Posted on: December 04, 2020
WI 573 | Marketing Dollars

 

Today’s guest is a successful entrepreneur and real estate investor. He is also the host of Flip Talk, a no BS podcast that aims to provide real and actionable information from those who flip houses.

Before Don Costa achieved the level of success he’s currently enjoying, he had to ask himself some tough questions, change his mindset, and act “as if.” In this episode, Don brought with him years of experience and tons of valuable insights, and he willingly shared many of the things and techniques he has learned along the way!

More importantly, Don also tackled one of the key elements of any business—the marketing budget. If you are unsure how to spend your marketing dollars in a way that will bring in the most profit, this episode is exactly what you need to hear!

The Only 4 Ways To Spend Your Marketing Dollars In 2021 With Don Costa

Episode Transcription

I got a show for you. Don Costa. I know you’ve heard that name. He has been around forever. Let me tell you why I wanted to bring this guy on. I’m very picky about who we bring onto the show to talk to you guys. In my opinion, again, running Multipliers Brotherhood, I know hundreds of people in the real estate world, I get to do a lot of networking going to events and so forth. Don, without question honestly, is one of the sharper guys I know out there.

He’s not just a real estate investor. He thinks like an entrepreneur and a business owner. This is someone that understands how to elevate out of the day-to-day not to be the one touching everything in his business, but to empower a team to track the right things. Run it like a true business. At anytime I can bring someone in for you guys that can elevate your thinking, gets you to begin with the end in mind. That’s always super valuable. Don’s a rock-solid guy. Don Costa, what’s up? Welcome to the show.

What’s going on? I’m glad to be here. That was a great intro. Let’s save that for later.

I like you. We hung out in Florida and sat down. We had a little bit of heart-to-heart about raising kids and family. Not just the business conversations, but those life conversations that matter most. If you’re reading, here’s what you’re going to get. Two things. We’re going to pick Don’s brain on the poor areas that he’s focusing his marketing dollars as he’s prepping for 2021.

The second thing are four tactics on how to maximize marketing at a high-level. That’s what you’re going to walk away with, two for one special. I like it. It’s going to be a solid conversation. Don, let’s hop in. Does everyone want to know what are the four areas for you that you’re focused on when it comes to marketing channels?

Direct Mail

I am born and bred direct mail guys. It is always an avenue that we hit in 2018 and 2019 combined. I sent out over two million postcards. I know direct mail at a high-level. I’ll be honest that during COVID, I’m not sending out as many. I’m only doing about 40,000 a month, but direct mail is still an avenue that I love and understand well. Cold calling is another avenue that we are hitting pretty hard.

We have two full-time cold callers and then Googling for Dollars is a twist on Driving for Dollars. If you don’t have time or the bandwidth to go out and drive neighborhoods, you can always google those neighborhoods. My tried-and-true marketing that’s always been the best deal source for me is networking.

Let’s break these down one by one. Let’s make this practical. Here’s the first question. You’ll hear a lot of people saying direct mail is saturated. You walk into someone’s house. There are 50 postcards stacked up. Why a guy of your caliber with your budget, why are you still spending on direct mail? What are you seeing there that’s keeping you in the direct mail game?

Direct mail always gets a response. We’re going to dive into this a little bit further, but once you understand, say, you’re micro-tracking like you’re breaking your direct mail up between your list and when you mail them and the color of the car and the type of the car. You’re tracking those things. We call them split tests in our organization. We use a different phone number for everything we do differently.

For instance, I use a green card with an equity list. It’s going to have one phone number. If I use a Google street car with an equity list, it’s going to have a different phone number. I’ve learned that during the summer with direct mail, it’s a bad time of the year to mail. People are on vacation or they’re getting ready to bring their kids back to school.

Direct mail doesn’t perform as well during election years. We have saturation. Direct mail doesn’t necessarily perform as well going into November. When you start to see the flow, like for instance, from January until about June, direct mail is on fire in some markets that I’m in. Every market’s a little different. We learn when to pour the gas on and when to take your foot off the pedal. That allows us to maximize the profitability of that marketing channel.

