I met with an acquaintance from the real estate industry yesterday. We'd not seen each other for over a year, so I was curious about what he'd been up to.

Background

This person is just over 40 years old. He has an MBA. He has bounced around from one career to another, but always had a passion for real estate that he had developed outside of his career. Since we'd last spoken, he decided to become a real estate professional and had only recently taken a full-time job selling lots in new residential developments at 100% commission. I was naturally curious about the challenge of making a decent living with this opportunity. (No, I was not trying to sell him a Sales Jumpstart, but I should have! Read on...)

I learned that lots were selling for $250K. His commission was 2.5% or $6,250 per sale. He receives a list of prospects from his employer in a Microsoft Excel format. He updates the spreadsheet with a pen or pencil as he makes calls. He uses a highlighter pen to flag the calls he makes to answering machines. This is a person who wants to feel part of the "team", so I suspect he spends a lot of time going for coffee, lunches and after work beers with his work companions.

Let's just say $150K before taxes and expenses is a decent living for this individual. What would it take for this person to earn his desired income?

Assumptions:

• the list of prospects is of average quality and provided by his employer
• the way he introduces himself and his services (the "script") is almost always the same
• 250 days (52 weeks in a year - 2 weeks holidays @ 5 day weeks)
• 50 calls per day (this roughly is what he was making)

This means he needs to make 12,500 calls per year and that he closes 1 sale per 520 calls (1 sale about every 10 days).

Thoughts for improvement:

If I was this person, I'd look at the following:

1. Question the quality of the list. How relevant is the list? What could be done to increase the likelihood that the people being called would be interested in the "product"?
2. Refine the script. Is it short and punchy? Is the value proposition compelling? What is he doing every day to refine his script and to deliver it in an effective amount of time?
3. Increase the number of calls. Cold calling is hard work. Decent cold callers, however, routinely make over 100 calls per day. All things being equal, he could make twice the income or make the same income in 1/2 the time if he made twice the calls.
4. Implement a formal sales methodology. He doesn't have a system for shaking the bushes and organizing the fruit that falls to the ground in piles according to ripeness. I'd recommend he adopt a simple sales methodology. (I'll cover off in another post what this means.)
5. Use better tools. There are oodles and oodles of software programs out there that could save this person time, increase the close ratio and assist with developing an ongoing relationship with his prospects. (I'll investigate some of these software solutions in another post.)
6. Focus on the job. I'd recommend this person spend a solid 8 hours/day selling. While it's certainly important to be loved as part of the team, any time spent on unproductive activities during selling time comes straight from his wallet. I'd venture to guess that if he became the top seller, everyone in the office would be begging him to share his secrets over beers after work.
7. Hire an assistant. I'd look at investing in a professional cold caller to do the initial calling qualifying, and focus my time on closing the prospects who understand the value proposition, have the money, and are at least vaguely interested in doing business with me. Given that compensation is 100% commission, there are risks, but look at the math assuming $5K/month ($60K) for an assistant who only makes cold calls:
   
   • 100 cold calls/day by assistant + 25 cold calls/day by senior = 125 cold calls/day = $375K total income
   • more quality time spent with most qualified prospects = higher close ratio = still more income
   • therefore, all things considered equal, this person could at least double their income with an assistant and maybe work less, too

The Sales Jumpstart provides a full-time assistant, the software and the methodology for 3 months for $15K. I'm curious to see how he reacts when forward him a copy of this post!