#191 Mail Right Show With Special Guest Lars Hedenborg
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Producing high quality and Low Cost leads without purchasing them from places like Zillow
Lars Hedenborg is the host of the Business Freedom Podcast and the founder of Real Estate B-School, an education and coaching program for top producing real estate agents looking to build sustainable, systems-driven businesses. Lars’ career in real estate began in March 2007 when he left his work in the corporate world. In his first year, he hustled to close 71 sales but was working 80 hour weeks, leaving his family life suffering. This motivated Lars to scale his real estate business. He grew a team that consistently sells over $100M in real estate each year while working only one day a week. Today, Lars is passionate about bringing real-world tools, systems, and strategies to top agents and team leaders so that they can achieve sustainable success and freedom in the real estate business.
Connect with free resources at RealEstateBSchool.com and book your free Business Growth strategy session at REBSstrategysession.com.
Jonathon: Welcome back folks to the Mail Right Show. It is episode 191. We have got great special guests for the show. Lars Hedenborg and he is from the real estate business school. And we’re gonna be talking about what’s worked for him and his team. Last year he did the over hundred million gross. And I think he’s going to tell us what the net figure is. I’ve already forgotten it listeners and viewers.
Robert: It`s a million dollars GCI. I’ll help you out.
Jonathon: This is fantastic. And he’s going to be telling us what has worked for him over the past couple years. What hasn`t, the transition from more traditional lead generation to this great digital world. Which me and Robert cover`s greatly. Robert, would you like to quickly introduce yourself to the new listeners and views?
Robert: Yeah, you said that word quickly, like you were hopeful. Like will you please be quick today? My name is Robert Newman. I’m the founder of InboundREM. I’m a real estate inbound real estate marketing expert. You can learn everything you want to know about me by going to inbound rem or just Google any of my competitors. Like Zurple, just about anybody else and you’ll find me on the first page of Google.
Jonathon: That’s great. And Lars would you like to do a quick introduction as well or do you think I’ve covered you?
Lars: Yeah, I’ll do the 10 seconds maybe. Maybe a little bit longer. So I got started in real estate in 2007 and just quickly learned that I wasn’t going to be a good agent. And I just build systems focused on marketing. And I just sort of replaced myself to the point where January, 2012 was my last closing. I’ve worked a day a week in that business for the last six going on seven years. And so it’s a system is driven business that’s based on some of the principles that you guys chatted about before we hit the record button.
Jonathon: That’s great. It’s going to be a great conversation. And I just want to thank you listeners and viewers. This is going to be a record month for the Mail Right Show. It’s going to be that if it continues the way it’s been this month is going to be an amazing month of downloads. And I really appreciate all the new people that have been listening.
Robert: We’re into the thousands of listeners.
Jonathon: You will be listening to this, but we must be touching the right spot. And I think we are. Because I think there’s a lot of agents interested in this area. So let’s start the conversation. How have you seen this change in how you are getting leads from let’s say three or four years ago to what you’re doing now? How have you rationalized what was necessary to change in your own business?
Lars: Yeah. And you kind of mentioned it before started. It’s the realization for some reason in the real estate industry. And I don’t know if it’s like this in other industries, we get these like major aggregators that come in between us and the consumer. And they maybe they spend 10 bucks to generate a lead that they sell to us for 120 bucks. And I never really went deep down that path of letting somebody else do my quote unquote marketing. To me, calling up Zillow and getting a zip code is not marketing. In our industry we actually call that marketing. And so as an industry, I don’t think we have figured out anything about like fundamentals of marketing. Now you mentioned digital and inbound and putting a message out there that people can find or catch to and want to reach out and do business with you.
And so we don’t pay for leads at all. And that that’s sort of shocks some folks. We did like $49,000 of marketing and advertising spend in the first quarter on like 800,000 of gross commission income. And so the most team leaders I’ve talked to, team leaders that are spending like a guy that did 1.3 million top line spending $47,000 a month on Zillow. And he’s like, my marketing spend is $47,000 a month. I’m like, no, it is. And you’re not even a marketer. You’ve never even thought about what marketing is. So I just see this turning point now that it’s clear that if you’re not in the content game, in the digital space, getting a message out there, looking for, serving buyers and sellers and just adding value and then telling the stories of those that you’ve served at a high level. It’s going to be really bad for you in the future.
Jonathon: Yeah. I was on a webinar this morning and the presenter was really spelling out two things that are really affecting agents. That is lead inflation and there are so many so called leads out there that are basically is more leads out in the population of the US. And most of them are cracked leads and they’re been resold and repackaged. The other thing is that commissions are under pressure from the discounters. And if you can’t show your value to your target audience, you got a bit of a problem there. Because the discounters are pressurizing the margins. So it’s a kind of a semi pincer movement. Would you agree with that Lars?