If you’re just doing it willy-nilly and shot gunning it out there into the big black hole and you’re not watching the return and tracking the data and looking at what lists performs and what lists don’t and what time of year is better and how often the mail, it’s not going to be successful for you. You’re going to find it to be a very expensive marketing channel, but like any other marketing channel, if you’re paying attention to the results and the data, you can fine tune it and make it work for you.

I hope you learned how Don was breaking down direct mail. The level at which you are niching it down. You’re right. Most people just spray and pray. They put a lot of focus on building the list, but they’re not thinking about the exact times to send them and to come in and get strategic about when you drop, how you drop, changing. For a lot of people, the thing I want you to hear saying is you’re at level two, Don’s taking the speaking down to level ten on how he’s doing it.

WI 573 | Marketing Dollars

Marketing Dollars: Once you understand your tracking, you’re going to be successful.

 

Don, I have a question. Someone’s reading, they’re doing direct mail, give a couple of things that they could do practically to maximize their direct mail, certain holidays or times a year. What are two things that someone could run with and go, “I can apply those right now to get more out of my direct mail.” What would those two things be?

For instance, one of the things that we do is we dial it down to the day. We’re tracking it down. We know that, for instance, we don’t want our direct mail to land on a Wednesday when we mail it, because that’s when all the junk mail hits. If you want to simplify something, when does junk mail hit your market? We’re sending out these floppy little paper postcards and they’re bound to get lost in the shuffle of all this junk mail you get. If yours sits on a Wednesday like mine does, I try to direct my direct mail providers to send out my mail so that it hits on a Monday or a Friday. We’re avoiding that Wednesday.

Don’t allow your direct mail that hit on Wednesday when everyone else does. Focus on Monday and Friday. That’s a great little nugget, but it might be one more like that.

The best way for any marketing channel to work, and we will probably get into discussion a little bit more, you got to answer the phone. If you are sending out direct mail and you’re sending it to a voicemail, you’re throwing money away.

A lot of people catch downs there, sending everything to voicemail. If it’s not going to voicemail, how in the world are you managing the call flow of two million postcards under normal season when you’re sending out that many?

We had five lead managers at one point. We started with one lead manager and we were sending out about 30,000 a month. We went up to two lead managers. We took it up to about 50,000 a month. At our largest point, we had five, but we averaged about three lead managers during the 2018 to 2019 season. We have two, so we’re not sending out as much direct mail. We’re doing a lot more cold calling than we have in the past, but we still have two full-time lead managers.

Answering Live

Do lead managers answer those calls live and maybe disperse them out?

They are answering them live.

What percentage of your direct mail calls do you try to capture live?

The goal is 100%. They report every day that says what we missed. We’re usually 97%, 99% of the calls answered. There are some days we hit the goal of 100%, but you want to answer every single call live. That’s the whole point. There are people that will call you and they’ll act like they have no interest in selling their home and you get them on the phone and you have a good conversation. You break it down.

Pretty soon, it ends being a deal. Some of those don’t work out, but at least you get a relationship going, some of those we buy and follow up. If you’re not following up, you’re losing money. No marketing channel is going to be profitable long-term without follow up. If you don’t have a follow up ground game going, know people have heard it over and over again. I guarantee you, most of them are doing it.

I can tell you that. I know that, for sure. Follow up, are you utilizing automation to do that?

Cold Calling

I consider follow up a marketing channel. That’s how seriously we take it. We do the automation, text message and email automation. We have our team do what we call warm follow up. The lead manager who answered it is calling them back and continuing that relationship. We also do cold follow up where we throw it over to cold callers and have cold callers call.

If you’re not following up, you’re losing money. No marketing channel is going to be profitable without follow-up.

It’s almost like we’re a whole different company. We’re hitting them from every single angle we can on a regular basis. If they tell us to call back in 3 days or call them back in 1 to 2 weeks, it’s like we’re buying deals 12 and 24 months after the fact. Sometimes we’re buying those deals, not because the seller changed what they’re asking for, but because the market and the ARV have changed.

What wasn’t a deal maybe eighteen months ago is a deal today. A lot of people will say, “That seller, they’re hard and fast at $100,000. I can’t buy it at $100,000.” When was the last time you ran the comp? The markets are on fire. It’s another avenue. Everything about success is your mindset and your perception of what is or isn’t an option. You got to make sure that you’re looking at everything a little differently, bigger and looking to see if there are options you’re missing.

