There’s a big, fat mistake most real estate investors make in their advertising which results in losing 30% of your potential customers. And to add insult to injury, this mistake also devours your advertising budget.
That’s the bad news.
The good news?
The solution is almost so simple that no investors even think about it. Making this one tweak can 10x your business, and nuke your competitors.
In this episode, legendary Facebook advertiser, Luke Charlton, joins me to reveal this mistake and how you can fix it.
Show highlights include:
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You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors. Like you get more leads and deals online, outsmart your competition and live a freer more awesome life. And now your host, Dan Barrett,
(00:42): I am here with Luke Charlton, the Ossie hermit himself. And I'm, I'm actually gonna start you off with asking about this story of why they call you the Ossie hermit. We're gonna get into what you do. If you guys are listen to this right now, you're a real estate investor you are doing online marketing. Luke is absolutely incredible doing what he does in terms of Facebook ads, copywriting, email marketing. There's so much we're gonna dig into. So we'll get into all the tactical fun stuff in a little bit. I, I wanna start with the Aussie hermit story. I read a little bit about Aussie hermit. Um,
(01:28): And so it it's, it's you, I'm kind of E exaggerating my personality bit there for entertainment effect. Mm-hmm
(02:11): So if you're listening to this, you're in the audience, I keep saying, if you're listening to this, if you're not listening to it, you can't listen.
(02:53): There's two parts in my business. So I, uh, I run ads for a small handful of clients. I don't have an agency. Um, I prefer to work closely with those higher level clients where I will actually run ads for them. Right. So I'll write their copy. I will manage the ads. So I've been doing that since 2016, spend over 16 million on ads. And generally there are other coaches and experts. I had worked with some real estate and mortgage, uh, brokers as well, mortgage, um, businesses. So I run their ads for them. And then I also work with them kind of like as a consultant, advising them on what to do after the ad campaign. Right. Cause it's not just about getting the click, you know, that's the beginning of the ad campaign. That's not, that's not where it ends. And I think that's where a lot of, um, that's what differentiates me, maybe from a lot of other advertisers, like, you know, someone just hires them to, you know, write an ad and, and manage it.
(03:46): But it's what comes after the click. And not even, not even just that first landing page, it's like what happens once they get onto your email list? How are you then, you know, increasing the lifetime custom value of those people that are coming onto your email list and then what are you selling to those customers after that? So why kind of help consultants throughout that whole cause that's the whole advertising campaign. That's really what you've gotta look at it as, especially in today's market where the, um, the ad campaigns are, you know, so expensive, you really have to have a backend in place to be profitable. And then that, that's the first part of the business. The other part is I coach other people how to run, uh, profitable ad campaigns basically. And I, and I keep that, that system is really simple. It's really just about just start by building your list with quality leads and then emailing your list consistently.
(04:35): I don't teach, you know, complex funnels, webinars, book funnels. I mean, I I've done them and I've created seven figure campaigns with them, for clients, all the funnels you can imagine, but for, for coaches and experts, real estate agents under six figures, just keep it simple is, is what I coach on that side of the business. And then once you're above six figures, sure do the more complex stuff. I, you know, it, it's interesting that you point out that so much of the, so much of the marketing life cycle, right? So much of the sales cycle is after they become a lead. And it's something that tracks for real estate investors as well, where on average, about 60% of the deals that an investor is going to do from the leads that they generate online are gonna come anywhere between like two and six months after that person actually converts and becomes a lead.
(05:29): Right? So when you look out, you you've obviously worked with a ton of different businesses in real estate, outta real estate got a ton of experience. Like I said, $16 million in ad spend. So when you look out at the marketing that people are typically doing is the biggest mistake that they make simply not following up or emailing enough, or like where do people typically fall down in, in the kind of long term life cycle of, of a sale it's literal. I literally just been redoing a, my webinar presentation to sell my, the course that I just mentioned. Yeah. Um, my email course, and I've been, uh, working on the bit where I talk about this actually about how I don't have you heard of chat homes at all? He was yeah. Ultimate sales machine. Yeah. Yeah. So chat. Yeah. SOS. He, he was Tony Robbins business partner for those that don't know, and he's not alive anymore, but he had this thing that he called the, the buyer pyramid.
(06:22): And when I first read about this, I was really struggling in business cuz I was trying all these complex funnel. This is like back in 2014 and I read this thing that Che put together called the buyer's pyramid. And basically he said that, um, in any market, cause he worked in many, many different markets, uh, did a lot of research and he basically said in any one market at any time, the market broke down like this, right. So 3% of people are ready to buy today. Then the next six to 7% are open to buying. Then the next 30% are, um, they're kinda like the, the researchers they're not ready to buy, but they're kind of like looking around and the next 30%, like not thinking about, and the final 30%, they just, they just won't buy. And so what everyone, um, tries to do is they go after the, you know, the 3%, right.