Lars: Yeah. And that is that essential to this conversation because, so I use the analogy like, um, I went to a Zach Brown band concert on Sunday night. I’ve been to top golf, which is like a freaking futuristic driving range for golf. I’ve been to the gym, I go to lifetime fitness. It’s like a Billion Square foot facility of state of the art everything. I drive Uber, I go to the apple store and then I’m expected to go meet with a real estate agent. That is a complete joke. And so like we just don’t view our profession as competing with everything else that’s going on with the buyers and sellers we want to serve. We’re not even viewing like what we do as part of their, like to the standard that they expect. So that’s the first shift is the consumer shift.
And then we have in Charlotte, we have three of the majors, so Zillow, an offer pad and whatever the other one is, the I buyers. So they’re just coming in, I’ll buy your home, you know, you can just buy the next home and we’ll make it a seamless transaction. There’s that shift. And then there’s technology, I mean, technology has barely scratched the surface of what it’s going to do in real estate. And then we’re just due for economic shifts. So it’s like this perfect storm of shifts that are going on where if you’re relying on like buying a lead or you know, you’re going to be out of business and it’s about story. It’s about content. It’s about doing a good job. You guys have probably read the book thank you economy, by Gary V. And like just going back to the way business was done in like the 1950s. Like really caring for your clients, really establishing relationship, like basic stuff that real estate agents are so desperate for the next commission check, they don’t even have, have a clue on how to really do that.
So that’s where our focus is now. It’s doing a really good job. So we used to measure how many transactions out of 10 so what percent we will get a referral by the time we got to the closing table. So the time we left closing, we’d have a good referral in hand from our clients and it was one out of 10. It didn’t mean that we didn’t get them in the future, but we just tracked in that 30, 60, 90 days that from signing up as a customer to closing one out of 10. The last two years, we’ve focused on delivering an experience to them that is just unlike anyone in the whole land of real estate agents. And now we’re at five attitudes. And that’s only in a two year period. Our goal is to get the eight out of 10 closings.
We have a referral, a quality referral in hand before we leave that attorney’s office and a system for doing it. And then everything else is just content now and testimonials and social proof and all of that. So that’s kind of where the business has shifted and it’s still a direct response sort of, we don’t do any image advertising. I don’t have my name on my business at all. So everything we do is to get folks to take an action. And we do it differently. We used to do it with direct mail. We still do some direct mail. But now we do with text and email and, and those sorts of things.
Robert: So you’ve used a lot of key phrases. And one of my things is my belief of the people that listen to this show, Lars is probably, we probably collect a lot more people that are new into the real estate industry than we do beds. We have a few, but, but I think that our audience is mostly people that are trying to climb the marketing hill as opposed to people who are at the top and just trying to make some adjustments. So I’m gonna go ahead and regurgitate some of what you said. So we talked before the show and you used to use an expired listing strategy. And that was part of a direct mail strategy. That’s how you used to do it. You send out postcards to people and you’d have some clever verbiage on the postcards that it would then initiate a call. And my understanding your previous strategy correctly.
Lars: Yeah. And we still do a handwritten letters to expired listings.
Robert: Can you give please give us an example of what that letter says?
Lars: Yeah. So it’s a dear Mr. Jones. I noticed your house at 123 main street, uh, came off the market, would you consider selling it to a buyer prospect of mine.
Robert: Okay. And when you get a call, you have a team of people somewhere like taking those calls. Are you offshoring that or you are local?
Lars: We’re local, yes. And we only have 14 people on our team. And we have two people in inside sales.
Robert: Okay. But there is somebody there waiting to take a call.
Lars: That`s for sure.
Robert: Okay. All right. And then now you said your strategy has shifted. You’re doing emails, you’re doing text messages. So what are you using? Who are you sending those emails and text messages to? And how are you getting those names?
Lars: Yeah, so the same way we get the information. So in real estate we have a service and it’s not very expensive called the red x. And so it basically just goes into your MLS. It grabs the information on expired withdrawn listings and makes it easy for you to do things with them. And they’ll get cell phones and email addresses where they can sort have gathered that data from. So we write that handwritten letter and then we’re doing a series of emails and texts and phone calls as well.
Robert: Okay. That’s pretty cool. I’ve never heard that before. So number one users, in case you didn’t pick it up, I’m on the website right now. For those of you looking for a new piece of data. The name of the service he uses called www.theredx.com. So I think that’s pretty cool. It’s pretty hard for me to hear about something I’ve never heard of before. So I’m pretty excited that you just dropped a name that I’ve never seen.
