Wholesalers, you need to answer the phone!

Phones.  Phones. Phones.

This is the bane of my existence! I know that it is incredibly important to answer a phone.  From my years managing million dollar a year pizza shops, to my year of owning a towing company I know one thing, “You must answer the phone, or you lose money!”

It seems to me that a lot of wholesalers get overly concerned about their time being wasted by tire kickers and their time being wasted trying to vet a lead.  So they use automated systems, or voice-mails to reduce their time commitment. Why would you let any lead, go away.  If someone has spent the time to dial your number that means they have interest!  You’ve just spent money trying to get them to call you, and now you don’t want to talk to them?  Are you insane?

Missed Calls Image
This would cost you over $1000!

I’ve never had a wholesaler answer the phone when I call.  From the multitudes of postcards I get, to Bandit Signs that I see as I am driving an area. How frustrating is it for me to slow down, maybe even turn around and drive by a bandit sign again to get the number and not have someone answer.  You don’t know if I am calling to sell or buy. Less than a handful of the wholesalers I called ever got back to me.

The Cost of Not Answering The Phone

In my decade in the pizza industry I was a proven sales builder.  Often resulting in double-digit annual sales growth in stores where the sales had declined for years.  My secret? Answer the damn phone.  Just pick it up.  That is a sale on the other end of the phone!

Owning the tow company, we had 6 phones.  Dispatch had 2 phones, each driver, and the office manager had a phone.  I wish Google Voice had been around at that time because it could have made what we did a lot easier, but the dispatch phones would ring twice, and then it would bounce through every phone looking for someone to answer. We had to capture that phone call to get a job!  Convoluted as all hell but it worked.  We couldn’t make any money if the phone didn’t ring, and if we didn’t answer it!

The same rings true for being a wholesaler.  Sure you can have them hit your website and put some stuff in but this is a business about relationships. We need the seller to trust us and feel at ease talking to us.  We start that by working hard on our copy, and targeting our lists.  But then we write off the next problem, and that’s converting the lead!

Why don’t wholesalers understand this aspect?  I’m looking at my list and sending out a mailer the list is $300, my mailings are going to cost me $1,000.  At a 1% response rate I’m looking at 16.5 phone calls.  Each time the phone rings it cost me $78.78!  If the phone rings on the second mailing that cost for each of those 16.5 calls has gone up to $157.57.  $236.35 then $315.12 climbing to $393.90 and the last round of a 6 month mailing $472.68 to get the damn phone to ring.  That is pretty damn expensive to send someone to voice-mail or to have the seller have to go through a complicated phone tree. I’m going to tell you a secret though, there’s a greater cost to not answering the phone, the potential to lose a motivated seller.  In my case that could cost me $30,000!  As wholesalers unless you are psychic you don’t know if that phone call is going to make your wholesaling fee.  If you are a psychic, call me! Back to my point, not answering each phone call could cost me between $30,078.78 and $30,472.68!

Goals For My Seller Response System

  1. I don’t want to answer the phone.
  2. I want to operate in different states.
  3. I need to track inbound call leads.
  4. The phone is answered any time it rings.

My Wholesaling Phone Solution

Well that really narrows down my choices pretty significantly. Working backwards, I need a phone number that tracks phone calls.  Google Voice does that, but the problem with google voice is that you can only have 1 number forwarded to each primary phone number.  So you need already need multiple phone lines to get that tracking.  Great for a towing company, but not great for what I want to do.

There are multiple call center type phone answering solutions out there. A quick Bing Search (yes, I’m a Microsoft guy) reveals a huge pool of potential phone answering services.  Other people will be quick to point out that a VA (virtual assistant) may be better.  However, I am looking for someone versed in Real Estate, who is trusted by the community, and will feel more personal. My gut tells me that a VA will not be available 24/7 and I would still need a mechanism to track inbound calls.

PatLive is the most recommended Real Estate Phone Answering Service on BiggerPockets.  It seems that they were conditioned by Ron LeGrand and suggested to his coaching program to use.  They have real estate scripts readily available, and they claim that they have individuals well-trained in the Real Estate Investor arena.

The Cost of Lead Generation

I’ve already talked about the price of not answering the phone.  Let’s talk about the price of having the phone answered.

  • $0.78 Per Phone call for a hosted phone number
    • $12.95 a month / 16.5 phone calls
  • $78.78 per month for each of our 16.5 monthly phone calls
  • $13.43 per phone call withPatLive
    • Assume 10 minutes per call x 16.5 calls = 165 minutes
    • $159.95 PatLive Silver Package
    • $0.95 per minute for the 65 additional minutes
    • Total Monthly Expense: $221.70

The cost to get a single lead in the first month of a direct mail campaign is: $92.99. Don’t forget that cost is going to go up $78.78 per month for each lead. At the end of my 6 month marketing campaign the cost of getting a lead is going to skyrocket up to: $486.89! Which, I should point out is less then the industry accepted $500 fee that you’d pay a Bird Dog to bring you a lead that you close on.

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