October 27, 2020
The reality is unsettling
Your agent count is growing and your brokerage as a whole is doing more deals than ever all thanks to your recruiting efforts.
You’ve been promising agents online leads and that’s proven to be a very enticing carrot to get new agents in the door.
Plus the agents you already have love getting leads, even if it’s just as “buffer”, you know, something to fall back on if their “real” leads ever stop coming in.
There’s just one issue, the leads just aren’t converting that well.
Sure, your hungriest agents are doing great but anyone who’s been with your brokerage for more than a few months pretty much ignores them, calling them Company Leads in a derogatory way.
This is bad for two reasons:
Eventually all of your agents will become disillusioned to the leads and once that happens they’ll start jumping ship and you KNOW agents love to gossip about brokerages. Before you know it, even newly licensed agents start saying “yeah but I’ve heard those leads are worse than random numbers out of the phone book”.
Well sure, you’re doing more business but that’s just from the fact that you have more agents than ever. But the actual leads you’re paying for aren’t turning into closings. Sure, they’re primarily a recruiting tool but why shouldn’t they do both? Plus, referring back to point one, more closings from these leads will help with recruiting and retention.
You’ve gone to all the conventions though, you’ve heard all the top producers and have seen the acronym in every Facebook Group right? You have the fix, you’re going to hire an ISA!
Now just to figure out the pesky little details that go along with the decision.
Small stuff like “Where can I find an ISA?” and “How do I train an ISA?” But have you taken a step back to consider how many thousands of dollars it will really cost you to hire an ISA for your brokerage?
(For a deeper dive, read our semi-famous article called How To Hire The Right ISA For Your Real Estate Business: A Complete Hiring Kit For Recruiting, Training, and Selecting).
No? Well, let’s take a look at EVERY single cost associated with hiring an ISA.
Hard costs are the most obvious costs of hiring an ISA, these are the actual dollars that leave your pocket. They’re hard costs because they’re pretty hard to miss.
When you hire a physical ISA for your Brokerage, these are some hard costs you can expect.
Office Space: $200/Month
If you are going to hire a full time ISA it is imperative that you have a dedicated workspace for them, as a salesperson (AKA people person) they will be very easily distracted by other agents in the office. Not having the ability to shut and lock a door of their own means that your ISA will spend very little time converting leads and tons of time catching up on gossip with the agents in the office.
According to Space.iq an average employee requires about 50-175 Sq Ft, let’s just call it 100 Sq Ft. In an average city like Naperville, IL (where I’m writing this article from) that could be as much as $2 per Sq Ft every month or $200 per month.
Equipment: $1,000 plus $110/Month
Now that you have somewhere for your ISA to work, you’re going to need to give them something to work on right?
That means a computer (which can cost more than 1,000 on its own), a desk, and an office chair. Which can easily climb past several grand but I’ll give you the benefit of the doubt and suppose you can find some good equipment second hand for $1,000 or so.
Of course, you’ll need to get them a phone number to text on and a CRM to keep track of all their interactions. One of our favorite, do it all providers, Follow Up Boss, can get that set up for you for about $69 per month assuming your ISA will never need to take a call... If they do, you’re looking at $98 per month.
(Click here to learn more about Follow Up Boss and other Smart Alto integration partners).
Oh, don’t forget that business email accounts aren’t free, even G-Suite charges $12 per month.
Salary (Base Pay): $2,000/ Month
I’m basing this one on personal experience, I started my realty career as an ISA for which I received a small base pay of $2,000 a month.
Now there are a few things to consider when it comes to salary; will this be the ISA’s only compensation? If so 2 grand won’t cut it for a full time sales person. Are you in a competitive job market or area with a heightened cost of living? Again, if you are, this number goes up.
Salary (Incentives): 10% / Closing
One of the most appealing reasons to become an ISA for a Real Estate brokerage is the opportunity to earn commissions and for most real estate ISA’s that means 10% of the gross commission on a client they helped procure.
