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Friday, May 11, 2012

The biggest cost to your real estate business

How much does your real estate business cost you in a year?

Are you paying to have a nice office?

Do you have a new laptop?

What about a cell phone? Data package? Tablet?

Do you invest in advertising? Do you have a print budget, or dish out for yard signs? Do you pay extra to put your name, face and phone number around town?

Odds are, you fairly recently analyzed what you spent last year as you prepared your taxes and the oh-so-many write-offs that helped alleviate your tax burden, if just a little.

You saved receipts and tracked mileage. You added up expenses and analyzed investments.

And when all was said and done, you (or your accountant) painted a fair portrait of your costs in a year.

What you likely didn’t review are the costs you didn’t see.

How could you? You can’t see them.

Those are the costs that are nearly impossible to measure. But they’re also the costs that could be costing you the most.

Those are your opportunity costs, and they’re calculated by the profits you miss out on.

Miss out on a potential sale because you were busy doing paperwork? That’s an opportunity cost.

Turn over a lead you thought wouldn’t amount to anything so you could leave the office early, only to find the rookie agent you handed it to is working the paperwork for the deal? Another opportunity cost.

But many agents don’t even get a fair calculation of the sales they calculated missing.

Sometimes opportunity costs can be as simple as not realizing the leads that are already there. Sometimes they can be as easy as better communicating with the contacts you assumed weren’t interested at the time.

The best way to minimize your opportunity costs is to engage with your customers. That doesn’t just mean those who recently bought from you, and it certainly doesn’t just mean those who are close to doing so.

While those customers need engagement too, they’re more likely to get it because you’re more likely to assume they’re about to buy. But the biggest opportunities might be missed amongst the customers you don’t even consider as such.

How many leads from the past two years have you recently called? Can you say for certain their circumstances haven’t changed?

Do you have contacts who simply created portfolios on your website to receive email updates of homes for sale? Those might be customers too. When was the last time you reached out to them? How do they know you can provide a benefit to them as their agent?

Engaging with your customers is the surest sign to find what they’re sure of. Agents often assume a portfolio isn’t as serious of a lead because the customer didn’t reach out. They often think a customer that didn’t respond at the first few attempts is only “kicking tires.” And many think because a customer didn’t provide many details on a Web request they don’t want to be bothered.

That might be true with many customers, but many customers created online accounts for a reason. They’re doing their homework and they don’t want to be sold to. But they want to know there’s someone educated who will help them make the right decision in the best manner when the time is right.

And that step starts with engagement. Not just any engagement, but the right kind of engagement, executed the right way based on how the contact contacted you. That's where a smart real estate website and CRM comes into play, to help you build your business to minimize what you spend--and lose--to keep it running.

Opportunity cots come in many shapes and sizes, but all of them hurt your wallet. And once you start getting those squared away, your write-offs are the least of your concerns.

Contact Delta Media Group for more information on how to start minimizing your opportunity costs.
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