I want to make sure everyone learned that your follow up program is entirely a different marketing channel. That put the nail on the coffin in the sense of how you handle your follow up. I thought that was well said. Again, focus your drops on Mondays and Fridays. That’s key. Come in and make sure you’re answering these calls live, utilizing some type of lead manager, which is an important piece as well. That’s crucial. Let’s go over to cold call. A lot of different things you could be doing, again, cold calling is fundamental. I know Brent Daniels is reading this. He’s like, “Come on, Don Costa. Let’s talk about TTP.” What do we get going on there? Why cold calling?

I’m an old school guy. Direct mail is my jam for a long time. I was reluctant to do cold calling. I don’t know why. Coming into COVID and the changes we’re making in our organization, if I’m being real. We weren’t virtual. Everybody, 100% of my team, was in my office. We have a couple of our internal team members who have moved to Tennessee, which we’re in the Tennessee market. We have outsourced two VAs for our lead management and my KPI reporting in a lot of the different systems and processes. We have somebody that builds a lot of that out for us, our VAs. My team is half virtual and half in-person.

I let go of that fear of implementing cold calling in my organization. We did. We went pretty heavy in it. For me, the secret to cold calling first and foremost is making sure you’re on good data. I’ve learned that. You got to have a lot of people say it doesn’t work. Again, it goes back to, “Where’s the break in the process? Are you on good data?” We’re on that data. We first went for it and we dialed in our data and we started getting results. We go, “How do you maximize the results?” We get a lead in from our cold calling team that goes into Podio and our acquisition team never calls it. The homeowner doesn’t the answer. Do you stop there?

No, she assigns it to a lead manager and then they tag team that person until they answer. We’re aggressive. We start looking at, “Where is the break in the system and how do we make it work better?” I personally closed a deal that we’re making $50,000 on. We’re getting the check. It looked like a great lead, but the homeowner wasn’t answering and the lead manager in the acquisition made a tag team that person until the lead manager got him back on the phone.

My acquisitions manager asked me if I wanted to close it. I went over there and closed the guy. It’s how hard you are willing to work for it to make a work in any marketing channel. We’re finding that cold calling is gathered around good data. We’ve got a good process in place. It’s going to be one of our most profitable marketing channels out there.

What about this Googling for Dollars? Everyone’s so used to hearing Driving for Dollars. Someone’s not familiar with that language. What would it look like to Google for Dollars? Give us a quick breakdown of that.

Technology is so phenomenal nowadays. Back when I first started in 2003, I was printing off routes, door knocking with Microsoft Streets and maps on paper. I was slipping through paper and driving these routes. You had GPS, which you could only put in one address at a time. Now we’ve got this route planning software and all kinds of things.

The technology that’s at your fingertips as a real estate investor is ever evolving. Google is one of those. The Google Street View is an amazing tool if you don’t have the time or the bandwidth to go out there and drive neighborhoods for dollars. You can go through, put an address in, pull that out, it’s up and you can go up and down the streets and around the neighborhood.

You’re like cruising via Google Earth, looking at properties and not getting in the car.

I registered the domain name, GooglingForDollars.com. That goes to a Driving for Dollars platform that has Google for Dollars because it is going to be a great asset for marketing for us as real estate investors.

Any data on how Googling for Dollars sizes up to your traditional giving out and Driving for Dollars. Have you been able to see the difference? Is it as valuable? Maybe it’s a little too fresh to have data, but that’s what I’d be asking myself. I’m like, “I don’t like Driving for Dollars. I want to go to this Googling side.” Can we back it up with anything to support how effective it is?

WI 573 | Marketing Dollars

Marketing Dollars: You’re going to find it to be a very expensive marketing channel, but like any other marketing channel, if you’re paying attention to the results and the data, you can fine-tune it and make it work for you.

 

If Driving for Dollars is working in your organization. It’s going to work for you here. The data in our organization, I would have to take a look at until you compare to Drive for Dollars. It’s equal.

Can you say Googling for Dollars is equal to Driving for Dollars?