In my best month as an ISA I had 7 closings and earned a whopping $11,000 on top of my base! It was great for me at the time.
I can only imagine Hassan, the CEO of Smart Alto and the infamous 10,000 appointment setting ISA, had crushed that record a few times back in his ISA days.
But as amazing as bonuses are from the ISA’s perspective, they are still a debit on your accounts payable summary and add up to a sizable real cost for your business.
For the record, I’ve seen some brokerages try to get around this by simply offering ISA’s $100 per appointment set… not such a great idea!
Brokerages who try this inevitably learn a hard lesson in misaligned incentives. Meaning if you receive a $100 bonus every time you set an appointment, it will eventually become your singular focus and you’ll begin to get people to agree to an appointment under virtually any context.
Before you know it, you’re going on listing appointments for people who “might” sell in 5 years because your ISA really wants to earn their bonuses.
Time related costs are a little harder to measure but as a business owner you have to come to terms with the fact that your time is money.
In our article Should I Follow Up With Leads Myself Or Hire An Inside Sales Agent? we figure out that an average agent’s hourly rate is approximately $125 per hour, to figure your exact hourly rate simply divide your average commission check amount by the number of hours you spend working on an average deal. For our calculations we’ll stick to $125/hr.
Time Spent Recruiting / Interviewing: $2,125
Have you considered how much time you’re actually going to need to set aside to recruit and hire a good ISA?
You’ll have to write the help wanted ad and post it to all major portals, this can easily take 2 hours especially if you’ve never written a job posting before.
Once good candidates start applying is when things get really time consuming though. Let’s suppose you have 15 candidates apply for the job and you go through an interview with each one, that's another 15 hours spent on your ISA search before you even extend a job offer.
So you’ve now invested 17 hours to hire a single ISA. And you have to repeat the interviewing process each time you want to make a new hire.
Training Hours: $2,500
Now that you’ve found and hired the right ISA for your business, you’re going to need to train them and boy oh boy are you in for a ride.
Suppose you’re hiring a stellar salesperson from outside the industry, well now you have to spend at least 5 hours introducing them to the real estate sales process and your business specifically.
Once they know how things work, you can begin to train them on scripts and best practices for converting leads. This coupled with objection handlers will take at least 10 hours of your time.
And you remember that $1,000 computer and $100/mo software you bought for your ISA? Well expect to spend at least 5 hours training them how to use it.
Distractions: $1,250 / Month
Having never met any of the ISA’s you will interview or consider for the job, I can say 2 things for certain about the ISA you ultimately hire.
One, they’ll be a naturally talented salesperson with the gift of gab and a touch of charisma.
Two, you’ll get along with them quite a bit and they might even remind you of yourself.
I know that’s a little obvious and hardly makes me an oracle, after all the first thing is pretty much a prerequisite for anyone in a sales role and why wouldn’t you hire someone like you, you’re pretty awesome.
But it’s the perfect storm!
You have two likable, like minded extraverts in an office together 5 days a week. Even the most disciplined among us will find themselves spiraling into 30 tangents several times a week.
The worst part about it is, your business can be pretty stressful so having an ISA to vent with and chit chat with after appointments will feel like such a treat that you won’t even realize how much time neither of you are spending on non-work chit chat.
Conservatively, I’d estimate these distractions can easily reach 10 hours per month.
According to Investopedia, an “Opportunity cost is the forgone benefit that would have been derived by an option not chosen.” meaning the amount of money you leave on the table whenever you make a decision.
Investopedia goes on to say that “Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.”
So let’s evaluate the opportunity costs associated with hiring an in-house ISA so you can make a “more profitable” decision.
Cost Of Weak Conversions
No matter how well you vet your ISA candidates or how well you train them, they won’t be able to convert as well as you straight out of the gate.
It takes time to build the skills necessary to be great in Real Estate sales. How long did it take you to start converting leads as well as you do today? 6 Months? A Year?
Let’s suppose you do hire an amazing ISA and you’re an extremely gifted trainer, maybe you can get your ISA to convert 80% as well as you do.