Jonathon: I have never heard of him. We have to get him on the show, Robert.
Robert: Yeah, absolutely. So the red x and you can get the expires and then what you do is you email and texts these expires. That’s what you’re saying?
Lars: Yes. Yes. So direct mail, email, text and phone call.
Robert: Okay. Is the message still the same? Hey, I noticed your listing is expired. Would you, I might be able to get it.
Lars: Pretty much. I mean it’s they want to buy or a physical has a little bit different mentality than expired and expired is just pissed off. They already went with an agent. The agent didn’t get the job done. So they’re raising their hand that they need an agent and then fizbos is the same thing. They think they could do better on their own, which is, it’s about the craziest thing in the world. If you’re a really good real estate agent to think that you know, someone that has done it once or twice in their entire life can do it better than you is crazy. But we’ve got pretty good stats to back up our performance. So we’ve got a history of doing this a lot. As a new agent, I would say you could build. You could do 25 to 50 sides. And I’ll give the if in a second, but just on fizbos and expirers, in any market, you can do 25 to 50 sides. Just with three, four hours a day of focused new business development time.
And only 43,000 agents that have 2.4 million sell more than 25 homes. So it’s pretty, it’s like a really pathetic industry in terms of like there aren’t a lot of professionals. You are getting paid to do a thing that most agents don’t do even once a month. Like you helped one client a month, in my first nine months in real estate I had 27 closings and then 44 as a solo agent in my first full year. So at least I was getting the APP bats. I was getting, making all the mistakes, I’m paying clients. We don’t let that happen on our team. We have sort of a training program that we take people through. But yeah, so that’s pretty much that.
Robert: Awesome. So guys and with your patients here, John, I would like to, one of the other things that Lars is mentioned in the span of this meeting is he’s mentioned and you also mentioned pre meeting that for him lead generation is strongly centered around social proof. And he has a whole bunch on one of his websites.
Jonathon: I think that is a great thing Robert. But we can do that when we come back. We’re going to go for broke and then we’re going to talk about social proof. But we’re back in a few moments’ folks.
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Jonathon: We’re coming back. We are talking about this dismal industry. There is still great opportunities. You just got to have the right strategy. That’s what we’re here me and Robert and our guests. To give light to the right strategy that gets you great success. Back to you, Robert. And we’re going to talk a bit about social proof and bits of that.
Robert: So just to check on just something that Lars is saying for our audience’s sake. Listen guys, I am a strong believer in the same thing that Lars is. I believe strongly in systems and all a system is, is a series of things that you do. It gets you x result and then you keep playing around with the things that you’ve gotten by the system. And looking at the data and saying, is this getting me a better result? The closer to the results that I want or not. And that’s what Lars has been saying this whole time he’s been saying, I have a system I want to play around with my system to get like an 80% conversion rate as opposed to a 50% conversion rate. And it’s probably going to change is something that he could control some part of the system such as one of the things he’s using in both of the systems.
It sounds like it’s social proof, which I would be too and do on my own website. So we probably are using a different form of the same strategy. And what I mean by that is my website, which I’m going to show everybody, I’m not going to show my website, his website. For those of you that are tuned into the video, you’ll be able to see this. For those that are listening, I want you to imagine pretty pictures of real estate agents and wildly happy family situations because they’ve just made so much money. That is what Lars has on his website. So one of those social proof for his business school is. This is not the business he’s talking about right now. He has a real estate business as well, but the case studies. So as these pretty pictures, it’s like a collage of pictures of agents being happy and successful as a whole bunch of them. Am I right? Lars?
Lars: That’s powerful.
Robert: Okay. And then they connect into a video, is that right? Okay.
Lars: Yep. Yes. We did about 25, 30 minute case study. We just kind of decompose their success. The three tools they used from real estate B school. And yeah we run traffic on these case studies as well.
Robert: Okay. So that is the system because Lar’s produce the piece of content, like the actual social proof, of course you have to work at that. You have to talk to the people that have used your service. You’re making the assumption that you have case studies or results that are actually good. But if you do like I employ my social proof right next to my blog post because that’s where I feel like most people are going entering and exiting my website anyway. So here’s my social proof and it’s the same concept. It’s just it’s on Google. I don’t show the happy pictures of families, but it’s just people who’ve talked to me. What does that result has been. And if there’s any one thing I’d say 50% of my calls mentioned my social proof. They say, oh my God, you have 50 reviews. They’re all five stars. These people love talking to you. That’s the kind of thing that you build into a system when you’re a real estate agent as part of getting results. That’s the way I understand what you do.