I believe it’s equal because it’s the effort. It depends on how seriously you’re taking it. I have a gentleman that I’ve been working with for a few years. He worked for me as an acquisitions rep. He’s followed me on some of the platforms I’m on and learn from me. His first deal, he got it in the Bay Area for Googling for Dollars. He was cold calling a house. He looked up and down the neighborhood and noticed that neighbor’s house had some issues. Skip trace them, call them, made $300,000 on his first deal. It’s Bay Area. That’s a caveat. It’s not like the typical USA.

That might change your thinking a little bit to deal like that size. That’s fantastic. Let’s go down to networking. I believe this is way overlooked. You and I were chatting about this before. I’ve got a couple of good buddies of mine at a high-level that have maximized your traditional networking. Break it down. What does networking look like in your organization to find deals? How does it work?

Networking

When I started, most people here may not know my story and it’s all over the place if you want to find it. I had a $1 million judgment against me. I had no money and no business. I’m out there doing marketing. My marketing channel was networking, calling agents, calling other investors. I would call people’s abandoned signs. A lot of people will say, “I put an abandoned sign. I only got other investors that called me.” Again, it’s outside the box. Why does that suck? Those relationships could be profitable. That means your abandoned signs worked because they attracted some people that you could be doing business with.

I would troll Craigslist and call other people’s ads on Craigslist. I would go to RIAAs and talk to people. I called agents and met with agents. Again, it’s the effort. How seriously are you going to take it? You’re looking for those people that you can connect and understand what you’re doing. A lot of them aren’t going to, and again, a lot of people go out there and they’ll talk to an agent. The agent will be like, “Let me put you in a portal.” Blow you off and they’ll think it doesn’t work. If you can find two agents that understand what you’re doing and they send you one deal a year, that’s two deals a year you get for free.

You can find ten agents that understand what you’re doing. They send you one deal a year. That’s ten deals a year you get for free. The way to maximize profitability in your organization is to cut the cost. Anything that’s free maximizes the profitability of your organization. Most agents I work with are good for a couple of deals a year. They’re not good for ten usually, but 2, 3 or 4. The other thing about networking that I want to share is when you’re going to people and you’re going and asking, “What’s in it for me?” That’s the wrong way to do it.

If you’re going to people and you’re saying, “How can I serve you?” You’re coming from a position of service. Those relationships will be exponential for you. You go to an agent and not say, “Can you send me good deals?” Go to agents and say, “If you have an issue with a seller that has a house and they’re a hoarder and they don’t want anybody walking through and you can’t put it on the MLS, I’m your guy or gal. If you have a property that is falling out of escrow and you need someone who can close quickly, I’m your guy or gal.” If you come from a position of service, you can have a lot of success with networking.

Being a solutions provider, saving the commission they might lose. I want to end on this piece with this aspect of this marketing channel. Let’s categorize or put in buckets the different people you can network with that are worth their time. Agents have deals. You might call them bird dogs. People that are out like your mailman. New investors, another great place. Who else would you add to that list to spend time networking with?

New investors, established investors, potential private money lenders. You always want to be raising money even when you have more money than you need. A good relationship to have is the customer service rep at the title company. A lot of people don’t realize how companies that customer service reps are responsible for bringing in business. They have a lot of free tools for you, especially when you’re newer to help you get some attraction. They can provide lists to you for free. They’re not as dynamic unless you pay for it, but they’re free.

They provide free tools for you to go in and pull property searches as far as the history or neighborhood reports or even encumbered properties quick and dirty comp. They also have relationships with their investors in your market that they can potentially introduce you to as well. They’re a great source. You want to be networking with anybody.

You want to be telling everybody what you do, to be honest with you, when you ask a few good people, everybody, even your neighbor, needs to even know what you’re doing. It’s something I want to share. This is a giveaway because this is something that I had heard from somebody they came up in conversation and we hash it out. When somebody asks you what you do, it’s not, “I’m a house flipper or I’m a wholesaler.” It’s, “I help people place money on high-performing projects.”

You got to make that person go, “Okay.”

The bottleneck in any aspect of any organization is generally the leader.

“Tell me more.” You get into maybe their private money lender. Maybe there’s somebody you can potentially work with that could send you a deal. Make them ask the question. They want to know more. It doesn’t necessarily have to be that, again, it goes outside the box. It’s like, “How can I resolve an issue? I have an issue trying to make relationships. These people aren’t opening up to me. What can I provide in that situation that’s a solution that allows me to continue the conversation?”

