Today on the Listing Agent Lifestyle podcast, we're talking with Justin Smith from Orange County, California.
I really enjoyed this conversation because so much of what Justin's doing in the industrial real estate market mirrors exactly what we talk about in the residential real estate market.
We went through all the ways of creating a 'Before Unit' to attract his ideal clients without making outbound phone calls, which is always my preference. Everything I do to engage people is framed as 'what would I do if my phone only accepted incoming calls?'
We went through the process of narrowing down to a single target market and thinking through how to get those people to raise their hands. Then we talked about ways to educate and motivate those people so when they're ready, they'll take the next step.
There's a lot you can extract from this episode that will apply to your market as well.
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Transcript: Listing Agent Lifestyle Ep113
Dean: Justin.
Justin: Yeah, Dean. How's it going?
Dean: How are you? I am so good. Justin. Where are you calling from?
Justin: Irvine, California in Orange County.
Dean: Okay. Okay. Are you safely on lockdown?
Justin: We are. Yeah. There's signs of life and today is day one of the grand opening of some retail, I think neighborhood pools, the beaches.
Dean: Wow.
Justin: So there's ... Yeah. So -.
Dean: How do you think that's going to go?
Justin: That's a good question. I think slow and steady. I think other than the beaches, probably.
Dean: Okay. Well, good. Lets fingers crossed. Everybody's eyes on you.
Justin: Yeah. For sure.
Dean: So, welcome. I'm excited. I've got my scheme hatching tablet in my comfy chair here. Ready to talk for the whole hour here about whatever we can do about whatever you're working on. So, tell me the story.
Justin: Yeah. I'm amazed about the progress you're able to consistently make, Dean. I did just a little homework of listening to a couple more episodes to make sure I had my mind right and was just all on the same page, and I'm amazed how many people you've talked with, and how many evil schemes you've hatched, and it's amazing. So, I appreciate you taking the time, and you know, focusing your efforts on my little nook of the world for a moment.
Dean: It's the nooks that make the world go round. That's the exciting thing.
Justin: Yeah. Well, just some background for you, I am a Strategic Coach client. I was for four years or so, took a couple of years off, and now I'm back in year three or four with Chad Johnson and we have our workshops in Santa Monica every quarter.
Dean: I love Santa Monica.
Justin: And then ... Yeah. And then this year, I suppose that the end of last year, I started my book with Tucker Max and Scribe Media.
Dean: Okay.
Justin: And so, I had my workshop in Austin in January, wrote the ... A vomit draft, as we say, over the past two months, and then I'm in my, maybe halfway through the first round of edits? And it's been a great experience so far. And nothing like going through a book writing to think through things like your avatar and make sure you're hyper-focused on your niche and thinking through your message and who your audience is. So, I thought I already had a decent focus, but I feel like that helped as well.
Dean: Oh, awesome.
Justin: So, yeah. And so that's just a little bit of a connection, I suppose. And -
Dean: Yeah, that's-. We had ... Did you ... So, i mean, I know Tucker very well. We had ... Joe Polis and I did a I Love Marketing episode with Tucker, and we talked about books specifically, because I have a company called 90 Minute Books, and we help people publish their lead generation books.
Justin: Mm-hmm (affirmative).
Dean: And so, it was a ... Yeah. Slightly different processes, but we had a great conversation about when the appropriate time for both approaches is. And so, that's fun. So, you started in January. You're almost through the first edits now.
Justin: Yeah.
Dean: and you'll have your ... When do you anticipate you'll have your book done?
Justin: My initial goal is by the end of the year.
Dean: Oh, okay.
Justin: And my guess is now with a little extra time on my hands, you know, maybe late fall or yeah. Somewhere around there.
Dean: Perfect.
Justin: It still seems like maybe it moved up a little bit.
Dean: And what's your ... What's the title of your book, or have you already ... Have you decided that yet?
Justin: I haven't, and that's a ... What a mental exercise that is.
Dean: Right.
Justin: And maybe that's a good segway, because I feel like part of what I do is hard to explain a little bit in short form, so that's part of the challenge of the book, and perhaps one of our evil schemes.
Dean: Okay, perfect. Well, let's talk about that. So, tell ... What is it that you do and that your intention is with the book then?
Justin: Yeah. I'm a commercial real estate broker.
Dean: Okay.
Justin: And my focus is one industrial property.
Dean: Love it.
Justin: And then with any good piece of real estate, you've got two sides of the table. You either have the buyer or the seller or the landlord and the tenant.
Dean: Yes.
Justin: And for me, I represent tenants in industrial property.
Dean: Okay.
Justin: I do some landlord work, but for the purpose of the book and what I would call half of the business that I do is on that side, so representing tenants in industrial property.
Dean: Okay. And so, that's a distinction over you're not doing office space. You do industrial space. Different-
Justin: Yeah. The layman will think a warehouse, and the nuance is the manufacturing plants, distribution centers, labs, or, yeah.
