes me want to restructure my assistants' call day in order to get closer to the study's numbers. Are you primarily cold calling in your business? If so, about how many calls are you needing to make to set an appointment? I'd imagine an investor will have a lower ROI purely based on the price we need to purchase a property for, opposed to an agent that can list a property at multiple price points. I'm going to share this with my partner.

As cold calling became our main marketing strategy, I realized that I needed to be mindful of the laws so I read a lot just to make sure I wasn't violating any laws. I always run the numbers through the do not call registry, and my outbound callers' dialers aren't able to dial a number that is on the do not call list. Those fines are steep and taking this extra step is well-worth it. When we send out our texts, we present it as an opt-in opportunity for a prospect to learn about selling their property. What are your thoughts regarding this strategy? We've spoken to our text broadcasting service and they gave us the green light, but I know that this is a gray area. Also, robocalls when leaving a voicemail to anybody or just the do not call list is prohibited? Thank you for your input. I'm always learning on BP!

@Cornelius Garland

I'll try to answer your questions.  If you can return the favor I'd appreciate it.

Are you primarily cold calling in your business?  Yes

If so, about how many calls are you needing to make to set an appointment?  200-250

What are your thoughts regarding this strategy?  Run it by an attorney just to be safe.

We've spoken to our text broadcasting service and they gave us the green light..They are selling a product and not legally savvy (Neither am I but I know this was heavily covered during my RE Licensing course)

robocalls when leaving a voicemail to anybody or just the do not call list is prohibited?  Telephone Consumer Protection Act (TCPA), which prohibits non-emergency calls made with auto-dialers, artificial voices, or prerecorded voices without the "prior express consent of the called party."

My turn

Your agents names seem to be international.  Is it safe to assume that you use off shore agents?

How are you compensating them (hourly, piece work, etc)?

Your previous post indicated a total of 7 agents who made a total of 436 calls.  That's an average of 62 calls per agent.  What was the amount of time it took each agent to make their calls?  I believe you indicated previously that each agent was making about 100 calls per hour but the Baylor study indicates that an agent should be able to make about double that.  Thoughts?

Thanks!!

@David W. Ok, I'll definitely do further research on the text broadcasting. You're correct, they're selling a service so it's not necessarily in their best interest to dissuade me from using their product. Also, thank you for answering the other questions that I asked. It's great seeing another investor track their metrics. I'm always unsure what the standard should be so seeing your numbers is reassuring.

I'll answer your questions below:

We do use international assistants in the Philippines. Sometimes, international workers get a bad rap; however, I discovered the issue is more to do with a lack of training opposed to their accents or location. We use a placement company to vet our account representatives and they go through a month-long crash course on real estate investing before they can even think about speaking to my sellers. During their training, we require them to cold call real estate agents first then the ones that make it past this stage successfully will practice on seller leads underneath the supervision of our development coach. By the time they start calling for us, they can hold their own on the phone.

We compensate hour agents hourly and provide bonuses for deals we've successfully closed for leads that they vet.

In addition to cold calling, they're also looking at the comps near a property to determine if our seller is in the right ball park. Moreover, I require them to scrub our lists throughout their call day and manage our CRM. So they do a little bit of lead management as well. This is what's reducing the call volume and I'm alright with this, for now, because the leads that come to me are pre-vetted, fit our buying criteria (i.e., 3/1, 1100 sqft, SFRs), and my acquisitions team already has an idea of what they can offer. It's more work on the front end, but it makes things smoother on the back end. I give my team a limit to spend on each call based on the lead's motivation. If the lead is not interested, the call shouldn't last more than 30 seconds; they're trained to identify an unmotivated seller within the first couple of seconds. For warm to hot leads, five minutes is the limit, regardless of how motivated the lead is. They're required to gather the essential information so my acquisitions team can develop an offer. Rapport-building comes later through manual and automated email and text followup sequences.

Also, our agents are calling several lists for 6 other markets, and they spend about 2-4 hours calling each market. I have separate reports for the other campaigns. It will probably be easier to analyze my reports and the efficiency of my callers by separating the reports by agent instead of market so I'll probably do that this week. Please let me know if you'd like for me to clarify anything I stated. Great conversation so far.