If I’m reading this and I’m like, “I’m newer to the game. I love this idea of going out networking because I have time, not money. If I was coaching with Don Costa, which of these would he tell me maybe to begin with?” I hear you clearly. You should be talking to everyone, but maybe one of these two where you go, “You’re going to get the biggest bang for your buck with this.” Is it agents? Is it title companies? Is it new investors? Where would you tell someone to begin?

The three places I would start are other investors in your market, new and established agents and the customer service reps from title companies.

Title companies, agents and investors, both new and seasoned, let’s make this transition. Now we have a good understanding of what you got going on in your marketing channels. Let’s talk about mastering marketing. We’re going to talk about some tactics, call them principles if you will. If you’re reading, “What do I need to understand to get more out of my marketing?” I love this first one. Are you blaming the system or the system’s operator? What does this mean? What do you feel like the first thing is here for everyone to understand?

A lot of people will look at a marketing channel and they will say, “You send out direct mail and you get phone calls, but you haven’t converted any deals. Are you doing cold calling and you’re not getting leads or getting leads? You’re not converting deals.” We started cold calling and we weren’t getting good leads. We weren’t getting any leads. I was like, “Do I decide to cold call? It doesn’t work. Do I look deeper into the process?” As an operator, my job is to make sure that I’ve uncovered every stone before I decide if something works or not.

We realized we were on bad data. We had to adjust the data set. We got bad data from our data provider and it wasn’t functional. We had to figure out what data performed the best. Are we answering the calls live? Is our sales process proper? Is our follow up process proper? My team was properly trained to go in and ask for the close. We’ll look at a marketing channel and decide the market channels that work. We won’t look in the mirror and realize that our process, after we pick up the phone, is what’s broken.

What I hear you saying is rather than ditch it, why don’t you dissect it? That’s what I feel. I see this a lot. It’s an important point. I call them bouncers. I see a lot of people that are so impatient about the results of marketing, which because of that impatience, not having an understanding of how hard and how much of an expert it takes to become an expert at a marketing channel. People waved the white flag. They pointed to the system and say, “This marketing channel doesn’t work.” They’re not taking the time to realize and take a look in the mirror that the problem is themselves. Do you see this happening quite a bit in the industry on blaming the wrong thing?

It’s human nature to deflect and place blame somewhere else automatically. As an entrepreneur, if there’s a failure in your team at the end of the day, it’s your fault. You’re the leader. If there’s a failure in your process, it’s your fault. When you start to realize that and you start to look at, “Something isn’t working, how do I make it work?” That’s what we’re supposed to be do as entrepreneurs. Somebody tells you it’s impossible. You prove that it is. Somewhere along the way, sometimes we lose sight of that. I learned this in 2018, I sent out about 60,000 postcards, January 2018. I sent out to one particular list and I got good results, we were buying contracts.

I sent out a second list. It was blah. We were getting phone calls. They’re getting a lot of deals from it. I figured the second list was worthless. Good thing I was tracking because I had started tracking and I call it micro-tracking. Everything I do has a different phone number to it. We split test everything. We’re looking at the data coming back. Into April, May and June 2020, we locked up a ton of contracts. That June, we did 30 contracts and I could have thought I was mailing to this particular list that I mailed to that had results. I was mailing to that one over and over again.

The list two, I mailed one time. I thought in my head that the list that I was mailing to every month was getting me the results in May and June. When I sat back and looked at the split test, the data, the properties I bought in May and June of that year, 30 contracts in June came from the list I dropped in January. I realized, for instance, you have a low-hanging fruit list. You have a high-hanging fruit list. There are lists that’ll perform out of the gate and there are lists that will perform over time through follow up and proper process. What I learned from 2019 is that list that I thought didn’t work end up being my most profitable list for the year.

What a great example of how something like that can play out of why you stick with it and dissect it because you might be reading the entire story wrong, which in that example, you realized it took time for the true story to come to the surface. Let’s go to number two. Again, we hear this all the time, the value of tracking and cadence. Why does this need to be put in place? More particularly, we hammer people on track and metrics.

