100 Leads Are Worth More Than You Think. Here’s the Math.
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Profit Activator 3. Only 15% of the people who buy do it in the first 90 days, so 85% of what your hundred leads are worth hasn't happened yet.
Good morning.
Day four of Profit Activator week, and we're into number three.
Educate and motivate your prospects to meet you.
Everything up to here has been about getting the right hand in the air. Now we've got a bundle of people who raised it, and this is the most valuable part of the whole thing.
Let me set the context first, because I don't want to be misunderstood.
I am not saying take the long view. I'm not saying ignore the people who are ready today.
If somebody's ready to go right now, that's perfect. Let's go. I want to convert people as soon as we possibly can.
What I want you to see is what you're actually holding.
Because most advertisers approach this like a slot machine.
Pull the lever. Did somebody buy? No? Wasted money. Pull it again.
And if the machine pays out before the credit card bill is due, it was a good month. If it didn't, the leads were no good.
That's the whole model. Return on ad spend, measured by Friday.
Back in 1997 I was working out how to generate these leads, and I found a study that changed the way I look at all of it.
There was a company doing inquiry handling at an enterprise level. Millions of leads a year, across every industry you can think of.
And they ran what they called did you buy surveys.
They'd take a cohort of people who inquired about something eighteen months earlier, call them up, and ask exactly one question.
Josh, you came to the home show and asked about faucets. Did you buy any faucets?
Here's what they found.
At the eighteen month mark, just over half of the people who inquired about a thing had gone and bought that thing.
More than half. People eventually buy what they raise their hand about.
But only 15% of those buyers bought inside the first 90 days.
That's the number that reorganized my thinking.
85% of the value of the leads you generate today is 90 days or more away from you.
Now, 90 days feels like forever when you've just spent the money.
I saw it most with realtors. They wanted to run an ad, have somebody call this week, go and look at a house on Saturday, and put a sign in the yard on Monday.
Then I did this for enough other businesses to realize everybody's like that. Everybody wants the right now business.
I mentioned time travel the other day. Let's go back to it.
Imagine we could leave tonight at midnight and land a hundred weeks ago, and we could carry with us the list of every person who's going to sell their house over the next two years.
Everybody loves that idea.
But look at what you'd actually be holding. The person who sold last month? The moment you land, they're still 23 months away from doing anything about it.
You'd still be waiting. You'd just be waiting with certainty.
And certainty changes everything about how you behave in the meantime.
So the question you need to answer is not are these good leads.
Good lead is an emotional phrase. What people mean by it is somebody who's ready to buy right now, and anybody who isn't feels like a disappointment.
The objective question is what happens to this bundle of a hundred people over the next hundred weeks.
The studies say over half inside eighteen months. I like to be conservative, so I stretch the window to a hundred weeks and I round the number down to 50%.
Fifty people. Go and do that math on your own number. If your thing is $10,000, work out what that bundle is quietly worth to you.
Now, about the first hundred days.
I think of it as the Van Allen belt.
If you're going to space you have to get through that band of radiation and pressure first. That's the hard part, and it takes everything you've got. But once you're through it, it's effortless. You can go all the way to Mars.
Same here. Get through the first hundred days with a bundle of a hundred people and the rest of it costs you almost nothing.
Most people never get through the belt.
One of my quiet delights is looking up the people other advertisers gave up on.
They run ads for our sell your house for top dollar book. Leads come in at $5, $7, sometimes $10. Then they start calling everybody, looking for a listing today.
Around the 90 day mark they get antsy. Nobody's listed. These leads are no good. We'll spend the money somewhere else.
There's a fellow in Texas who did exactly that. Generated 130-odd leads and walked away from them.
Real estate is public record, which is the great gift of that market, so I can just look them up on Zillow.
At the eighteen month mark, 30-something percent of the people he abandoned had listed, or sold, or have their house sitting on the market right now.
He was standing on it the whole time.
And this is why I think in bundles and never in individuals.
One person is unpredictable. There's no useful way to say what one person is going to do.
A hundred of them is arithmetic. Fifty are going to do something over the next hundred weeks. Eight of them are going to do it inside the first hundred days.
Which gives you a real goal, and a much better one than chasing everybody. Find the eight.
So phase one of Profit Activator 3 isn't a tactic at all.
It's realizing what you've got. Treating a hundred people who voluntarily told you what they're thinking about as a capital asset, not an expense you have to justify by the end of the month.
Tomorrow we'll get into what you actually do with those hundred people.
Here's your nudge for today.
Take your last hundred leads, whatever they cost you, and do the arithmetic. Fifty of them buying over the next hundred weeks, at your price.