@Cornelius Garland

How would you define the following words as you use them:

Prospect

Lead

The reason I ask this is related to something I saw on your website and I would prefer to discuss it with you offline of this forum.

I, too, feel that metrics absolutely have to be tracked.  If not, then why would you be in business?  Yet, I believe by reading these forum posts that many, many do not track metrics at all.  That is insanity to me.

Back to the subject though.  So, in the above spreadsheet the bottom line is that of the 436 calls made there were 3 properties that were for sale.  Then, of those 3 properties that were for sale, you then put them through your matrix to determine if any of the 3 were worth putting under contract?

Thanks, and I agree, great conversation so far.

@David W. I have a bad habit of using both prospect and lead interchangeably when I consider them to be two separate things. I use them interchangeably because most investors say "lead" so I use this term to not confuse other investors that I'm speaking with. I define a prospect as all of the names on my lists. The 9045 individuals I'm targeting are prospects. I meant to say individuals/prospects, not numbers, in my earlier post. Out of the 9054 prospects, there are about 16,000 phone numbers between all of them. 

After a prospect is prequalified and has some motivation, then I consider them a lead. The main difference is that I'd consider a lead someone who I'm actively following up with, whether it's through automation or a manual touch. I'm a "don't want-er" and will quickly remove a lead from my CRM if they disqualify themselves. You can shoot me a PM if you'd like to discuss anything on my website. I'm always looking for suggestions to improve it.

Too many investors have the spray and pray mentality and throw ridiculous amounts of money on direct mail, SEO, cold calling, etc without focusing on the issues that are causing their budgets to be so high. If only they analyzed their KPIs and reallocated their expenses, then they could probably slash their budget in half. But hey, I'm just a wholesaler...what do I know? haha

Correct, I identified 4 properties for sale and two individuals that wanted to be removed from our marketing. The 4 properties that came in were all warm leads with one being a warm/hot lead, if that makes sense. The lead was at the right price and motivated but was super attached to the property because they grew up in it. They just need to be touched a few more times by my acquisitions manager to get it under contract. 

Most of our leads are on followup, and that's where our deals primarily come from. I'm sure you can attest to this. The leads still need some vetting when they come in, but the goal of our cold callers is just to filter through the junk. We consider them our first line of defense. I equate it to sending out a yellow letter and then when a prospect calls the number on the letter, they get sent to a two-minute voicemail. If the prospect leaves their information after listening to the long voicemail, then there's some level of motivation there. It's the same concept here: we want our callers to filter out the bad stuff. 

Oftentimes, investors think cold calling is the magic bullet they've been looking for and will magically make all of these motivated seller leads come in their pipeline. It's a grind, just like doing a direct mail marketing campaign. But if it's done effectively and efficiently, then your cost per lead will decrease tremendously. This is what I'm striving towards.

Very very high quality post. 
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Originally posted by @Cornelius Garland :

@David W. This is right up my alley. All we do in my wholesale company is cold call, and I stopped direct mail about a year ago so I have plenty of data, best practices, and insight as it pertains to multiple markets. We are currently cold calling our largest list of leads right now. It's a list of 9054 numbers in 6 cities spread across 3 states. We're targeting high equity absentee lists, code violations, and recently-divorced property owners. To bottom line it, it takes us about 2400 unique leads to get one deal. A lot of people may think it takes forever to cold call this amount of leads in any reasonable amount of time, and that's correct if you don't have the right systems in place. We have an army of trained assistants that tackle around 50-100 leads per day using a rapid dialer so they're able to get through more leads within a shorter period. Also, we expedite the time it takes to get through 2400 leads by sending out voicemail blasts through Slybroadcast.com. It's a great resource, and I use it every day. We have the leads that call back go straight-to-voicemail and if they leave a voicemail, then we call them back. I have an assistant that sits in the pocket all day sourcing these leads and generating offers based on a formula we generated by market. The combination of Slybroadcasting while cold calling is powerful. However, cold calling is something that needs to be done daily to generate great results. Unlike direct mail, your prospect doesn't have a physical reminder of your company so you need to have them on an aggressive followup sequence and/or VM blast campaign. We'll hit the same leads every week for 8 weeks straight and then take a break. This may seem like overkill, but you're only going to be able to touch 40-50% of your list by cold calling. We're currently averaging a 4% response rate across all markets. I'll provide my metrics for one week's worth of calling in our Charleston market below. 