How does someone even begin to do this? Here’s what I’ve found. Even with REI radio students, you’re at the beginning of a launch. Life and family’s crazy. You’re juggling. It’s like, “I can’t get around to doing it. I know I ought to do it, but I’m not.” It’s like going to the gym. I know I ought to go to the gym. You don’t need to convince me that it’s important to work out. The problem is I can’t get myself to do it. Talk about tracking and more importantly, maybe how to practically begin to walk it out when it seems like an overwhelming mountain to start climbing.

Let me say a couple of things. One is we can’t try to eat the whole elephant at once. You got to take the bites. As entrepreneurs, we always try to conquer everything and I’m guilty of that constantly. We had a conversation where I had to take a deep breath and go, “I need to take the bites.” There are a few things to say about tracking the points tracking. One is if I hadn’t tracked in 2018, I would have not have known that my most profitable list was what I call the high-hanging fruit list. The one that we put time, energy and follow up into, but produces more money than anything else. That’s also where I learned to watch for the cadence of the marketing.

WI 573 | Marketing Dollars

Marketing Dollars: It takes a lot to become an expert at a marketing channel.

 

I learned that the list that I made the most money on wasn’t the list I mailed to less often that year. The reason why was because I wasn’t eating at my profit by mailing to the list more times than I needed to if that makes sense, by watching the data. That’s one of the reasons why it’s important. I saw I was throwing money away mailing more often than I should have. The other thing is there is a sweet spot in marketing. You have this threshold that if you don’t cross it with either time or money invested, you’re throwing money away.

If you spend $500 on radio ads, you’re probably not going to get success, get some momentum in that marketing spend. You got to get to a point where you’re getting momentum in that marketing channel, then you have the top part where it doesn’t matter how much you spend. Once you hit a certain point, you’re throwing money away.

It’s called the law of diminishing returns. You get to know you’re in that sweet spot in that marketing channel and you stay there for maximum profitability. Those are a couple of reasons why tracking is important. I don’t know if anybody’s ever articulated it like that before it took me beating my head against a brick wall to figure out why it was important.

You don’t have time. Everything’s crazy. Assign a different phone number for each thing that you do, marketing-wise. If you change the list, change the phone number. If it’s the first quarter versus the second quarter, make it a different phone number. You change the card. If I have an equity list on a green card, it’s one phone number.

An equity list on a Google Street card, that’s a different phone number. REI Radio should have its own phone number. Your list should be tracked if you’re cold calling. When you have time down the road to digest, you can go back through and break it up or even hire a VA to break it up and do it for you. A team member in your organization to go in and build out.

All I did was have my team members build out the Excel sheets so I could see the data. I am not a data junkie. I am like every entrepreneur. I am ADD. I like to stay high-level. I don’t want to get into the weeds. I don’t want to do all this stuff myself. I can’t spell without a spellcheck. I can’t do basic math without a calculator.

I’m not a data geek, but when you see the clarity in your organization and how you’re either throwing money away or maximizing profitability, that is a game changer as an entrepreneur. I get excited. I can feel it talking about it. It starts with a simple step of assigning a different phone number to everything you do and you go back and look at it later if you have to.

I’ll give an example of this on REI Radio. I got this beautiful phone number. I want to put it on every radio station, so everyone memorizes it. I do that and every time we tell them no and they’re like, “Pushback. Why not?” “You’re going to put a different phone number on every radio station,” so that you can automate the tracking because there is no way you’re going to lose control of asking people. “Where did you hear me?” A lot of times, people don’t remember. You’re building an extra step in the process by having to ask them versus automating them.

If you’re reading, that’s two people that are coming on strong telling you the importance of utilizing. It might be different URLs. If you’re doing something that’s website-based or it’s going to be phone numbers if you’re doing something call based. I want to sum up a couple of things that you said because they’re important. I agree with you on the sweet spot. Bigger is not always better. Better is better.

There are sweet spots in marketing. I’ve even found being in business for years that their sweet spots with businesses, you don’t keep scaling a business because at some point you’re going to cross that threshold where you’re saturated, and it’s good to put that thing in a sweet spot and then begin to move on to the next thing and begin to build that. I loved that you brought the sweet spot up because we’ve never talked about that. People don’t a lot. I’ve recognized it. I call it the exact same thing. I call it the sweet spot. I’m like, “We’re there. We don’t need to get bigger because that’s what everyone’s saying doing.”

