Earnings Calculator: Convert Net Income into GCI, Closings and Appointments for Real Estate Agents (FREE)

We’re all familiar with this scenario. You get a call from a vendor who wants to sell you leads. They start out describing all the features and benefits of the product. Then they tell you how much success other agents are having with their products. And then comes ‘the line.’

“You only need to sell one house and this product pays for itself.”

Wow, what a deal, you think. I only have to sell one house? Where’s the risk? Easy-peasy. Sign me up!

No. Stop. Don’t fall for it. As my good friend Admiral Ackbar says, “It’s a trap!”

Hang up the phone and run away. Don’t fall for it. You’re too smart for that sales tactic.

Let’s examine what that line actually means. Here it is again:

“You only need to sell one house and this product pays for itself.”

On the surface, it seems like a no-brainer. And that’s the point. The line works on us because it seems to represent a no-risk agreement between you and the vendor. They’re saying: ‘give me your money, and worst case scenario, you’ll sell one house and recoup your expense. Give a dollar, get a dollar. Win-win.’

But that’s not actually what’s happening here. What the vendor is actually saying is: ‘I’m not confident that this system will generate a lot of business for you, and I’m asking you to invest one dollar with me in the hopes that you’ll get at least one dollar back.’

Does that sound like a good investment plan? No, of course not. Why would you tie up your valuable dollars into an investment that only nets you a dollar back? It’s like putting your money into the world’s worst savings account.

Does this mean that any vendor who uses ‘the line’ has a bad product? No, not at all. They might have a fantastic product, and it might generate revenue of 10x to 20x more than what you invest. But with that line, they’re using an argument that won’t convince you or me (at least, not anymore).

So when you hear ‘the line’, don’t hang up. That would be rude. Use it to start a conversation about return on investment (ROI). You can say, “That’s great, but I’m not looking to just cover my costs, I’m looking for at least a 10x return on my investment. For every dollar I spend with you, I want to make at least ten. Show me how I can do that with your product, and we might have a deal.”

When you have a firm grasp of the ROI you’re looking for, you put yourself in the driver’s seat for these conversations. It will be much harder for you to make a costly mistake because you’ll be moving the conversation away from the emotional appeal of the no-risk, win-win charade to the rational place where every dollar in your business is put to work making you more dollars.

Every dollar spent on revenue-building activities involves risk, there’s no getting around that. With risk, comes potential reward, let’s just make sure the reward is big enough for us to take the plunge.

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