Lars: Real quick, if you can go in the browser, just Google a high performance real estate advisors. Charlotte, I’m pretty sure there’s nobody else across the country, but we committed to. I went to a dentist appointment recently. And when I was checking out the person that works behind, like takes your money, she’s like, hey, having you given us a five star review yet on Google? And I’m like, no, I haven’t. She’s like, well, take out your phone. So I took out my phone, she’s like, pull up a browser, type in Ballantine Dentistry or Center for Dentistry. And she’s like, click, if you had a five star experience, click let’s say some kind words. And I’m like, and I did it. And I’m like. Do you get paid for that? And she’s like, yeah, I get paid for that. I’m like, that’s awesome.
I’m like, why? And the guy that owns this dentist he was doing radio, he started radio around the same time I did. And she said, well, our owners told us that mass media is not returning at all anymore. And so we’ve found the same thing that, you could spend $100,000 a month on mass media and it’s not going to work as well as a free business account on Google or Zillow profile. You know, in real estate there’s this still this Zillow profile thing. But we added 220 Google reviews in the last three months just by focusing and we put a system around making sure that happened.
Robert: And have you started to see a conversion rate difference in your listing?
Lars: Two listing appointments last week off of reading our Google reviews.
Robert: And I’ve experienced the same thing by the way. One last thing guys and I try not to plug this too hard. But there is, so not only is everything that Lars is saying and I agreeing with him 100%. I’m gonna stop the screen share, but I’m going to add one incredible details. So all of this is very powerful. Google, my business page is free. The reviews are going to get your business, but guess what? They’re also going to do? Google actually uses those reviews heavily in their hyper local search algorithm. Which means that the more reviews that you get, the more likely it is that you’re going to be on the first page for searches like Charlotte Realtor. Because Google is looking at the quantity and quality of the reviews that you have connected to your Google my business page in order to decide what positioning that you have inside your local search results.
And your local search results is anything where somebody takes a keyword that’s connected to a locally based professions such as Realtor. And sometimes in some cities they’ll even do the same thing with broader keywords such as real estate agent Charlotte as an example. And then they were turned to you something called a hyper local search box. Actually, you know what, I’m going to show that just for the people that are doing the video so that they can see what I mean. This is that, and it’s at the top of the search result to beats everything else. So if you are this company savvy real estate in Charlotte and you have 12 reviews. Not only are in the tops of the search engines, but now if you’ve used the social proof, like Lars is suggesting and I’m suggesting you also will be the first company. Oh and here’s high performance, 330 year high performance. That’s you. Yeah. Okay. So actually Lars is company which has 330 reviews. If I’m looking at this and I see these three companies side by side, I absolutely go for the one that has 335 star reviews, no doubt about it. And I call these guys first that that would be me. And I think yeah.
Lars: Savvy has probably 20, 30 times the number of agents we have. There are brokerage. Their footprint is huge across Charlotte and we’re 14 people. And we didn’t pay anything for that placement. To your point, it makes me happy that someone out of the market got the result because sometimes they know where your IP addresses to and they serve up stuff based on where you are.
Robert: Yeah. There’s actually quite a few factors with local. There’s how many citations you have, which is how many business listings here. And that’s why savvy is ahead of you is they have longer established business directory listings than you do. The amount and quantity of reviews that you have is only one of the factors. It’s not even the heaviest factor. You can’t beat out the super established companies just by getting a ton of reviews. But you can change your position. You can get in top three. You will get much better placement with reviews. But these guys probably had been around longer. Interestingly enough, savvy has more than one location. They’re both on here. The physical location, like where you are in comparison to where somebody is actually physically doing the search that matters. There’s a lot of factors that affect hyper local.
Lars: Yeah. Cause I’m not even like 1% as smart as you in that stuff. And I’m just happy that it worked.
Robert: Yeah. Which is no, which is brilliant and I’m super glad that you’re mentioning it. Because if somebody was to say, what’s the most valuable free strategy that I can employ like marketing wise as a real estate agent right now? And I think that my answer lately has been, you know what? I really honest to God think it’s probably create yourself a free Google my business profile and start to click reviews today. You can do all of that for free. You need no money, zero money and you could do it right now. And if you do it well, like you’ve done it, you will get on the first page of Google, you’ll be at the top of five or 10 high quality search results and your total expense will be zero.
So anyway, sorry I took the, we went off on a tangent.
Jonathon: I think that’s great insight. That`s what the viewer’s love. One question that have occurred to me Lars. Is that you said out of ten clients use to get two referrals. Then you got back down to five. Can you give some insight of the process and what you do to turn that?