I want to hammer that in because I have watched too many businesses scale themselves out of profitability. I’ve coached people that already had million-dollar businesses. The biggest thing I’ve seen them do over and over again is scaling themselves out of profitability. You got to know what you want before you start the pass, so you know what success looks like and find that sweet spot.

Don’t get caught up in all the ra-ra and all the numbers that are thrown around. Just because the guy with the highest revenue walks into the room and everyone’s like, “Look at that guy.” Again, this is why I like to say. Revenue is for show, but your net profit is the real dough. What I care about is what people are putting in their pocket.

I know some people putting way more in their pockets at revenue levels at the top level doing around $1 million to $1.5 million versus $3 to $5 million because they keep it so lean. The last piece I want to make sure they know is, you might not have time, Don, saying to come in and pull out all of that data and interpret it, but at least set up the system to be tracking it so when you’re ready to send somebody in, they can do that.

If cold calling is not successful and you’re not getting any leads, look deeper into the process.

This is one of the biggest things I learned when it comes to tracking, which is important. I enjoy interpreting and reading the data. I don’t want to assimilate and put all the data together because you don’t want to get so drained assimilating data. By the time you get over to the important part and that’s interpreting it, you’re like, “I’m exhausted. I’ve looked at these spreadsheets forever.” I made that mistake in the beginning. I don’t put anything. We use a system called Klipfolio. It’s a KPI dashboard. It takes everything in Excel sheet format and puts it into nice, colorful graphics that are easy on my eyes.

I come in with my CEO and CFO and we talk about what that data means. I enjoy that conversation. I don’t enjoy assimilating it, so you can outsource it. Don, I want to hit on these last couple of points here. The next one is about consistency building momentum. What is this third principle here? The idea of, if you have a strong front-end and not a strong back-end, you’re in trouble. Many people enjoy the sexiness of the front-end, but they stay away from the hard work of creating the back-end. Explain this a little bit.

In the consistency building momentum aspect of it, a lot of times, you’ll spend some money on marketing. You’ll get a result. You get a couple of deals. You put the rest and follow up and then you layer another marketing effort on top of that and you get a few deals. You put the rest and follow up. If you start to do that, you’ll start to build momentum.

We see that there are months where a large portion of our deals come from follow up and not as much from the new marketing we’re doing. The next month it might be do marketing and less follow up with those things. They’ll augment each other and layer upon each other. That’s one of the reasons we have success in our business. You don’t want to lose that momentum.

Everybody hears consistency. I know you guys have heard in every podcast and real estate event that consistency matters. It’s that momentum that matters, the consistency breeds. In order to maintain that moment, you got to start building systems and processes in your organization. You got to start putting pieces in place.

Maybe that’s team members that are better at things like the data or the information or answering phones or closing deals or whatever it is in your organization so that you don’t get so bogged down. We always talk about this bipolar roller coaster of you’ve got a bunch of deals come in, you take your foot off a market and you start working on the deals. You’ll stop coming in, but you’re working on them, then you sell everything. You got to get the momentum again.

You want that consistency and not the bipolar roller coaster. The only way to do that is to sit down and start mapping out systems and processes. Whenever I hit something that sucks, I sit down, “How can I unstuck this? How can I make this something in my organization that it functions like it’s supposed to?” You don’t always know ahead of time what you’re going to need. Tackle it when it happens. Do the work on the front-end. Build it out the right way. That way you can automate it and forget about it.

The analogy I like to give for front-end versus back-end is I tell people the front-end is the traffic. All the leads, everything you’re doing. The back-end is your bridge, your systems in your operations. What I see happen is people spend so much time on the front-end. They create so much traffic on that bridge that the bridge collapses. What you’ve got to do is before you drive more traffic over the bridge, go in, stabilize the bridge, deal with the structure, do what needs to strengthen that bridge and then go back to the front-end and create more traffic.

I see people do this backward all the time. If your bridge collapses, you burn a lot of money on the front-end because you can’t keep up with the leads and the lead volume and the calls and so forth that you’re creating for yourself. That’s an important one. Let’s nail this last one. Don, what do you find ends up being the primary bottleneck when it comes to marketing and making sure that we’re mastering marketing?