Not bad right?
Wrong, that means you’re only making 80% of the revenue that you were before! Let’s just say for the sake of simplicity that last year you generated $100,000 from online leads.
Well, your ISA is only converting 80% (an optimistic number to begin with) of what you could then your new revenue from online leads is $80,000 dollars.
Don’t forget! Your ISA also makes 10% or 8k on those closings over the course of a year so where you once made $100,000 you now make $72,000… except, you’ll probably want to consider the total salary and not just the bonuses so there goes another $24,000 bringing you down to $48,000.
Just 48% of what you were earning from online leads before you hired an ISA.
(IMPORTANT: ISAs can be a highly profitable addition to your sales team if you hire a minimum of 3 who can work 24hrs per day and you send them more leads than you could personally handle).
Cost of Missed Leads
So, you decided to hire a full time ISA….”full time”... what does that really mean?
I mean every “full time” job I’ve ever had has been about 8 hours a day (minus an hour for lunch break of course).
And by “full time” what we’re really saying is you’ve hired an ISA for 8 out of the 24hrs in a day. More like a 1/3rd time ISA.
Because once the clock hits 5pm, they’re punching the time clock.
Now we know that the most important factor in lead conversion is “speed to lead” or being able to reach out within 5 minutes of a lead registering online.
With a “full time” ISA, you might be leaving 2/3rds of your leads uncontacted in the first 5 minutes.
If you thought it was bad for your ISA to only convert 80% as well as you then take into account that an 8 hour a day ISA can only do about 33% as well as you.
And because they won’t be able to get to most of the leads in 5 minutes or less and by the time they follow up the next day it’s been hours and the leads have already moved on.
Ton’s of opportunity left on the table.
When you decided you wanted to hire an ISA for your team or brokerage, I’m almost willing to bet it was because you wanted to make more money.
But, as we’ve explored, an on-site ISA is often more cost than they’re worth.
Even if we chose to look at the most tangible hard costs, you’d be out $30,920 in a single year with a new ISA and that doesn’t include the bonuses you’d have to pay them on every closed deal (because there really won’t be that many closed deals with an onsite ISA, check the opportunity costs)
So what do you do? You can’t scale your business if you’re constantly following up with leads right? And you can’t grow your brokerage if your agents aren’t in love with the leads they get from you.
Well that’s where Smart Alto comes in, we’ve built Smart Alto to single handedly address every single cost associated with hiring an ISA.
Hard Costs: Starting at $255 per month
No, that’s not missing a zero, we really do offer plans starting under $3 per lead. The best part? Unlike a physical ISA, our capacity grows with you, and when you generate more and more leads the cost per leads actually goes down
In fact, if you’re generating 500 leads a month for your agents, Smart Alto can begin following up with those leads in 5 minutes or less for $1,000 per month. That’s half the monthly salary of an ISA with none of the other baggage like office space or software subscriptions.
Time Costs: Smart Alto is leverage
Instead of spending weeks training an ISA and more than an hour per day managing them after that.
Smart Alto can be set up and ready to follow up with your leads after 1 simple 15 minute onboarding call. That’s it, no time consuming training, no hours of self service or how-tos just a high quality plug and play service.
Opportunity Cost: No one optimizes like Smart Alto
We follow up with your leads within 5 minutes 24/7/365 using real human english fluent ISAs. No more missed leads...ever!
Not only do we only hire the best of the best ISAs based in the USA and the UK. But we also train them with our hard learned scripts.
We leverage the best communication channel and follow EVERY single best practice derived from thousands of leads and successful phone appointments.
“What’s this about phone appointments?” you ask?
That’s the secret sauce! We reach out to every single lead and engage them in a healthy qualifying conversation and turn them into agent ready phone appointments that can be booked directly in your agents calendars!
Smart Alto is the no brainer virtual ISA option you’ve been waiting for, schedule a demo today and learn how our system will not only save you money but also make you a fortune in commissions.