Lars: Yeah. So I can break it down. I listened to a, I don’t even know what it was, but it was Jay Abraham. It was 93 referral systems by Jay Abraham and I think it was on Audible. And I think it was like a seminar that he did where he just recorded all these people saying their best referral system. And one of the guys said what he does with his clients. Is he makes it a requirement with working with me is that I want to do a great job and you’re going to give me a referral. So I can spend time, I want to do a good job for you. I can’t spend time finding my next piece of business when I really should be helping you. So I’m going to put everything I’ve got into helping you and by the time we’re done you are going to give me a referral.
Is that okay? Sign here. And I’m like, that’s pretty cool. And so then a guy in our industry and anyone can use this solo agent, team leader. A guy in our industry, real estate, Mike Hicks he’s a KW guy. He, if you go onto YouTube and do Mike Hicks promise, he basically role plays this. You’re sitting down with that. Like imagine you’re a seller, you know. Hey, there’s, there’s just one more thing before I let you go. You know, we have what we call the high performance promise. It’s, you know, a commitment to serving you at the highest level. We call it the Ritz Carlton Real Estate. Things may go wrong. It is real estate. We’ve got all the tools and systems to get you where you want to go. How’s that sound? Sounds amazing. And then so, but here’s the thing.
I need one thing when we do this and you do send me the name, email, and phone number of someone that will buy or sell in the next nine days. You know, could you do that? And then the last part is if we don’t get a referral, I’ll assume that we didn’t do a good job. We didn’t deliver on the promise and I’m just going to want to have a conversation with you about that. Is that okay? So it grounds it again, you ask the ask is in the middle, it’s this awesome Ritz Carlton you ask. And then you say, hey, if I don’t do a great job, can I just have a conversation about how we can get better? And people are like, yeah, absolutely. And then you get him to sign it. You put that piece of paper on top of the paperwork they just signed. And every client you sign has a direct ability. And then every time you talk to them, whether you have a team or you’re an agent, you’re saying, Hey Jonathan, how am I doing on the promise? And they say, either they say you suck, so let’s talk about it. Or they say you’re doing amazing. We’ll have you have you come up with that referral yet?
And so that one strategy is, I mean that’s going to be worth a hundred deals for us this year.
Robert: Abraham is one of my very, very favorite marketers in the whole entire world.
Lars: I got interviewed him once on stage. He was just a really, like I could tell he was a thousand times smarter than me. Because I didn’t even understand the questions he was asking me. It was so weird, but it was cool cause I know like I, I knew him, I already read all this stuff and I’d follow him and here I am on like a panel and he’s interviewing us and I’m just like, holy cow, what are you even talking about right now?
Robert: Yeah, yeah, and yeah. A guy that can get $125,000 from 10 separate people to sit down and teach them something he’s got, he knows a thing or two.
Lars: Yeah, for sure.
Jonathon: We are going to wrap up the podcast part of the show. Lars as agreed to stay on, for our bonus content, which you be able to see on the Mail Right YouTube channel. And also on the Mail Right website, there’ll be a full set of show notes there with the link to some of the services and products that we’ve mentioned. Lars, what’s the best way to find out more about you and the two businesses that you run and just get some of the great information that you’ve provided the show?
Lars: Yeah. We’ve got some free resources on realestateBschool.com. I’ve got a podcast I’ve got a free report that I give out about my journey and the pitfalls and the things I did right. But then also if you have any referrals, you know, real estate referrals, its highperformancerealestate.com. So when there’s enough, you know, even on realestateBschool.com, it’s, you know, we coach a very specific slice of the market. Its real estate team leaders. So folks that have added people to their team and now they’re looking to scale their business.
Jonathon: If I was one of those, I would be interested. Robert, how can people find out more about you, your knowledge and your wisdom?
Robert: As I said earlier in the show, because I like this, you know, you can Google any of my competitors that they’re Sink and Trulia or Zillow or, sorry, not those guys. Zurple. I’m on the first page of Google for all those things and you’ll click on, you’ll find the website. There you go.
Jonathon: That’s great. I love to say that was fantastic what Lars said about testimonials. Because the Mail Right system has a strong testimonial building functionality inbuilt into the system. And I’m a great believer of using Google business and the free side of Zillow to build up your testimonials side. If that’s interesting, go to the Mail Right website and book a free demo with me and it be me personally and I’ll show you the functionality. And I think you’re just going to be blown away by our system. We’re going to continue the discussion and also we have another great g discussion or another great expert for you next week, viewers and listeners. We see you soon. By