Dean: All those things are different and they all have different needs and they all have different, you know, distribution centers, of course, are going to have different needs than manufacturing. So, yeah. You're right. Okay. So, where do you ... Where is your market? Because that'll be the first thing is geographically mapping out your territory there. Where do you primarily focus?
Justin: Yeah. Territory is 80% traditional, so it's the county that I live in. And you'll find businesses migrant quite a bit within the area, so for me, it would be between Orange County and LA County. So, if you ... We've got the ports, downtown LA where are the materials from China come in and reside, and then where some of the big universities are. So, 80% of my world is just in Orange County and some parts of LA. Think within an hour of any direction. And then, if all goes well, some of those companies that I work for in Orange County will say, "Justin, you did a great job. We have nine other locations across the country. Can you help us with those?" And there are a handful of clients that I have where I have had that experience and then I will help them and I've probably done work in 15 states, maybe. But that's all like a follow on or maybe like a sign -
Dean: Yeah, part of your ... Yeah. Part of ... We would call that after unit. You're working with people that you've already helped with. Okay.
Justin: Yeah, yeah.
Dean: So, you've been doing it for 15 years you said?
Justin: I have. Yeah.
Dean: That's great. Now, the good thing about a focus like that is that is becomes now crystal clear, right? When you look at, so we say Orange County, 80% of your business is there. If we were going to get more business for you, that's where you'd like it to be too, I'm assuming? Right? You live there, you'd like to get more business in Orange County.
Justin: Without a doubt. Yeah.
Dean: Yeah. Are you ... What percentage of the market share would you have right now? Is there ... Are you dominating the market? Is there way more than what you're doing? Is there enough business there for you?
Justin: Yeah. I can tell you a number by market share, but I think the perception is that it's a bottomless cup, so it's -. All up to you, and yeah.
Dean: Okay.
Justin: It's the world of abundance, I would say where there's no shortage of places to look. It's just a matter of how you go about it and yeah.
Dean: Okay.
Justin: Yeah.
Dean: Great. So, the first thing that I would start looking for, because you're representing the tenants, not the landlords?
Justin: Correct.
Dean: Okay. So, you've got to now even ... That's a fantastic thing. So now, when you look at the market place there, I always get this tunnel vision sort of map, where in my mind I'm visualizing Orange County, and I'm eliminating everything except where these industrial properties are, right?
Justin: Yeah.
Dean: Just get a sense of that's what we're working with here. This is what's the total market is. And looking to kind of categorize these properties. So, if you're looking at spectrum from industrial condo units that are the smaller places up to stand alone buildings that are giant places, what would be your segment of the market? How would you see those different flavors?
Justin: Yeah. I love it. You know the business. Yeah, maybe there's four food groups, I would say. The four flavors.
Dean: There, that's a good way to think about it. Yeah.
Justin: Yeah. And so flavor one are the industrial condos and the small business parks, and then flavor two are the people that have grown out of them and reached scale. So, maybe that's 10 to 50000, 10 to 100, and that's my favorite flavor. And then there's the more institutional. Think like the e-commerce's of the world. And then there's the ... What they'll call the owner user market that is kind of like the single, freestanding buildings. Anything that's this ... The companies that have reached some form of scale and stability, and may own or may lease. That's generally the path that I focus on.
Dean: Mm-hmm (affirmative). And the stand alones are how much? What are the square footage ...
Justin: Yeah. Maybe like 10000 to 100000.
Dean: Okay.
Justin: Square feet. Yeah.
Dean: Yeah. And that's the ... So, the first one is these industrial condos, and they can be ... What would be the size range of those?
Justin: 3000 to 10000.
Dean: Okay. Okay. And then what was the distinction between the second one and the stand alones? The 10000 to 100000 square feet you had for the second group.
Justin: Thinking out loud, maybe I'd call those, for purposes of today, maybe we just call them three, I would say. So, if we have the condos. Those are the small. The owner user buildings that are the 10 to 100. And then the 100 and plus, which are usually like big corporations that just have distribution centers.
Dean: Yeah, okay. And your sweet spot is? Which ones do you like the most?
Justin: Is the middle segment. Yeah. That 10 to 100.
Dean: Okay. Yeah, okay.
Justin: They're big enough to be experienced and they're small enough that they're less bureaucratic.
Dean: Mm-hmm (affirmative).
Justin: And yeah. It's ... Got to love that middle market when you think of where there's room for opportunity and where there's -
Dean: Well that's what I always look at, right? Is the ...
Justin: Yeah.
Dean: I always look at that as the middle of the bell curve sort of thing. That's there I was like it.
Justin: Yeah.
Dean: In real estate transactions. Anyway, residential stuff too. So, if we look at it right now then, narrowing that flavor of the 10 to 100000, then what are the other specialty uses that would be in there? So if you're looking at warehouses would be different than manufacturing, which would be different than what else would be another niche use or primary use that people would have?