Then look at that number and ask yourself honestly whether you've been treating those people like an asset worth that... or like a lever you pulled that didn't pay out.
Transcript
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Good morning. Okay, I am bubbling with excitement for you today because if you've done or do the things that we talked about in Profit Activator 2 and we've separated the compelling from the convincing. If we're doing all those things, that means that we are compelling your best future prospects to raise their hand and make themselves visible to you. And when we move now into profit activator three, which is educate and motivate your prospects to meet you, that's the most valuable part of this.
This is the thing where we're going to nurture these relationships with people and understand that some of them need your help right now and we don't want to get in the way of them getting your help right now but many of them are just starting their journey of needing your help at some point in the future. So I want to set a context for you and I want to do it in a way that you completely understand that I am not saying that we're going to take the long view so that we're only worried about converting people in the long term. That's not what I'm talking about at all. I want to convert people as soon as we can.
If we can get if they're ready to go right now, that's perfect. But I also want you to understand the value of what you actually have. Now this is something that I've learned over 30 plus years of experience of generating these leads. So at this time you remember we're back now in 1997 and I was figuring out how to generate leads.
I could get people to raise their hand. And I was also, as I'm doing it now for other people, I was realizing that most other people, most advertisers, they're used to they take this slot machine mentality that they're pulling and they want to get the instant jackpot. And if they didn't win right when they pulled the lever, they looked at that money that they put in before that as wasted. They're just putting in putting in until they get somebody to buy right now.
And if it happens that they made more money than what they put in the slot machine, they were happy about that. And if they spent their money and they didn't get the money back, they were unhappy about that. So I really started diving deep into understanding lead management and lead conversion and I found a study that changed the way that I look at all this. It completely explained it.
There was a company that in the 80s and 90s and they may still be around now that did inquiry handling on an enterprise level for companies of all kinds. people who were uh inquiring for information and they did something that they uh that really changed the way I look at this. They uh created a concept that they called did you buy surveys. So they're generating millions of leads a year across all these industries.
And I imagine that they were having conversations with sales teams who were at these corporate levels that were getting these leads and maybe they're saying these leads are no good. And that's often what people will say when you start generating um you know inquiry leads in the beginning that the temptation is to think oh nobody bought right away. These people these leads are no good. And what they did was they took a cohort.
They took samplings of people who inquired 18 months ago across all industries. They would call them up and they would just ask one question. They'd say, "Josh, you came to the home show. You inquired about faucets.
Did you buy any faucets?" That's all they wanted to know. We sent you a catalog about the refrigerators. Did you buy a refrigerator?
Whatever it is, what they found was fascinating. They found that at the 18month mark, just over half of the people that inquired about anything would buy what they've inquired about within that 18-month period. But when they asked when they had done it, they found that only 15% of them who bought bought within the first 90 days. So that means that 85% of the value of a bundle of leads that you generate today is going to be 90 days or more away.
Now, the challenge when I start getting people to to generate leads is that 90 days seems like a super long time for them. Most people, I found this with the realtors especially, that they were looking to run an ad and somebody to call and go look at a house this weekend and buy it. And that's what they were looking for to call them and they would go and put a for sale sign in their in their house. And as I started doing this for more and more businesses of all kinds, I started realizing everybody's like that.
Everybody wants the right now business. And the entire industry is built up around this idea of return on ad spend that that you're getting the running the ads, you're sending them to a strategy call or to a webinar and you're pitching them and they're buying right now. And if you can do that and make enough money to pay for the ads by the time the credit card bill is due, they look at that as a win. And there's it's very shortsighted.
You're starting to realize that you're missing out on so much more. So, I mentioned in uh one of the previous videos in Prophet Activator 2 that imagine if we could time travel back 100 weeks ago, 2 years, and we can leave tonight at midnight, but we can before we go get a list of every person that sold their house in the last two years or every person that got a deck in the last two years or whatever it is that you do. If you knew that we could get a list of everybody in your marketplace that did what it is that you do and we could land two years ago, how much more money do you think you would make if you knew that those people were going to buy? Now, everybody feels great about that idea, but what they don't really take into account is if we go back 2 years from now and we're armed with everybody that sold their house, that means that the people who sold their house last month, they're still 23 months away from selling their house when we land 2 years ago.
know, but wouldn't you feel good about knowing with certainty that those people are there if you knew that people are going to uh that are going to buy? So, if you look at your thing, and I've seen this play out enough to know that the question that you really need to answer is not are these subjectively good leads. And by good leads I mean that people are emotionally excited about people that are ready to buy right now and they anchor that as that's a good lead. And if people are not ready right now they are not as excited about it.
