Marketing and Sales KPIs - Measure the Right Things and Forget the Rest

Dan Austin: [0:02] Welcome to the Collecting Keys Friday Focus. Hey there. Welcome back to another episode of the Collecting Keys Friday Focus. I'll be your host today, Dan Austin. And before we dive into our topic, I just wanted to make one simple request, and that is, if you like this show, give us a five star review wherever you listen to your podcast. If you enjoy the content, and you know somebody that might benefit from it, or might get a good laugh out of some of the dumb things Mike and I say, share it with them. That's how we grow the show, get get the word out there, that's how we keep producing this content, how we keep the shit show going that you all love to listen to every single week. So yeah, like, subscribe, share, do all that good stuff. That's my ask, I'll leave it there, and then without further ado, we can just really jump into our topic today, and what I wanna talk about is your marketing and sales key performance indicators, your KPIs related to how you're marketing and selling to your seller leads. This was a great discussion in our instant investor group call last Tuesday, where we talked about this, and it reminded me back when Mike and I first started, you know, I strongly believed if we can just drill in enough and be the smartest guys in the room, and look at the data, because honestly, marketing is in in just the general sense from a business standpoint, is a data business.

Dan Austin: [1:20] It's not like everybody thinks it's like, oh, the fancy graphics, and the pretty designed glossy paperwork. No, that's that's separate, that's the pretty stuff. The marketing though, the fundamental piece of your business called marketing is really data driven. So I really truly believed in this business, if we could just drill into the data, and you know, look at the best niche lists, and stack those against the copy that we're using, stack those against the mail pieces, the zip codes, the time of the year. I mean, there's a million variables you could use, right? But for our business, for what we're doing, trying to dig into that, there's too many variables, it's too complex for a business, which you usually see like ours in wholesaling. And honestly, it's not that valuable when you get some of that data, it doesn't actually matter. The two things that I can always tell if somebody's gonna be successful, or the reason why they're not being successful, are their consistency, and how often they're marketing, and for how long are they being consistent. So you might be consistent for three months, six months, but if you just stopped, well, you're not gonna be successful in the long run, you might actually lose money, you might have made some money and stopped, but you're not gonna continue on, right? So it's consistency over a long period of time, are the two things that I know will make somebody successful.

Dan Austin: [2:34] There's a lot of interesting KPIs out there, a lot of things you could measure that do help, but they shouldn't be really they shouldn't necessarily make too many decisions for you. Like, a fun one to track is like how many touch points for your what is the average amount of touch points? Whether that's how many mail pieces do you have to mail somebody, or how many times have you gotten on the phone before you get a contract. And what that does is that lets you know, don't get discouraged just because you mailed them once and they didn't call you, or just because you called them three times, four times, five times, and they didn't you haven't gotten a contract, don't give up, because maybe your average touch point's seven, nine, ten, fifteen times, and so you know you gotta get your reps in. So that's a very interesting KPI, but shouldn't necessarily dictate how you spend all of your money. Another one that's that's interesting is like, which lists are producing the most deals? Now that actually is quite important, and an interesting one, because you don't wanna just if you're just sending flat, like, I'm just gonna send absentee owner with high equity, and you're not getting anything, you're not finding motivation, right? So maybe you need to take absentee owners with high equity, and stack that against liens, or bankruptcies, and that way you can find some financial motivation with somebody who doesn't live in the property, but also stands to make some good money to pay off their debts, if they can walk away from their property for a for a cash price, or a sale in general. So that's a good one, because you do wanna know like, okay, my lists aren't really working. But that's not necessarily the main metric we're gonna dig at, and I'm gonna get out those couple metrics here in a minute when we wrap this conversation up.

Dan Austin: [4:03] A lot of people get caught up in some of these other KPIs, or they measure the right things, but it takes them down the wrong path. So for example, you might say, I want to know my cost per lead. Great metric. We're gonna dive into that in a minute. Cost per lead is great, but what they'll say is, well, my cost per male lead is $200, and my cost per lead on texting is like $10, or $20, or whatever. And so they automatically think cost per lead is cheaper over there, I need to go there. Yes, it is cheaper, but there are a lot, lot less quality of a lead when you're getting a texting lead, or a cold calling lead, or a driving for dollars lead. There's just not as quality as a direct mail lead, which is why we always coach our clients on direct mail, and show them how to properly do direct mail. It works, direct mail works, and the leads are high quality because they're raising their hand. So don't get caught up in thinking cost per lead, going toward the cheapest cost per lead is the right thing, because that's measuring the right thing, but interpreting the data incorrectly. So what we like to do, is we like to take the cost per lead, and the cost per deal metric, and look at both of those. So now, we've learned over time, not to make the mistake of going towards the cost per lead metric, and going with the cheapest one. We used texting, and we used direct mail for several different reasons, which we can dive into another episode, the why we paired both those together, but for now, I just wanna talk about the KPIs that we use. So we look at cost per lead. Now we've marketed in well over thirty, forty markets across the country, and we know if we're going to be successful right away, our cost per lead, right when we send that that first month of mail, we know our cost per lead needs to be in that 120 to $160 range.