Justin: Yeah, so warehousing and distribution would be one, where you think of goods come in, they're stored, packaged, shipped.
Dean: So it's all about the ceiling height, loading bays, that kind of thing.
Justin: Correct. Yeah.
Dean: Yeah.
Justin: Yeah. So, and then you have manufacturing where you're making things, and that's power and parking for people.
Dean: Mm-hmm (affirmative).
Justin: And then you have, some we'll call R&D, research and development, some we'll call flex, and that's .... Has a lot of office build out and a lot of air conditioning for anything that's life science related.
Dean: Okay.
Justin: That could be medical devices, it could be laboratories.
Dean: Uh-huh (affirmative).
Justin: Yeah. Most fit in those three subtypes. So, even if you run a ... If you're a contractor or a plumber, there's no building that's the plumber's building. It's kind of like a mini version of the warehouse and distribution, or some will fit in some of the small flex buildings. But usually those three are the main categories.
Dean: Love it. Okay. And of those, is there one that you kind of gravitate towards or you find more ...
Justin: Yeah. I haven't ... I don't have a favorite there, I think.
Dean: Okay. You just do all. Are they equally active, or is one kind of the dominant thing?
Justin: Yeah. I'd say warehousing and distribution is probably what's most active.
Dean: Okay.
Justin: Because it fits most people's uses and is most prevalent.
Dean: Okay.
Justin: Manufacturing, right? You think of droves of manufacturers fleeing California for Arizona and Texas and that's the perception people would have you believe and is it partially true? Yeah, it is partially true, for sure.
Dean: Uh-huh (affirmative).
Justin: And then the ...
Dean: Yeah, that's once they leave, that's where ... Yeah, exactly.
Justin: Yeah, and then the life sciences is very strong based on the universities and the biotech sector in San Diego it's huge and in Northern California it's huge, and in Orange County, it's like medium and moderate sized. And I have clients and I really enjoy the space, but it's still like 10% of the market or less.
Dean: Got it. So, the warehousing and distribution, that usually is less likely to leave because they ... The whole point is you need to have a distribution point in Southern California. So, that's why they're there in the first place, right? They're not going to move your warehouse distribution for Southern California to Arizona.
Justin: Right. You may decide that you also need one in Arizona -
Dean: Yeah, exactly.
Justin: Or you may say ... Yeah. For sure.
Dean: Okay. So, when I look at this, of all the buildings that are suitable for warehouses and distribution, let's just narrow the focus to that initially.
Justin: Sure.
Dean: Because the same thing, the same thought process that we're going to go through here is going to apply to the same way to manufacturing and the same way to the flex space.
Justin: Yeah.
Dean: Because they're all looking for different things, right? They're all ... There are three different people. Three different use cases.
Justin: Yeah.
Dean: When we look at the warehousing and distribution market there, how many spaces do you think there are in your area there in Orange County?
Justin: Yeah. Each city has several hundred and the larger cities may have a few thousand. And right now, I'm focused on one city in particular, and I have a associate that started with me in January, and nothing like having a associate join you to also make you go through a mental exercise of, "Okay. Where are we going to spend his focus and his time and talent to help?" And so, we've picked a market that we already do well in and said, "Okay. Let's focus on being the master of this market." And that market has about 2000 of these types of buildings.
Dean: Okay, perfect. So, that's good. Now we're in the right area here, and what is the ... Well, let's talk about the economics of it first. What's the average commission or the average amount of money that you get for one transaction?
Justin: Maybe 25 grand.
Dean: Okay, perfect. And how much turnover do you think there is in this warehouse and distribution space in that one city that you talked about? Because I like that you've narrowed it down to the 2000 buildings.
Justin: Yeah, that is a great question. I'm guessing, and I'm guessing 200, maybe.
Dean: 10% turnover?
Justin: Yeah.
Dean: That sounds about right?
Justin: It does.
Dean: All right. So, that's a good thing. So, when you look at it now that that means that there's about $5 million. Is that what it sounds like? Is that what 200 times 25000? 200 times 25000 has got to be five million. Yeah.
Justin: Yeah. And you know what's helpful about that is that for these companies, they don't have to move to need you. Even if they stay where they are, they still need you to help negotiate their extension.
Dean: Okay, perfect.
Justin: So I do think that when I think of turnover, turnover doesn't necessarily have to mean amount of companies that have moved in or out. It's probably that the total amount that have transacted, so to speak.
Dean: Well, I bet the turnover's probably even higher than that. Or the actual transactions is maybe higher than that.
Justin: Yeah. If you think the average is between three and five years that companies sign up for, right? That would tell you 20 to 33% of any given market, yeah, have some form of turnover.
Dean: Yeah. So, in any event, there's somewhere north of five million dollars of that total market available.
Justin: Floating around, but fitting. Yeah.