(07:10): And that maybe 67% that are open. Cause they're so desperate for clients. But the real opportunity is in that next 30% because, um, no one goes after that, right. That's like the blue ocean, the researchers that aren't ready today. Um, but will buy one day, as you said, usually that's like, you know, maybe, um, say two to six months, two weeks to six months out of, you don't know when they're gonna buy and that's the thing you don't know when they're gonna buy, but they will buy. So how do you ensure that they think about you when they buy and it's, it's very simple and everyone's heard about it, but they don't do it and you follow up. Right. Um, and the number one way to follow up online is with email even today, even with bots and um, all the other tech S SMS email is the number one way.
(07:53): That's why it's still the most, um, the most profitable marketing method. So you have to have email as part of advertising campaign, if you want to, you know, to be as profitable as PO possible. So in terms of like, what was your question? What's the number one mistake they're making. Yeah. Yeah. When, when it comes to their ad campaigns, was that the question? Yeah. Or just in that long term kind of follow up process? Uh, I think I said, yeah, just not implementing one, I guess not implementing one. Yeah. And so what I teach is as the first thing in your business, cause it's so important. Cause that's where most prospects are. They're not ready to buy today, but they will be is you, you have to have a follow up sequence. Like that's your first marketing. Um, it's not, you know, it's not a funnel, even though funnels can be great.
(08:34): It's, it's getting an email list and following up consistently getting that in place first and then you add funnels later. So yes, I would just say having a follow up sequence and then just descending. Um, I, I send one email per day. Uh, and the way that I send emails is a bit different to what a lot of people are used to because, um, and you can't really send emails like you could maybe 10, 15 years ago where you just sending in content, cuz people get bombarded with so many, so much content, so many marketing messages, right. You have to email differently than what you did before. And we can talk about that if you want. Um, you have to email the way, well, let me, let me maybe transition to that because I wanna take a step back. I I'm personally very curious and I really wanna hear what you're about to say, but I think from, I'm gonna, I'm gonna try to do the audience to solve.
(09:22): Let me walk back a little bit. So what you were saying, right. It's so critically important, I think for real estate investors to hear right now. And so when real estate investors go out and they try to find leads that are gonna turn into deals, the literal name for what they're looking for is a motivated seller. It's a motivated, right. And the sort of definition of a motivated seller I always use is like the idea, you know, the ideal lead for an investor is, uh, someone who, you know, the mob is coming to their house tomorrow to kill them and they're gonna, they need to sell the house and flee the country. Right. And so, um, that, that's what they're looking for, but you know, I, you were using the pyramid. I always use the, the metaphor of a, of a, sort of like a dart board where I'm like motivated seller is the bull sides right.
(10:08): In the center of the board. Yeah. But most of the board is not motivated. Right. They're, they're very degrees of researching thinking maybe someday and most investors have absolutely no process whatsoever for targeting anything. Other than that, just like you said, the tiniest top part of that pyramid people who are the most motivated. So if you are going to sit down with an investor and they're saying, Hey, you know, Luke, you know, yeah. I target motivated sellers and that's great. I have nothing in place for anybody else, nothing. Hmm. Where would you tell them to start? Is it like market research? Is it just reaching out to an existing list? Like how would you walk someone through maybe like the first two or three steps? Yeah. So I, yeah, I, that's a good question. So when it comes to ads, so I, I got a great case study example of this because I think even if you, even if you target motivated sellers and I think that's really great and this is what I help my clients do, there will still be people that won't buy right away.
(11:08): So let me give you an example. So I, uh, a client recently hired me, um, to run her ads and, um, the, her, her, her system to get clients is very simple. It's basically just advertised like a free guide, uh, on Facebook. And then they just go down an email order responder. It's like one email a day for 45 days. And what she sells is a done for you. Like, she'll do a lot of the work to set up the e-commerce store. So this is people that have never really run an online business before. So it's really like, it's a done for you. It's a very high price office. Minimum is 15 grand, I think it is. Okay. And, uh, and they did a lot of the work for you. So when she hired me, the, the lead man that they were using, the free guide was called like seven profitable eCommerce niches.
