The One Thing That Will Grow Your Income From $60,000 to $100,000 A YearJan 19, 2017
By Mike Pallin, President of The Floyd Wickman Team, LLC
On the first R Squared Coaching call of the year, John shared his goal, and then asked, “What’s the #1 most important thing I can do to increase my income from $60,000 last year to $100,000 this year?”
I said, “We can find that answer, John, but we have to do a deep-dive into your SMART Numbers and find it together. Are you willing?”
He said, “Absolutely!”
Following is the essence of our off-line session step-by-step. The numbers are real. The names have been changed to protect confidentiality.
So, John, how many closed sides did you have in 2016 to earn $60,0000?
That’s a little more than $2000 per closed side. And your goal is $100,000 in 2017. At the same rate, that would mean you need to close 50 sides. Are you with me so far?
Right. 50 closed sides at $2000 per closing is $100,000.
Let’s look at the ratio between sales and sold listings pended, or accepted, and those closed. In 2016 you had 15 buyer sales and 20 sold listings, that’s a total of 35 contracts to have 29 close. That’s an 83% close rate. At 83%, you need to get 60 sales and sold listings to close 50 of them. Let’s assume the same fall-through rate for next year. That means that 83% of your sales and sold listings will close, and 17% will not. OK?
The next step is to project how many of that 60 will be buyer sales and how many will be sold listings. In 2016 you had 15 sales and 20 sold listings for a total of 35. That’s 43% sales, and 57% sold listings. Using those same percentages with 60 transactions as the goal, you would need 25 sales and 35 sold listings in 2017.
That sounds like a lot.
It does, because it is. But you’re not starting from zero. You have momentum, you have 10 years of experience, and you have a Book of Business, right?
Yes, that’s true. It just seems like a much bigger number.
And that’s all it is. It’s just a number. Let’s put it into perspective. Of the 20 sold listings you had last year, how many of those people bought a house from you after you sold their house?
Actually, 9 out of the 15 did.
At that same rate, looking at the 35 sold listings you need, that would mean approximately 21 buyer sales as a result. 21 is 60% of 35. You would only need 4 more for the year to make up the 25 sales you need. That’s only one more buyer sale per quarter. Do you think if you marketed 35 listings that you would find at least 4 “extra” buyers this year?
Right, no problem.
So the sold listings will take care of the buyers you need. The real question now is, what do you have to do to get 35 sold listings? At the very least, how many listings do you need to get 35 of them sold?
I don’t know. How do I figure that out?
Good question. Let’s look at 2016. How many listings did you bring in?
I brought in a total of 24 listings last year.
And 20 of them sold, right?
There’s that 83% again. 20 out of 24 is 83%. Pretty consistent. Let’s take it a step further. You need 60 transactions (sales and sold listings) to close 50, and 35 of the transactions are sold listings. Take 35 and divide by 83%. Or if you want be totally confused, use algebra. I just use a calculator.
(Calculating 35 ÷ 83%) 42 listings! I need 42 listings to sell 35. But how am I going to get 42 listings?
Going back to 2016, you took 24 listings and went on 58 appointments. That’s 2.4 appointments per listing. Multiply 2.4 appointments by 42 listings and you need to go on . . . 100 listing appointments in 2017! That’s how you get 42 so that 35 sell and 29 close.
Look, John, that’s only 42 more appointments than you had last year. In fact, let’s reduce it to the ridiculous, and I think it will seem a lot more do-able.
Please. I’m having a panic attack. (Just kidding.)
OK, here’s a happier thought. How many weeks did you work last year, and be honest? All 52?
No, we took a couple of vacations.
And there were a couple weeks off for weather. And a couple more for holidays. And you went to Master Sales Academy and The Business Breakthrough. And a couple more weeks that you can’t remember. So is it fair to say that you could work 42 weeks this year and still have a life?
OK, I already see where you’re going. That’s only one more listing appointment per week for 42 weeks.
That doesn’t sound so impossible, does it?
No. I might be able to do that!
John, last year we did a study of all the people we have had in coaching since 2008, and divided them into two groups by listings, the top half and the bottom half. Then we took an average of how many listing appointments per week the top half went on compared to the bottom half. Can you guess what made the difference between being in the top half of listers and the bottom half?
I’m going to guess it was one more appointment per week, right?
Exactly. And I mean it was exactly one more listing appointment per week. One more per week was the only factor the top half had in common. It wasn’t market, age, weight, height, gender, company, experience, you name it. Nine years and hundreds of students and the numbers always turn out the same.
OK, I got it. But now I have another problem. How do I get that one more appointment?
I am so glad you asked. Again, let’s look at recent history. Last year you had 910 qualifying conversations to schedule and attend 58 listing appointments. That’s 15.7 conversations per appointment. Multiply 100 listing appointments by 15.7 and you get how many conversations?
That’s right. And that’s only 660 more than last year. Oh, boy, you’re going to love this. 660 more conversations divided by 42 weeks is 15.7 conversations per week. With 10 weeks off for good behavior. You have 15.7 more conversations per week and you will get an average of one more listing appointment per week, which will result in 42 listings, 35 of them sold and 29 closed. The buyer sides closed take care of themselves, and you have 50 closed sides and $100,000, my friend. Any questions?
Yeah, how do I have 15.7 more conversations per week?
Make more calls. Dial more numbers. And you will have more conversations.
How do I make myself make more calls?
Ah, now we’re down to it, aren’t we? Because the truth of the matter is . . . You can’t. Even with all this logic motivating you, we’ve learned it is next to impossible for any given individual to make him or herself make more calls than they have already been making.
So, what is the answer?
Do you have a 5-90-10 partner?
Have you ever had one?
No. I’ve wanted one, but never found the time or the right person or something.
Well, a reliable 5-90-10 partner is the key to enjoying that $100,000 income, because unless you are one of those ultra-rare, extraordinary individuals who is 100% self-motivated and disciplined, only a 5-90-10 provides you with just enough accountability and teamwork to get you to dial more numbers and have more conversations. We call it the magic of shared misery.
What do you mean?
Face it, John, nobody enjoys prospecting. It’s too easy to set it aside. To rationalize it away. To substitute something a little more fun. To conveniently forget. You know, shrinks call it avoidance behavior.
Yep. Totally familiar with it. You might say, a little too familiar.
It’s easier to get it done when you know someone else is counting on you to help them do it, too. Put the word out this week, and I will keep my eyes and ears open for you as well, that you want a reliable 5-90-10 partner. Can I get your commitment to put that in place this week?
That’s a promise, Mike.
Thank you, John, we’ve discovered the one thing that will make all the difference. One more listing appointment per week.
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