Dean: yeah. Somebody's getting that. somebody's being paid that. Right?
Justin: Yeah.
Dean: So, it's out there. Now, when I look at this, my first order of getting my thoughts around it first is to plan to dominate that market, right? So, you go in, you say, "Okay. If I'm planning on dominating this" Like, when you look at this, especially over the long term, right? That if we look at this as a 10 year situation, you've already been in for 15 years, if we look at this over the next 10 years, that's a $50 million opportunity.
Justin: Yeah.
Dean: Right. And so, that is a pool worth investing in and trying to gather that, you know? So, when we look at it, the 2000 spaces that are there are ... Those people, whoever are in those spaces, those are the pool that we want to influence right away, right? In terms of they're either going to move or renew from the space, and if we looked at it that there's a good chance that 20 or 30% of them are up for renewal this year, right? When you look at it that way.
Justin: You are on the path, yes.
Dean: Okay.
Justin: Yeah.
Dean: So, when we look at that now, who among those companies is the person who makes the decision? Or who ... How would it come about that they would make that leap?
Justin: 90% of the time it's the CEO, and 10% of the - Yeah.
Dean: So, it's the CEO making the decision and reaching out to you to say, "Hey, what have you got space-wise?" Or "We need to move." Or how ... Who-.
Justin: Correct.
Dean: Who are you actually dealing with?
Justin: The CEO, yeah.
Dean: Okay.
Justin: So, it's we got to do something here because ...
Dean: Right.
Justin: We need to make a long term commitment that's ... Has a good sized financial impact to the business.
Dean: Yeah.
Justin: And then for any of these guys, if they need to move, the cost to move is usually on the scale of several hundred thousand. Maybe 100, 200, 300 thousand. And it can be more, but that's your ball park.
Dean: Yeah.
Justin: So, you don't want ... You generally don't like to spend a couple hundred thousand without taking a good hard look at what you're doing and why and without having someone that's authorized it or taking ownership of it, and that's-
Dean: Yeah.
Justin: So, the biggest of the big will delegate some of this stuff, but I feel like the middle market, it's still the executive likes to be in charge of it, or likes to have a close eye on it or influence on it, and yeah. So, that's who I target and that's who I focus 99% of my attention on.
Dean: Perfect. So, I think that what ... Things that I might be looking at is that if somebody's thinking about making a move, somebody's thinking about going into a new space, what are some of the things that they're going to be thinking about or wondering about in preparing to make that decision?
Justin: Yeah. Sometimes it starts with what they think they will get from the landlord they already have for the next length of time.
Dean: Yes. - It would be helpful for them to know what the landscape of rental or lease options are, right? Like what's the -.
Justin: For sure.
Dean: Landscape for this right now. And this is so very similar to the residential approach that we take, right? If somebody's ... We have talked about ... I've heard and go through this process with our real estate agents about selecting a single target market. So, let's say lakefront homes. You're in Winterhaven are the most expensive homes, and that the first thought that anybody who's thinking about selling their house is going to have is, "Well, I wonder what I get for my house? I wonder what my house is worth right now?"
Justin: Yeah.
Dean: And so ... Yeah. So, when you start that process of these CEOs thinking about the move, it might be a valuable thing for them to have access to the May, 2020 report on Orange County lease prices. Where -.
Justin: It's amazing how similar the nuts and bolts are, for sure.
Dean: Yeah, absolutely. Because the psychology is the same.
Justin: Yeah, correct.
Dean: Right?
Justin: Yeah.
Dean: They have the same ... When they leave the warehouse and go home to their lakefront home or their oceanfront home or whatever, they've got the same brain, and it's the same motivations and the same thinking process that they bring into their role as the CEO of a company that requires warehouse space.
Justin: You're not moving your wife and kids for a different pool, but you're still moving your employees and your coworkers, and your machine or your - to, yeah. For sure.
Dean: Yeah. Absolutely. So, when you start to think about that, I think that there's that great opportunity there. Now, the really good news is that because you're transaction value is so high and the turnover rate is so relatively high compared to residential real estate. You know, there's probably more movement going on in the warehouses than the oceanfront homes kind of thing, you've got a great opportunity for educating people here, you know?
Justin: Yeah, yeah. For sure. It is amazing, because when you think of residential, once you own, you may stay in your neighborhood for a period of time and you want to own and you go to the schools and when you are a middle sized company, it's still pretty normal to rent your warehouse and invest all the money into the business, not into the building.
Dean: Right.
Justin: And so, as a result, you still -.
Dean: And hopefully you're still going to grow.
Justin: Are going five years at a time. Yeah. For sure.
Dean: Hopefully you're coming into 20000 square feet in the first time, and then hopefully by the end of the three years, you're going to need 50000 square feet, right? And from there, 100000 square feet. So, that stair stepping is the -.