But if we look objectively at what's going to happen with this bundle of 100 leads over a 100red weeks if we just be conservative you know all the information from the studies show that over half of the people in 18 months but I really like to be conservative so I take and I extended it to 100 weeks and I lowered it to 50%. %. So if we take 50% over the next uh 100 weeks are actually going to buy, just do the quick math on how much that would be worth to you, right? If you're if it's a $10,000 uh thing, that's going to be amazing.
One of my favorite um you know delights that I take secretly is finding the people who give up on our ads for the sell your house for top dollar fast uh book. We have I've seen this play out that people will start running ads. They start getting these leads for $5, $7, even $10 sometimes in a place. They generate all these leads and they start calling people looking to get the listing right now.
And that when they find that, well, a lot of those people are realtors or these people didn't return my call or they didn't they only look at the bad of what happens and nobody has called them to come and list their house yet. So, they start thinking these leads are no good. And it, you know, I I hear it all the time. And I look at this first 100 days for people as getting through what I call the Van Allen belt.
It's like if you're going to the moon or going to space, you have to get through that area of radiation and pressure getting through into the atmosphere. But once you get into space, it's effortless. You could go all the way to Mars once you get through the Van Allen belt and into uh into space. And it's the same way here that if you can go through the first 100 days with somebody and with a bundle of a hundred, not one person.
And I always think about it in groups, too, because it's so unpredictable to say what one person is going to do. there's a 50/50 chance that this person in the next hundred weeks is going to buy. But when you think about it as a hundred of these that 50 people are going to do something in the next uh 100 weeks that is worth investing in. So one of my favorite things to do is to look at the people who those people abandoned.
had several people all over the country. They run the ads and then right around the 90day mark, people get antsy. They've been investing money on generating these leads. They haven't sold uh anybody yet and they are abandoning.
They said, "This isn't for this doesn't this isn't going to work. We're going to spend our dollars on on something else." So, I take all of those addresses of the people that asked for uh the the book and I look them up on Zillow. This is the greatest thing about real estate is that it's all public record.
You can see when people list their house and I'm thinking about one particular person in Texas that was running these ads. they generated 130 something uh leads and when I looked at the uh the ones over uh it's hasn't quite been uh u two years since they abandoned November of this year will be two years since they abandoned but to 18 at the 18month mark 30 something% of the people who responded had actually listed or sold their house or it's currently on the market right now from the people that they abandoned that they said there's no good leads in here. So, I love to like add these up and and see this because I see proof of it again and again. So, just to let you take this in that in Profit Activator 2, we're looking to load up a bundle of hundred people as a cohort.
So, you're doing a fence and gate catalog or you're doing a stop your panic attack book or you're doing something that gets somebody to raise their hand and you've collected a hundred of those people is let's do the math on what it would mean if 50% of those people did something over the next 100 weeks. And that's pretty motivating, right? and you start thinking about what the actual value of it is. And if we take even the first 100 days, if we take that 15% and let's just round it.
So we take a 100 days that there's eight people that are going to do something in the first 100 days. And your real goal is to see if we can identify those people. That's where we're really uh doing it. So phase one of profit activator 3 is realizing what you've got, what the value of this is, and making that capital investment approach of the asset of a hundred people who voluntarily told you that they're thinking about selling their house for top dollar or they want to stop their panic attack or they want to build a deck or build a fence.
Whatever it is, we've separated the compelling, we've gotten them on board, and now we need to do the convincing. So, tomorrow we'll talk about now what do we do with those hundred people? I got a funny email the other day from Rick. It says, Dean, question.
Are you saying you can teach me to make fat stacks by hanging out at a pub drinking coffee like you? And I laughed to myself because I was thinking, you know, yes, I I can do that. That's what I do. Is the funny thing, what I really realized is that every idea that I've had, every dollar that I've made over the last 30 years has gone through my brain, through my pen onto a piece of paper in my journal before it went out into the real world.
And if I can turn people on to that activity as a driver for what to do, what to think about, what to ask yourself to draw out, what the next most valuable action is for you, and how to find the most profitable things that you can install in your business. I'm all for it. m. I'm going to do for the first time a 50inute profitfinder workshop and you're going to join me live on Zoom and we're going to go through a 50inute exercise.
Bring your pen. Bring a notebook or piece of paper. And I'm going to guide you through a thinking process that will help you identify where the lowest hanging fruit is in your business and maybe some fruit that you didn't even know was there. But I'm going to show you where to look for it.
So, it's free. It's for you. m. this Friday.
Just watch. Go to What did we call the website, Josh? >> 50inut profitfinder. m.
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