Dan Austin: [5:46] You know, some markets, it might bump up to 200, so we might kinda like side eye at it, and kinda slowly take a peek and see what's going on there, but definitely, if we're in the low cost, like eighties, we know we're kicking ass, and we know we're getting a ton of leads, and that's awesome, but we definitely know we wanna be in that $1.20 to $1.60 range, and we're happy with that. Now that is one piece that we pair with the cost per deal. Again, thirty, forty markets, we've averaged most of these markets. Our average, you're gonna see us between 3,000 and 3,500. If you're a little bit less experienced, you might see it up at the 4,000, but on average, that's kind of like that 3 to 4,000 range, is what you should see if you're using direct mail as your majority, as your main lead source. Which if you think about it, that's not too bad, if you're at $3,500 cost per lead, and your average wholesale fee's 15 to $20, you're still making a pretty good profit on your marketing spend, and that's where we want to be. As your if your cost per lead, you can see, if you have a cost per deal of $10,000, it's gonna be pretty expensive for you. Now you might if you're just mailing, that might be your cost per deal, because you just started mailing. You haven't built up the backlog of leads, you haven't built up the trust rapport, and relationship with dozens of seller leads yet, to where you're actually consistently closing a couple deals a month. So don't get discouraged if you're in month one, like, my god, I only got one deal, my cost per lead's $10, or whatever it is.

Dan Austin: [7:08] Don't Yeah. Don't sweat that. Anyhow, we like to pair those together, because they give us a quick and easy test on a market. If we are way, way out of balance on that, we're definitely going to take a quick deep dive, and if we can't dig ourselves out of that hole, then we might know, then we know we need to change something up. Something in that market is not working, and that's now where you can start changing and adapting your business. Now you can dig a little bit deeper and say, okay, so our cost per deal is really high. We've got a high, or a low cost per lead, now this is a fun one to break apart. So we have a low cost per lead, say we're at a $100 cost per lead, but we're like $67,000 cost per deal. That, this is where the money's made. So, and this is where the main focal point on this conversation needs to really trend towards, and that is your sales KPIs. So marketing is one piece. You know, Mike and I, we teach, know, keep it super simple stupid, and just consistency over time. You know, we we stack our core four lists, easy peasy, do that over and over again, you're going to get leads, right? And so that's I can almost guarantee you, that you're going to end up being in that 120, $160 per lead, maybe down to 80, maybe up to 200, depending on your market. Somewhere in there though, is where you're gonna be.

Dan Austin: [8:25] But if your cost per deal is super high, it's because you're not selling, you're not doing the sales piece right, you're not talking to sellers well enough, you're not following up with sellers well enough, you're not building trust rapport, they don't know, like, and trust you, and that's who People don't like to be sold what they like to buy things, right, and they wanna do business with people they know, right? People they like, they People they trust. So if you can't do that piece on the sales, that's why your cost per lead is low, and your cost per acquisition, your cost per deal is super high. And now, if you're the salesperson, you need to look internally, and ask yourself, what am I doing wrong? Do I suck at this? And be okay with that. Mike and I, when we first started, we were terrible at sales. We fired our first acquisition manager to help us with that piece, because we weren't giving sales the time and effort it needs to be. And our first salesperson wasn't necessarily any better than us, but they were able to commit 100% of their time to that, which is also another piece that you should really think about. If you're not committing the time necessary to to nurture your leads, you're probably not going to get as many deals, you're you're gonna have a high cost per deal.

Dan Austin: [9:27] But that sales piece, massive, right? So you can be the best marketeer, but if you can't sell, you're probably going to it's it's gonna be a losing battle. So I'll just leave it there, we've been talking about ten minutes on this. Just wanted to share with you, and hopefully your takeaways here are, you know, what your cost per lead should be about. Now, I'm gonna go on this actually, gonna get on my soapbox here. So you're gonna have all these people out there, lead gen companies, or people spitting out, oh, my cost per lead is $20, or you can buy a lead from me for a $100, that is super cool. Go ahead, try it. I can assure you that those services typically, or those people pitching, their cost per lead are low quality. Now they might be able to make up for it with a little bit better sales than the average person, but not sustainably, not at scale, right? So to get at scale, you have to have marketing systems that you can rinse and repeat consistently over a period of time, and also sales systems that don't heavily rely on you being the 1000% best salesperson. Right? Because a weak a strong salesperson can make up for a weak marketing system, and a a strong marketing system can make up for a weaker sales system, but it's not always going to be able to do that. So anyhow, don't get caught up in cheap cost per leads, because those do usually turn into expensive cost per deals, because you're getting a shit ton more. Couple other things just before I sign off here is, really those conversion rates, and looking at in your sales systems, your follow ups, and how many how many appointments you're setting versus how many deals you're getting, how many phone calls you're making, what is your talk time with these sellers, the number of calls you have to make in general to get a deal. So maybe you have to make a 100 phone calls to get one deal.

Dan Austin: [11:07] Well, you should know, I gotta make a 100 phone calls this week if I want one deal. So that's that's another helpful metric you can use to to make sure your sales are on point, and I always preach follow-up follow-up follow-up, build rapport, build rapport, that's what you're doing. It's not about the deal, it's about the people and the problem you're solving for them. So take it for what you will, those are the KPIs that Mike and I have used to run our business in dozens of markets, and they all like, we've got it down to a super simple process and system, that's how we're able to do scale, that's how we're able to be in this business with longevity, which a lot of people don't have longevity in this business because they don't know what to measure, they measure the wrong things, or they get discouraged too easily because they're not measuring anything at all. So with that, I'll sign off. Thank you for listening. Like I said earlier, please, if you like this, share with somebody. Give us a five star review. Hit me up in the DMs. Investor man Dan on Instagram. If you want more details on the KPIs we're using in our business, I'd love to share. See you all next week. Thanks for listening to this collecting keys Friday focus. Be sure to subscribe wherever you listen to your podcasts.