Justin: They love the reports and they love the education process, and they do like being ... Making informed decisions. Yeah. Without a doubt.
Dean: And so, I think that I would also recruit into the attention pool that we're trying to get is the CFOs probably too, because the numbers and the data. That's really who the CEO's probably going to turn to next to get the lay of what we can afford or what we can ... The economic impact it would be.
Justin: They're - buddies in the process, for sure. Yeah.
Dean: Yeah, yeah. So, I think there's your thing that the CEO-CFO combo is going to be your audience there, you know?
Justin: Mm-hmm (affirmative). Yeah.
Dean: So, there's 2000 to 4000 total people that you're trying to reach there, you know? And if you just started with the CEOs, that's a ... There's a good opportunity there that you can influence them to ask for this report, you know? To give them the information that they need. And that's really a ... I would definitely mirror, and we've got lots of people who do the same side of approach for commercial real estate as well is doing that same thing. Just choosing that target audience, sending out postcard to the 2000 people. You can get the list of the CEOs. Sending out the postcard offering the May, 2020 report on Orange County lease prices.
Justin: Yeah.
Dean: And that would be a valuable list to develop of the people who are interested in that.
Justin: I would say we are 60% of the way through that market with that initiative.
Dean: Uh-huh (affirmative).
Justin: And maybe eight to 12 months into a cataloging. We use Salesforce. So, in terms of the old school approach is you walk the block and you pick up a card. You come back, you put it in Salesforce. You do all your homework to identify.
Dean: Yeah.
Justin: Yeah. And then we're then creating a identifier for them so we can build a report for all the CEOs and CFOs in that one city and mail the postcards to. And maybe we're like, yeah, eight months into every three to four week frequency -.
Dean: Building out your-
Justin: Going to these- Yeah, and refining it and adjusting -
Dean: And what are you mailing? So you're mailing to them already?
Justin: Correct.
Dean: What are you mailing now? What's your ... How's that working?
Justin: Yeah, you know what? It's interesting when you think of what are you mailing, because I have found that when I mail things that are about the process, I get less response, and when I mail specific buildings with an address and a picture and a price, that's what they want to see, or that's how they want to signal that they are one of the ones that need attention. And then, so I focus on what it is that they like. So, if I have a listing available, that's where the game isn't a pure representing companies, sometimes you represent landlords.
Dean: I got you.
Justin: Or rather sometimes companies will have you put space out for sublease. So, they don't ... They leased 100000 feet. They only need 80. So, they'll have you lease out 20 for them.
Dean: Got you.
Justin: So, all of those that I have, I will use, because that's a great marketing piece or a mailer piece.
Dean: Yeah.
Justin: And, absent that, then sometimes what do you do? Sometimes it'll be just market data.
Dean: Yeah, so I think that what you want to do is use the market data as the draw, right?
Justin: Yeah.
Dean: Like, this is where ... What you want to do is set up a system that you can be constantly identifying people who have an upcoming need, because the genesis thought of we're going to move or we're considering moving is gathering the information first, right? To get a sense of ... To put a context around things. Well, it's been five years since we got our thing. I wonder how lease prices are doing now? So, you're looking to see what's the lay of the land here. And that'll give people a great context, because that way you can ... It doesn't ... One specific property, they may see that and eliminate it because it's not enough square footage, it's in the bad ... The wrong area, or it's whatever it is, and they might not call about that one. But other companies may. So, this overall information is what they're going to be craving, you know? And if nobody's providing that, that can be your real entry into the market there, you know?
Justin: I've perceived maybe 10 or 20% of the players attempt to provide that, for sure.
Dean: Uh-huh (affirmative).
Justin: It's a small amount that do it consistently. But there are -.
Dean: Right. And they may be probably doing it ... They're probably doing it in a mailing that just gives them the information. That here's what's going on. But what i want you to do is revere the information, really put some value into it with charts and graphs and having it be ... As you're doing it ongoing, tracking the progress of the market, right? That you may be measuring proprietary metrics or some things that are ... That you've taken the time to do the analysis on that would be valuable for people. And that alone, like that offer will be a draw. You'll get more response to that than a specific property, for sure.
Justin: Your take on the market, right? Not just the data dumped raw data. Your analysis?
Dean: Right. The interpretation.
Justin: Yeah.
Dean: It's that, but it's rooted in data. It's rooted in all the information. But it's also your insight for the information, right? Because you've got the experience of what all of that means and what other trends are going on.
Justin: Yeah. I got you. I'm with you.
Dean: Yeah. Okay.
Justin: I haven't been thinking in doing it that way. I have in -.
Dean: Right.
Justin: In the monthly email that's out to everybody, the tens of thousands, not just the 2000, but I've generally had a mental short circuit of how does that live in half of a sheet of paper, right?
Dean: Yeah, on a postcard. Yeah.
Justin: Yeah.
Dean: Well, I'll show you-
Justin: What part of that is ... If that fits nicely in that?