(11:52): And, and that's great to target people that are kind like in research mode, like kind of figuring out like what type of eCommerce or would I would, I wanna do. Um, that's fine. But what I did is okay, you know, cause she, her and results weren't that great. And she wanted a better quality lead. She wanted people, as you said, is motivated buyers. So I said, well, let's, let's change the free guide from that to something like, um, what are we using? Oh, it's uh, we changed it to nine eCommerce stores for sale. Okay. So one of the cool things that she does is she on her website, she, she actually creates the eCommerce stores, like ready to go so people can kind of browse and go, oh yeah, I love a look at that. I wanna buy that. So it's very cool. Like music that's cool.
(12:34): Demonstration and proof. Yeah. To show, um, it's almost like, yeah, like a catalog or like a brochure type thing. So I said, let's just take those nine, um, sites that you have for sale. Put 'em in like a free guide and just advertise that. But the point is like, it's called nine eCommerce stores for sale. So who's that gonna appeal to people, looking to buy an eCommerce store that a know what an e-commerce store is right. And are looking to buy. So they're motivated buyers. So we advertise that and that's getting us funnily enough. I didn't think it would actually get us our cheapest leads, but it actually is getting us quite you it's performing better in terms of lead cost than even the niche one. Even though it's a bit more of a even it's targeting more of a specific market, generally when you're targeting motivated buyers like that, your lead costs are a bit more expensive, but it's not a big deal cause they're much higher quality.
(13:21): But anyway, so we build our list and sure enough, we start getting much better appointments and she's her ad campaigns are a lot more profitable, but here's the thing, not everyone jumping onto her list is a buyer, right. There's still, there's still some in that research mode that wanna make sure that this is a good decision for them. So coming back to your question is like, if you're gonna do like an advertising campaign like that go after the buyers, like get them on your list and just knowing that not everyone's gonna buy. Right. So you might as well go for the top quality leads and still have a follow up place in process, uh, follow up, follow up process in place. And then once you've scaled that as high as it can go, then you, then you can go out to a more broader lead magnet.
(14:05): For example, I'm using like a lead magnet or a free guide. Yeah. But it could be like a webinar or whatever. Something that generates leads to it, like a, a broader, broader part of the market. So I would say like, yes, still go for the motivated buyers, get them on your list. And then you can scale out wider. Now coming out to your question, what does that mean? Like how do you scale out wider? That's where you would go to people that are more so the, a motivated buyers, typically someone who is a solu already knows the solution that they're after. Okay. So that's, so the example that I just gave is someone who knows that they want an eCommerce or, and they're looking to buy. So they're generally solution. So for example, people who know that they want someone to run their Facebook ads for them.
(14:45): Like that's a solution, that's a, that's a motivated, um, buyer. Whereas, um, the next kind of level down is a, is a, a broader part of the market. Someone who has a problem, but they don't know what the solution is yet. Right. So it's coming out to answer your question. If you wanted someone who's a bit more of a researcher that you're gonna then have to, uh, you know, you can get, they're generally like cheaper, cheaper leads. The downside of those leads. You have to educate them on why your solution is the best solution, broader market. So it's much more scalable, but you have to do a lot of education. Right. And that's the, that's the market that I advertise to. So I advertise to coaches that want more clients generally is that's my advertising campaign. So that's a problem focused market. So when they get on my email list, I have to educate them on why follow up is the most important thing.
(15:30): And that, that is expensive. That's an expensive process. Um, if you can, if you are ideally you wanna start with a solution focused or a motivated focused prospect, and then you scale out from there. If that makes sense. Yeah. It strikes me right. As what you're talking about. And, you know, someone may be listening to this and saying like, okay, you know, that makes sense. But I really want people to think about the potential economic impact of this kind of shift in perspective. Because like you said, right, you imagine, again, you were mentioning that she homes sort buyers, pyramid where the most motivated folks, buyers of sellers, whatever are the three to 6% at the top. And tho those researchers, the people that are aware of the problem, not aware of the solution, they're 30%, right. What's basic economics. Particularly when you get into a PPC platform where you are bidding against other advertisers, if there's a bigger supply of potential clicks and leads, the cost of those is going to be significantly cheaper to generate.
(16:29): Right? And so the cost per click on those folks I assume, is gonna be typically significantly lower. So even if a lower percentage of them are perhaps converting into deals immediately, your cost per lead might come down. And then if you convert them over time, that's a huge, huge segment of the market compared to what your competitors are all sort of fighting over. Is that true? Yeah. As I said, like, so I said, I was surprised that the cost per lead was less expensive with that solution focused market. Cause usually it's more expensive cause there's a smaller market. Um, but yeah, for the problem focused market, those broader markets, generally your lead cost is cheaper or your click cost then subsequently your lead cost is cheaper because it is a broader market. Um, like, so I run ads for a, um, company they're called super fast diet.