The bottleneck in any aspect of any organization is generally the leader, which has been me in many occasions as I’ve been learning how to be a business owner. If you’re one of those people that you have to touch everything, put your yes or no blessing on everything, and overlook everybody’s shoulder and micromanage everybody, you’re a bottleneck to choke in your organization, your profitability and consistency. If you’re going to build a team and process around you, you got to trust that team and that process to be successful in their lane and let them do that and not be a bottleneck. For entrepreneurs, one of the things that we try to control and the last ones in our control is our marketing and marketing money.

If we’re distracted in fifteen different directions and we’re ADD and we have all these things going on, I guarantee you, it’s not working as efficiently as it could. You got to have a process in your organization or person in your organization to automate the majority of that, so that happens when it’s supposed to happen. The decisions are made when they’re supposed to happen with or without you so that it can be consistent. As good as I am, as many years in this game, in my organization, if there is ever a bottleneck, if anything that holds anything up, it’s always me. It’s never the team or the process. It’s me getting in the way. That realization has allowed me to let go in a lot of ways.

I know this particularly doing like with multipliers and stuff like that. Most of the time, the person in the way that doesn’t realize they’re in the way is the visionary that will not take their hands off of things. I always tell people empower your team and give them permission to come in and tell you when you’re getting in the way.

My team has gotten so comfortable with that, that they’re constantly kicking me out of things, but that’s what they should be doing. I love the old saying, “You have to allow the inmates to run the asylum at some point.” You got to get out of the way realize what your lane is, but it gets confusing. If you start a business, you’re wearing every hat that there is. You’re the admin, sales person, marketing, and janitor.

WI 573 | Marketing Dollars

Marketing Dollars: As an entrepreneur, if there’s a failure in your team, it’s your fault at the end of the day. You’re the leader.

 

At some point, you get confused on what your role is. You deceive yourself that you’re great at all those things. You might get good at them, but I guarantee you’re going to find someone that’s better at every one of those things than you, because you never became a true expert because easily a visionary does it.

That’s what makes a visionary visionary. They need to focus on what’s next and acquisition of new companies and direction and so forth, not the tactical pieces of what it takes to run a business. That’s a great point. If you were reading, we gave you four strategies that are working in Don’s organization. On top of that, he came and delivered four tactics.

Through that, again, I’d go back and read how he drops little pieces of nuggets like here and here tactfully that I thought were good. Don, wrapping up, I got a lot of admiration for you. I know you’re one of those guys that’s highly respected. If someone’s reading is going, “I like this Don guy. I’d like to follow him. He sounds like he knows what he’s talking about.” How do people get in touch with you? How might someone plug in with you? If they’re like, “I resonate with this guy.”

I do respond to emails. If you email me at Don@FlipTalk.com, I will respond. Follow me on Instagram @TheRealDonCosta. We have a mastermind community. If they feel like they’re a fit for it to be a part of it, you can go to BeInThisRoom.com and check it out. We have some mid-level coaching programs as well. You’re welcome to email me if you’re interested in something, if you have questions.

The Flip Talk podcast has been around for years. We’ll talk about the playbook. I’m all over Facebook. I have a ton of content out there that’s free and I love giving back. I appreciate you too. I appreciate you saying you’re highly respected in the industry as well. It’s a testament that good people find good people and help build. That’s what we try to do.

One thing I know about Don is where he’s at in his life, he’s built the businesses. He scales. He’s made great money. At this point, he’s in that transition going. I’m finding more joy in giving back. If you’re ever looking for coaches and mentors, catching men and women in that transition phase where fulfillment begins to mean more to them than financial gain, those are great coaches to have because they start to develop the heart of the teacher.

As always, if you’re reading, we are selling how markets on radio. It’s been amazing how many people we brought on. I know you guys are reading here, student after student coming on. As always, check us out, see if your market’s open for radio because we will get to a point where this bad boy will be sold out, which I’m excited about and time to move on to the next thing. As always, go to WholesalingInc.com/REIRadio. Until next time. We will catch you soon when we add more value.

Important Links:

About Chris Arnold

Chris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!

Leave a Reply

Your email address will not be published.

[class^="wpforms-"]
[class^="wpforms-"]