Dean: Yeah. So, I can show you that, how that works, but essentially you've got the report is the draw. It's the cover of the report, and those words and a simple landing page where people can get it. And that's it. Now, that would be what we call profit activator two. That's the thing that gets ... Compels your prospects to raise their hands, and you turn an invisible prospect into a visible prospect, right? You've got out of these 2000 people, you don't know which ones are thinking about moving or re-negotiating or extending, but you know that there's 200 of them that are going to do that.
Justin: They're there. Yeah. For sure.
Dean: They're there. Yeah. And so, it's just now how do we identify those people before they actually start taking action? And this is the first thing, because they may be ... The first step for them is they may be paying attention to those things or they see that. They see what everybody's mailing and stuff, but no, that one's too big or that's not for us, or that's not ... You know, they're kind of ... It's starting to show up on their radar, and they're trying to piece together all these sporadic data points to get their sense of what the market is combined with looking on loop net to see what is around and get their sense of it, right? But to have the actual report would be a great thing.
Justin: Yeah. It's interesting to think of how sometimes that you feel like you keep that to yourself until it's upon request, and how you sometimes want to give it away and use it as something to compel, and sometimes I feel like I wobble sometimes back and forth between when is it relevant or when do you take which approach? And sometimes I feel -.
Dean: Yeah, I always ... I want to do both. I want to be super generous with giving people all the information, but I want to give it to the people who have indicated an interest in that. So, as soon as somebody asks for it, now they're immediately in profit activator three, which is all about educate and motivate. So, we're going to educate and motivate them when you look through it.
Now, what would be the trigger step that would be the next step for someone? If they were actually going to move forward, how does that start?
Justin: Usually it's a physical meeting and the what are your needs? The needs analysis.
Dean: Uh-huh (affirmative).
Justin: Is usually
Dean: But how do they indicate that to you? What do they say or how do they contact you?
Justin: Yeah. You do get the wide variety of emails. You'll get the phone call. It's not like a texting game.
Dean: No.
Justin: So, yeah. I would say usually, yeah, it's the email or the phone call that says that, "I saw that building on that postcard, and here's my deal, right? Here's what I'm ... The situation I'm faced with that I'm wrestling with." Or the email is, "Hey, I got your stuff. I don't need the specific ones you are ... That I saw from you, but I do think I need X, Y, and Z." So we talk about that.
Dean: Perfect. And then, what is the ... Do they then want to go and look at spaces, or do they ... Is that pretty far down the path? What's the process there?
Justin: Yeah. The bigger they are, the longer the path to seeing things in the market.
Dean: Right.
Justin: So, the bigger they are, the more they may plan the timeline or plan the budget, or rather include me or ask for my opinion on timeline and budget. The smaller they are, the timeline and budget is internal or less influential or less time in between that and looking at property. So, the 10000 foot guy may say, "Let's see it tomorrow." And the 100000 foot guy may say, "I'm about a year out from the problem, and let's”.
Dean: Yeah, I was going is that's the ... What is the timeline typically? About a year?
Justin: We prescribe a year and the reality is probably six months.
Dean: Okay. So, that's all reasonable. I mean, that's pretty great. So, if we could have a magic wand and have ... Wave our wand over those 2000 places and have the 200 people who are going to make a move in the next 12 months to raise their hand, that would be a pretty valuable thing.
Now those 200 people, then we can provide really great information to those people in terms of as long as you're keeping up with all of the things that are going on in the market, and updates on the new properties, because there's probably timely opportunities that come available too at some point.
Justin: For sure, yeah.
Dean: Yeah. Where the perfect thing would be ... Would match there. So, what I would look at then for the next step of that is to have an awareness that you can say to people, "Here's the report on the things, which will show you everything that's going on in Orange County. But whenever you're ready, here are three ways we can help you." Which would be the next steps that you could take for people, right?
Justin: Yeah.
Dean: And for some, it might be a specific report on their narrow, their specific things, you know? Whatever you might want to call that. A specific ...
Justin: We're calling it the survey, yeah.
Dean: A survey, yeah. And so, that might be a ... When you wrap it in words that is sounds like, "Oh this is something I can get like it's a vending machine. Oh yeah, I'd like that." And they push the button. And then that triggers the next step.
When we do it on the residential side, if somebody's thinking about ... Somebody responds to our lakefront house price report, then we say to them, "Whenever you're ready, here are three ways we can help you. We do a pinpoint price analysis, which will show you exactly what your house would sell for compared to the other homes that are one the market right now. We've got a room by room review booklet and checklist that we can go through your house room by room, show you exactly what to do and not to do to get the most money when you sell. More, we may be able to sell your house in as little as 24 hours without even putting it on the market through our silent market."
And so, we've got those three packaged opportunities for people, right?
Justin: Yeah.
