Good morning. I was working this weekend, and I came to a realization about just a mental mindset that I always have had. I think that this is one of the biggest mistakes most real estate agents make, not having this mindset, and it's interesting because I've never put my finger on it before. What it was, was really the amount of leads that I always wanted to be able to generate in my business and my goal in my business.
I was working on marketing, and one of the things that you have to do when you're working on marketing is you have to determine who your ideal client profile is, and who you're really talking to, right? I'm talking to Jake and I'm telling him my mental model, which was I wanted to spend double on leads and marketing in my market, double by competitors in a way that was profitable to generate the most leads.
Jake looks at me, we were on Skype and he says, "Well, man, I don't think all of our clients would want to do that." I was like, "You know what? You're right, but those are the clients we want to work with." I started thinking about why agents don't want to do that. I think that it's really interesting. Let me back up, though. The reason why you want to spend double is because of a couple of things, and I'll tell you how I did it. There's a better way to do it. The number one thing is that you are building that audience, and you're building people who are raising their hand in your market. Obviously, they're saying, "Hey, I'm over here and I'm looking to buy or sell some real estate in the next three, six, 12 months."
The way that I did it was through a mortgage company. I started a mortgage company, and I took the top line revenue, the same percentage that I allocated towards marketing for it towards my real estate business. Now, I'm not saying you should start a mortgage company. In fact, I would highly recommend you don't, you just partner with a good mortgage broker. There's actually a lot more regulation these days. I think that the concept is still very sound. You want to outspend your competitors by double.
A couple of other things it does is, it creates a barrier of entry for competitors, and if you're doing what we say and you're nurturing them properly with content, and you're building those relationships in a way that has you highly leveraged, you know what I mean? Guys, it doesn't take more than 10 minutes a week. You can go live every day in syndicated, like I was saying last time, if you're an overachiever, but really once a week will get the job done.
I started to think about why agents don't do this. I think it boils down to a couple of things. I think it boils down to a lack of understanding of the cash conversion cycle. In other words, not keeping proper track of the right numbers. Then I think it also boils down to just a general paradigm that most agents have when it comes to digital marketing. If you bought a print ad in your market, and you've got like, let's say-- And most people don't track, but let's say you've got half a dozen phone calls of people calling about properties that you had listed, and let's say you spent $500 or $1,000 for that print ad that month, which is pretty common in most markets, maybe even more now.
That's a cost per lead of, $100 if you got 10 calls, if it's $1,000 ad. You would never call the print ad company back and say, "Hey, the leads were no good." You just wouldn't do it because that's not your mindset, right? Your mindset is, "I paid for that thing, it went out into the physical world. I see it. I can see my face on it. I can see my brand on it. I can see the homes that I advertised on it. They did their job and that's done. The rest is up to the market, and maybe my homes, maybe the homes were no good, and the people didn't resonate with the homes, so they didn't call on them or whatever."
You don't think about distribution, you don't think about how many spots that went in. You're not tracking normally, but you're satisfied and that's your expectation. Your expectation has been met, but when it comes to digital advertising, for some reason, us as agents have just a totally different mindset. You can spend $500 in digital advertising, and get 100 people to respond to you all day long like clockwork.
You can spend a 1,000 and get double that, 200 people to give you their name, phone number, and email address, and indicate that they're looking to buy or sell in the next 12 months, but if you don't have a proper expectation on how to work those leads, how to call those leads, then what happens is-- Good morning, aunties. This probably isn't going to be very interesting to you, but I appreciate you watch it. Give me a heart. Facebook likes hearts, for some reason the algorithm gives you a boost if you get hearts instead of likes.
Anyway, the expectation is off. I think that it's because we have this instant gratification desire for digital advertising because it goes out digitally, we can't see it physically. The only expectation, the only tangible thing we can get back is a quick result. You can't violate the laws of marketing, no matter if it's on the internet or on a print ad. The laws are the same no matter what. Thanks for the heart, auntie [unintelligible 00:05:41]. The laws are the same no matter what.
If you know the cash conversion cycle and what that is, is if I spend a $1,000 today in my market, how many months does it take me to get a sale to get that money back? Then your expectation is realigned properly. The funny thing is, agents that we work with all over the place, they all have a different uncommunicated expectation as far as their digital marketing and paperclip leads go.
We can tell them and give them a proper expectation right away, but hey only hear what they want to hear. Then what they'll do is they'll buy our platform, and they'll give us like a $1,000 a month, $1,500 a month depending on the size of platform. They get a Lamborghini of a tool, and then when it comes time to do their marketing budget. They're like, "Let's try $300." The equivalent of that is, buying a Lamborghini because you need to get across the state as fast as possible, putting $3 in the gas tank and then waiting a whole month to put the other $3 in.
Then by the time you get to the end of the state, you're like, "Man, that didn't work out the way I thought. I thought I'd get there a lot faster." Well, yes that's 100%. If you know the cash conversion cycle, you are able to comfortably invest the right amount of money. If you know that every $1,000 you put in per month into paperclip marketing, takes you three months to get it back, you're going to be a little bit more patient and understanding, and as you get these numbers dialed in and we help you do this, if you let us--
A lot of agents don't let us, they just have an expectation that is uncommunicated, that it can never be met, and they don't have the patience for this, which in return stifles their growth. They're never going to become number one not doing this. Then you're able to actually-- If you have the right expectation and you have the right numbers, you're able to actually start to comfortably outspend your competition by double. If you can do that on a consistent basis--
I'm not saying, if you're in a big metropolis, maybe you want to start with a suburb or even a few neighborhoods to start to take over, but you can see if the chunk of leads that you get are moving in 12 months, the investment that you're making today is going to pay off in 12 months. The chunk that is smaller is six months, that's six months from now. The chunk that is smaller than that is three months, that's three months from now, and yes, you'll always have now business, but that's not the gauge. That's not the meter.
That's short-sighted thinking and that's really the problem with digital advertising because there's not something physical behind it that people can touch. They just want that instant gratification. I just wanted to make sure that I covered that today because it was just on my mind. By the way, if any of this resonates with you, or you don't know where your numbers are at, just shoot me a message on messenger. I'll connect you with our team and that's where we'll start. We'll start by just helping you dial in the numbers, so you can know where you're at.
You might be doing something really good right now that's making you a good deal of money, and you don't even know it. I see that often as well until you start to look. A lot of times what happens is, money gets tight, or if there's something that looks shinier, you'll just dump that thing that was actually making you money, and go on to the next thing. That's a huge mistake, not knowing those numbers. That's it. That's my Monday rant. Happy Monday, everybody. Appreciate it. Thank you. Have a great day.