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June 22, 2011

Is cold calling effective or useless?

by mark mclean

Here is a great article courtesy of REMonline.com

By Toby Welch

Cold calling is something Realtors either love to do or avoid at all costs. If you would prefer having a root canal to doing cold calls, a slight shift in thinking may be all you need. Instead of thinking of them as cold calls, find a positive word for it. Perhaps ‘marketing calls’ or ‘direct calls’ or even ‘money-making calls’ might make the task a little easier.

Mike Cartwright, broker of record at Main Street Realty in Newmarket, Ont., says over the years he has had great success with cold calling.

“The key to cold calling is the consistency of contact. I have listed and sold many homes from this type of prospecting,” he says. “To be effective, you need to set a goal of how many contacts you want each day. In my case, my goal is to talk to 30 people per day.  I cold call in the morning between nine and 12.  I find if you wait until the afternoon, something will come up and get in your way. I track all my calls daily on my tracking sheet, so I can keep track of where I am in terms of reaching my daily goals. ”

Cartwright continues, “For new Realtors, the idea of cold calling terrifies them. The reason is nobody likes rejection but you just have to realize two things:

“1) Start the day thinking, ‘I have to get 29 no’s before I hear one yes.’

“2) Once you are successful at cold calling and get a lead that leads to a listing and then a sale, take the money you earned and divide it by the number of people you talked to. That will tell you how much you earned with every phone call you made.

Mike Cartwright

“For example, I sold a house and made $5,000. I talked to 450 people to get that sale. That means I made $11.11 for every person I talked to. For the person who is terrified to cold call, just keep in mind that for every person that you call who says no, you made $11.11. Not a bad wage for a ‘no’. ”

When you pick up the phone, don’t go into the call thinking that you are going to try and sell yourself. You are actually going to offer your time and your knowledge of the real estate industry. Instead of asking the person on the other end of the phone if they are thinking of selling, ask them if they know anyone who is thinking of selling. Through trial and error you’ll come up with a conversation that works and gets you leads that end with sales. The key to effective and successful cold calling is having the right attitude.

Michele Skawski, a sales representative with RRSI Realty in the Caledon and Brampton area of Ontario, does not do cold calls.

But while Skawski doesn’t cold call, she does do warm calling.

“By warm calling, I mean the person I am contacting has some frame of reference to me,” she says.

Michele Skawski

“People are inundated with advertising messages through TV, mail, the Internet and the phone; they have learned to tune it all out,” she says. “I think when we cold call, we put ourselves right into that category. I have cold called around listings, using the listing as a frame of reference, and found this to be a waste of time. When I put a plan together to contact the people at least three times (creating a warm calling environment), the results improved. I did a combination of:

– “An unaddressed ad mail post card introducing the house for sale;

– “Door knocked with the same marketing piece, introducing myself and asking if they had any friends or relatives who might be interested in moving into the neighbourhood, as well as asking if they were considering making a move;

– “Then a follow-up call (if possible) or another door knocking campaign to tell them it was sold and to see if they had any interest in selling or knew of anyone else who might be interested in moving because I had more buyers for the neighbourhood.

“Again, you are better off contacting 100 people at least three times than 1,000 people once.

“Whatever you do, consistent, ongoing communication is the key. You are better off communicating regularly with a small group than sporadically with a larger group. Make sure the communication has content that is valuable and relevant. When I started down this path, my broker said that the content of communication didn’t matter that much, it was simply the point of getting your name in front of the people. With experience, I have found that providing valuable and relevant information is a lot more effective. ”

When cold calling, keep in mind the nationwide Do-Not-Call List. The CREA handout, The National Do-Not-Call List: Information for Realtors, makes it clear that as a Realtor soliciting business, you cannot call or fax people without prior consent. If someone has registered on the DNCL, you can only call them if you already have an existing relationship with the customer or individual. Before cold calling, check to see if the number you are about to dial is on the DNCL. Additionally, every broker office is required to keep their own Do-Not-Call list of people who have asked to be put on the list. Everyone who works for the office needs to have access to the list at any time.

Skawski shares some final thoughts: “People come into real estate thinking there is fast money in it. There will be opportunities to make some money quickly but for staying power, you need a longer-term vision as well. Connecting with people over time and in a way that differentiates you from all the others is the best way to create a successful business. ”

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