Dean: Which address their three needs which are the different types of people, one may want to know exactly what their house is worth. They want to get the number right before they put it on the market. Another one may be most concerned about preparing the house for sale. And another may not be ready to move right now, but if you had a buyer, maybe they would speed up their timeline and they could get out if you had a buyer, but they don't want to put it on the market yet.
So, those three offers that we make are specifically addressing the head space of where they are right now, you know?
Justin: Yeah, I dig it. Yeah. I love the drilling down into the thoughts and giving them the steps and helping them so that they can resonate with one ... Which one of those -
Dean: That's it.
Justin: Steps is ... Yeah.
Dean: That's it. When people are silently begging to be led, and everybody wants somebody who can lead them. Nobody wants to take initiative, but everybody appreciates being led.
Justin: And when you say wrapping, this is these next steps can be ... As I back up a second into the market report and the landing page and identifying yourself, these three steps are a part of that or that's a further down, after you've -.
Dean: No, they're part of the ... Along with the report. Here's the report. I'm Justin. I specialize in this. I've been doing it for 15 years. We do this report every month. I'll send you the update so you can be on top of the market. I'm going to give you a one-year subscription to Orange County market watch, and we'll send that out to you every month, and then whenever you're ready, here are three ways we can help you.
Number one, bam. Number two, bam. Number three, bam.
Justin: Yeah. Okay. I got it. It's like taking your call to action and trying to refine it and time it a little better than what I'm doing.
Dean: Well, it's trying to make it sound like there's ... The example that I use is it's like a hospitality situation, and if I bring you into my house and I sit you in the living room, and I say, "Hey, Justin. I'm happy you're here. If there's anything you want to eat or drink, there's lots of stuff in the fridge. Go ahead and help yourself." It would be very unlikely that you would feel comfortable enough to go and get something from my fridge. But yet, that's what we're expecting -.
Justin: Excuse me, Dean. Hold on, I'm going to go get something from your fridge, right? Nobody's ever said that. Yeah. For sure.
Dean: Right, exactly. Yeah. And so, when you look at that, that's kind of the way that our brains work in business and in home life, you know? So, even though my intention that I would hope that you would feel comfortable enough, and I'm sincerely expressing my desire for you to feel that comfortable, what I'm also saying is, "Please, you take the initiative so that I can jump into action here for you." Right?
Justin: Yeah.
Dean: So I can serve you. But I don't want you to reject me, so I'm just going to be obsequious. I'm just going to be ... Put it in your court, right? But we're not wired that way.
Justin: Go ahead, yeah.
Dean: We're not wired that way, right? We were all brought up that if somebody says, "Would you like a cup of coffee?" The response is really, "Are you having one? And if you're having one, I'll have one. But don't boil the kettle for me." Right?
Justin: I'll have what he's having. Yeah.
Dean: Exactly that. You don't want to impose on people, right?
Justin: Yeah.
Dean: But the good news is if I said to you ... If I sit you in the living room and then I go in the kitchen and I come out with a plate of freshly baked cookies and I bring them right up to you and say, "Hey Justin, would you like a cookie?" It would be very difficult for you not to take the cookie, because I clearly went out of my way. I made the cookies for you.
Justin: You may take more cookies than you would have ordinarily taken, yeah.
Dean: Exactly. But you would never in a million years, if I said to you, "Hey is there anything I can get for you?" You would never say, "you know what? Would you bake me some cookies?"
Justin: Would you be a dear and bake me some cookies?
Dean: Yeah, but that's what we're expecting our clients to do when we say things like, "Here's the information. Please feel free to look it over, and if you have any questions or there's anything I can help you with, please don't hesitate to reach out to me. I'm more than happy to help you."
Justin: How do you feel about a form of this for the outbound prospecting? Is there something that lives in this form of an email as follow ups, or ...
Dean: Well, what do you mean by outbound prospect?
Justin: Everything we've talked about comes to identifying in our postcards, but we still have some form of outbound prospecting calls. So, cold calling or reaching out to the CEO directly, and it's not a big part of what we do, but it's still a component. And as a component, it's always something that you still think about the messaging and the psychology and what's valuable to take -.
Dean: Well, I think I would be more ... I would look more to the outbound stuff to the actual owners of the buildings, right?
Justin: Okay.
Dean: Maybe. I mean, when you're talking about the ... Do you ever, in a leasing situation, represent the person who's leasing the building or are you all on the tenant side?
Justin: I'd say 75/25. 75 tenant, 25 landlord.
Dean: Okay. And then do you often ... Are you often dealing with the landlord internally? They're not represented or that they're doing it internally? Or is it all with another realtor?
Justin: Sometimes, yeah. I'd say if we're talking about one single building, usually I'm on one side or the other. Are there instances where you're on both sides and dual agency and you're like the monkey in the middle and trying to represent both people? That is ... Can happen, but it's more of a outlier, an anomaly than a regular -.