So we placed 436 outbound calls during the week of 9-15 OCT 2017. We consider a response whenever we get connected with an individual and it's the correct number. In this case, we only consider a remove from list request and property for sell inquiry as connects; voicemails that we leave don't count. We received 6 connects and a total of 4 properties for sale, which resulted in a 1.3% response rate. Over the course of a month, this campaign will have a 5.2% response rate, which is way higher than direct mail's average 1% response rate. We'll likely receive one really warm lead that just isn't ready to sell. In this case, we'll followup with this lead every week and place them on an email and text followup sequence, and we'll get the deal under contract the next month.

One thing to note is that you have to cold call in volume and consistently. It takes us roughly 70 dials to get 1 connect! This is why I always, always, always, encourage investors that want to cold call to do large lists, just like you would in direct mail. A lot of them want to "dip their toe in" and "test the waters", but the numbers above tell the whole story. You can't expect to call a list of 100 leads and get a deal, even if it's a drive for dollars list with distressed properties. Please let me know if you'd like for me to clarify anything I stated or want more metrics. I'm a numbers nerd.haha. Monitoring my company's KPIs is my life.

@David W. Honestly in my market we make about 100 calls per month. The reason why it's so low is because out of 100 hundred we get at least one investor who has a large portfolio of rentals that they are looking to offload. In addition we get referrals to other sellers who have packages so we've been pretty busy without having to make much calls. I have never done a DMM campaign and really don't intend to as the leads just from doing good business in the market are so abundant. All the best to you on your REI journey!!!

@Guy Levy Hello Guy, I have a very basic call script for my cold callers. They start the conversation indicating they're local investors looking to buy a property near theirs in "X" city. Then they ask them if they have any properties they've been thinking about selling. While we have the exact property address and name of the seller, we don't mention this on the call because some people get freaked out when you spill all of that on the phone. Our responses are typically more positive since we leave the introduction ambiguous and fairly open-ended. If they're interested in selling, we gather the standard property information, such as the address, beds, baths, square footage, etc. Then our callers will ask the seller for a good time for our acquisitions team to contact them with an offer. After they complete the call, they update the webform and it goes into Podio. Please let me know if you'd like for me to be more specific.

@Cornelius Garland thanks for the info! do you send them an offer without even looking at the property? thanks

@Guy Levy Yes! Our company is pretty much all virtual so our acquisitions managers use Zillow in addition to Rebogateway to develop a cash offer for the property.

@Cornelius Garland   If you don't know how much work the house needs how can you give them an offer?  Why not just send them an offer in the mail without calling them that way you save the time of calling?  

@Guy Levy Great question, and a big reason why we're able to conduct transactions virtually is because our team is very good with analyzing properties and we know our markets well. We use simple formulas to develop our offers. Also, we vet our sellers heavily on the phone to ensure they're providing all of the repairs needed to the home. In some markets that are landlord heavy, we'll take the Zillow or Rentometer average rent and multiply that by 54-57 then subtract our wholesale fee to generate an offer. In other markets where rehabbers are purchasing properties, we typically use the MAO formula or just take the retail value and multiply that by 50% to get our offer.

Regarding repairs, I have another simple formula that I use that works well. I take the square footage of the home and multiply it by 15-30, depending on the condition of the home. If a home just needs cosmetic work and updating, I would multiply the square footage by 15. If there are extensive repairs needed, then I would multiply the square footage by 30. This gives me a large cushion when I present the deal to my buyers. Most of them can renovate the property with probably half of the price I estimated, but it's always safe to be conservative when generating your offer. There's nothing worse than putting your deal out to your buyers and all of their offers are at or slightly above your contract price.

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