(17:19): They're Australia's number one diet. And the like the lead cost, there is super cheap. Right? Cause weight loss is such a broad market. You know, if we're getting leads for more than like a dollar 50 that's way too expensive. Uh, so where getting lead generally it's about, about a dollar per like email, like email subscriber for advertising a lead magnet as, as an example. So it's all relative, right? So yet your, your lead cost will generally a lot cheaper with the broader markets, which means that yeah, you are, um, you don't have to convert at the same rate as the other more ex you know, more solution focused ex expensively. So it is, it is a relative like that. You got, you gotta gotta know your numbers. Let's talk about email a little bit because, uh, and this is where, this is where we get into the selfish portion of the podcast.
(18:03): Email's never been my thing. Like I've just never been particularly great at it. It's always been, you know, in my marketers toolbox the thing that I'm sort of like particularly bad at. And like in a lot of my email follow ups, I'm just like, look, it's another email for me. And I'll just put a picture of my face, like, oh, weird. You know this. So, and I, I know for a fact that for most real estate investors, email follow up is typically kind of a, a second thought, right? It's they're typically following up over text. They might send an immediate email, but the, the kind of feeling is like, oh, people don't respond to email or whatever you said, right. In the beginning, you said, email is still the best way to reach people online. So why is that the case? Like, do, do you feel like people, when I say the best way sleeping on email, I'd say the, I didn't say the best way to reach them said the most profitable.
(18:54): Okay. So the most profitable, right? So, so let's, let's dig into that. Like what do people miss about email today? Like, cuz I'm sure people are gonna be like, oh, spam filters and Gmails got the thing or whatever. Like people kind of throw up their hands. What do people miss about email as a market feature? Well, let me come back to cuz this is where a lot of people, when I said, I, I didn't say the best way to reach 'em cuz you could reach someone with an SMS, right. Or a messenger. And they'll like the open rate is whatever, 80%, 70%. And, and that's what people say all the time. Well, you know, messenger gets 70% SMS. It's like, okay, but are you gonna send someone an SMS or a, a messenger, um, thing on Facebook or Instagram every single day, if you do that, they will get very, very annoyed, however, and you'll get blocked probably.
(19:39): Right. Yeah. Right, exactly. Right. You get blocked. However, you can do that via email. Right. Cuz email is a, is a different medium. It's a meeting where people are where they're expecting to receive content. Right? So you can have short emails if you can have long emails. But the point is that's a medium that you can actually send them content. Right. I couldn't send someone my, you know, three to 500 word email in messenger or at SMS, cuz again, people would block you, but I can do that and I can do it every single day. Um, via email it's different medium. So, but that being said, how do you, how do you email correctly? So one of the things that I did when I, um, knew when I read that chat Holmes thing, I'm like, okay, I'm sick of the, the complex funnels. I just want something simple.
(20:17): I'm just gonna build my list. I'm gonna email consistently. I'm gonna figure this thing out. Great. Well, um, my emails didn't convert in the beginning and, and it was very frustrating because like most business owners here, we spend a lot of time on our emails. We send out really great content, 10 and great information. And what typically happens, right? Is someone joins your email list and they'll read your, you know, your open rate. If you tracks individual people, the open rate will be quite high for the first couple of weeks. And then it will just go like, like it'll just die bomb. And um, you, you know, your open rate start to go down and that's the same thing that was happening with me. I was spending great content mm-hmm
(20:56): And so I obviously knew like what I was doing was not working. And the other thing that was really frustrating from, well, I, I did some, I wanted to do some find out like why that is. And so through this process of, of like finding out why aren't people paying attention, I kind of asked myself like what, what are they paying attention to? Right. And the things they're paying attention to are like, you know, social media, YouTube, multi hours down, Netflix, you know, watching movies and I'm thinking, well, what they're spending, you know, tens of hours each week at hours a day on social media, Netflix streaming. Right. And they're not, they can't even spend five minutes, you know, reading my emails, like what, um, you know, what's the deal here? What, what are these, what are these platforms? Is social media companies, Hollywood, what are they doing that I'm not right.
(21:48): The obvious answer is their content is entertaining. Mine isn't mine was just straight how to content. Right. So, um, what I started doing is I thought, okay, how can I use this to my advantage instead of fighting against it? How can I use it to my advantage? Mm-hmm
(22:49): This is the podcast factory.com.
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