Dean: Yeah, no. I just meant that ... I didn't mean representing both sides. I meant dealing directly with the owner versus dealing with a real estate agent?
Justin: Yeah, it's probably like two-thirds with another agent and one-third with the owner directly.
Dean: Okay, okay. Got you. So, the only ... The outbound things that I would be doing would be market making? Like when you've got a buyer, when you've got a tenant that's actively looking at properties right now and you're able to reach out to someone at Acme Warehouse and say, "Mr. Johnson, I'm representing tenants that are looking for space, and they're looking down the street at this building. Here's what they're looking for. I remember looking up your building. I'm not sure what your plans are, but I thought I'd reach out and see if you may be having some space coming available?" Or whatever may be. You're going out, doing your best to try and find space for your tenant, you know?
Justin: Yeah. I hear you in that being the market making. Not in terms of looking for ... Serving the same purpose as your postcards are serving.
Dean: Right. That's exactly right.
Justin: Okay. Got it.
Dean: Yeah.
Justin: Less phone calls, more mailers. Yeah.
Dean: My approach to this is always, "What would I do if my phone only accepted incoming calls?"
Justin: Correct. Yeah.
Dean: That's the approach that we want to take, right?
Justin: Yeah. Yeah. I love it. I spend the downtime pretending that the phone can still make outbound calls rather than ... Yeah. For sure.
Dean: I love it. Well, that was fast, Justin.
Justin: It was. I really appreciate you taking the time.
Dean: What's your ... How did all that land? What's your takeaway or your summary thoughts here?
Justin: Yeah. I loved delving into the mailers and the postcards and the lists and really thinking about the target audience, and the whole concept of making the invisible visible and allowing them to reach their hands up and identify themselves. It's amazing how that message is like people can understand it, and I have understood it at times, but to really shift as if your phone only made inbound calls and commit to it and have the courage, right?
Dean: Yeah.
Justin: And to go all in on that. I feel like I haven't made that commitment yet. Lacking the courage or I haven't made that full switch, and I would guess that in our world, I would almost venture to say nobody has, or very few have.
Dean: Right.
Justin: And if it could be done, would you rather have it be that way? And you'd be hard pressed to think that anybody would refute that or not want it to be that way. So, how can you make it ... How can you make that commitment? And that is an interesting thought process. I'd never really gone all in on and what I would think to tie all this stuff into just thinking through is that a who not how thing? Or is that ... What's that commitment look like and what's the first next action? And who can help me with that? For sure.
Dean: Yeah. That's the whole thing. Well, I'm your who for that, for sure. I can help you with that.
Justin: Awesome.
Dean: There's no ... This is my thing. But yeah. I'm excited for you because you've got such a big transaction value that it's ... You've got lots of runway there. This'll be amazing ROI. I mean, your same fundamentals, but you know, you look at it. We've got people on the residential side that do this same thing. It costs the same amount of money to send postcards to CEOs of companies that are in these warehouse buildings as it does to spend to send to the lakefront homeowners, except the average commission amount is $10000 on the residential side versus $25000 for you, and the turnover rate's higher. Turnover on the lakefront homes is 4%. So, there's 80 out of the 2000 lakefront homes in Winterhaven that turn over, and it's very profitable, you know?
So, I think you're ... You got a big, big opportunity there.
Justin: Yeah. I would imagine at another time delving into how the mindset differs or how the landscape for CEOs choosing who they work with and when is there. It has its own nuance, and thinking through that nuance with you, and how that relates back to the messaging and the landing and the three actions, and all of that. I think that's probably what's missing for the commitment to shift that to the next level.
Dean: Yeah, love it. Well, it's all very exciting.
Justin: Yeah, it is.
Dean: I'm happy we got the chance to connect.
Justin: Begin the large workout there, Dean. This is helping people make these connections and help improve things. I really appreciate what you're doing out there.
Dean: Awesome. Thanks, Justin.
Justin: Yeah, thank you. Cool. So, I will assume I will be in touch. I got to take all this in and think about it and get back to you.
Dean: Absolutely. Of course. I'll talk to you soon.
Justin: Okay, thank you, Dean.
Dean: Thanks, bye.
Justin: Take care. Bye bye.
Dean: And there we have it. Another great episode and if you'd like to continue the conversation, you can go to listingagentlifestyle.com. You can download a copy of the Listing Agent Lifestyle book. The manifesto that shares everything that we're talking about here, and you can be a guest on the show, if you'd like, to talk about how we can build a listing agent lifestyle plan for your business. Just click on the "Be a guest" link at listingagentlifestyle.com, and if you'd like to join our community of people who are applying all of the things we talk about in the listing agent lifestyle, come on over to gogoagent.com. It's where we got all the programs, all the tools, everything you need to get listings, to multiply your listings, to get referrals, convert leads, and to find buyers. And you can get a free, truly free, no credit card required trial for 30 days at gogoagent.com. So, come on over and I will see you there.