Cold calling has been a source of business, and for some real estate agents a primary source of business, for many many decades.
It started with hand dialing through a phone book, or through classified ads to For Sale By Owners (FSBOs).
Cold calling has since evolved, to include online lookups, expired listing mining services and, of course, the power dialer. However, the advancement of calling tools was not the only technology that improved and changed.
And the changes in how our society communicates, along with new technology being introduced by phone companies are combating cold calling across all industries.
This article will contain some of the reasons why cold calling will not be a viable business plan for long. Then, go into the alternatives you may want to consider.
Death of the Cold Call
• Switching to Mobile Devices
In 2004, 90% of households had a landline in the US. In 2021, that number is 40%. Less than 20 years, well over half of the landlines eliminated. More and more, America is switching completely mobile.
Now, this should not be a problem, right? Just call the mobile numbers and reach home sellers that way.
Unfortunately, it does work out that way. In fact, 80% of US adults do not pick up a call on mobile from an unknown number. 15% do not even listen to the voicemail to see who called.
Why don’t they answer? That is less clear, but there could many reasons. For example, text based communication is much more popular as it has become available on multiple platforms. Why is someone calling when they could text?
The sheer volume of “robocalls” and abandoned calls from auto dialers also tend to overwhelm and annoy people (myself included). So an unknown number screams auto dialer.
There are many more potential reasons why cell phones go unanswered, where landlines did not. But all you need to know is that the pickup rate is extremely low for unknown, and that trend will only continue.
• Advanced Analytics, Filters and Call Blocking
Major phone carriers have realized how badly that consumers do not want spam calls. And they also realized that it was getting easier to give the people what they want (and good for business).
On top of that, telephone scams have become more elaborate making unwanted calls not only annoying but potentially dangerous.
Carriers now are able to use AI powered analytics and other technological advances to block likely spam calls before the phone even rings. The FCC has also pushed for such filtering.
Some calls are sent straight to voicemail, some calls are blocked completely and others are marked with a “potential spam” tag on the phones screen as the call comes in. It will depend on the carrier which result happens.
My current carrier seems to do a combination of these. Occasionally, I will pick up the “potential spam” marked calls, just to see. Ironically, a couple of times it has been a real estate agent team asking about my home.
• The Do Not Call List
This one is not new. In 2003, the list was signed into law and the FTC is responsible for enforcement. A whopping 240+ million numbers are on the list, with more being added each year.
There are certain rules regarding keeping a do not call list, downloading the list for reference and penalties for breaking it.
The sheer number of numbers on the list limit the leads that you can get calling through neighborhoods.
• Future Changes
Companies that build tools to help real estate agents make cold calls are generally small, niche operations. Cell phone carriers, on the other hand, are massive corporations with billions of dollars to invest in R&D.
On top of that, app developers and other startups looking to solve a problem will continue to release updates and new products for spam blockers, filters and even mass text messages filters and blocking.
These technologies will continue to evolve. Your power dialer? It is a fighting a losing battle.
On top of that, changes in how we communicate could eventually push consumers away from traditional phone numbers and into 3rd party secure communication apps. Will this definitely happen?
Not for sure. But we do not know what the future holds.
• Small Piece of a Smaller Pie
Northern Association of Realtors® generational trends report (reach out if you want a copy of the current year) tracks how many sellers list a home because of an initial personal contact by an agent.
That number has been consistently around 5% for a few years, although went to 4% in 2021.
But, that number also includes email, text messages, and my favorite “etc”. How many methods are they referring to, who knows.
But a decreasing number of home sellers are choosing an agent based on a personal contact, and based on what is discussed above, the percent that belongs to the “phone” contact is getting increasingly smaller as well.
Alternative Methods to Focus On
Whether you are a new real estate agent looking for a source of clients to start your career, or an experienced agent/team leader and you are relying on cold calling now, these are viable alternatives.
• Build Your Online Presence
My business changed (slowly, then quickly) when I created a website. The same NAR Trends report mentioned above has shown the opposite trajectory for real estate websites than cold calling.
Depending on how you read the stats, nearly 7% of sellers and 15% of buyers chose an agent based on visiting a website.
That may not seem like a large number, but consistently, year after year, about 40% choose an agent based on a recommendation from a friend or family member or knew the agent directly, and 25% choose an agent they worked with previously.
So with eliminating that 65%…what is the next most common way for buyers and sellers to find their real estate agent? That is right, online.
Creating a website, building your online profiles, spending time creating online content to share, building social media profiles, these are all things that will pay off in the long run.
Despite how quickly it seems that things are changing these days, the internet is ingrained in our society for the foreseeable future, so any work you put into it should be a great investment for your time and pay off in the long run.
If you want to build your own website to have with you forever, even if you switch brokerages, check out this guide.
• Past Clients and Sphere of Influence
Ok, you already saw that every year about 65% of sellers and buyers met their agent through a referral, working with them already, or personally knew them before the transaction.
So this is where your primary focus should be. Chances are, if you do work on building this network, you could do even more.
The people you already know and trust, and more importantly trust you, are the foundation in which your real estate business should be built. If you have a team, you can also treat their sphere as your own.
Events, personal notes, cards and emails are just a start. Get creative and build your network.
• Get Face to Face
Open houses remain a popular way for buyers and sellers to find their agent. If you do not have enough people to follow up with, you should be doing open houses.
Even better would be to knock on doors around the open house to meet some of the neighbors and to invite them to a “neighbor only” portion of the open house, maybe an hour before your open starts.
Neighbors love to see the homes for sale, and some sellers choose their agent based on meeting them at a nearby open house.
Instead of having your team (or yourself) cold calling, focusing on making in person connections will yield results.
This is about quality over quantity. You may talk to less people at first, but the quality of connections can lead to just as many (or more) clients as dialing through neighborhoods or expired listings.
• Add Value
Cold calling is not only losing its effectiveness, it offers homeowners very little in terms of initial value. In fact, for most people it is downright annoying.
On the flip side, what could you do to give first, in order to earn sellers business? For me, I work hard to produce high value content for free for home buyers and sellers.
You can have everything in life you want, if you will just help other people get what they want.-Zig Ziglar, sales trainer.
Shift your mindset to what value you can add to the market, and you will be surprised what comes back.
Technology, shifts in consumer behavior and government regulation are slowly (but steadily) bringing an end to cold calling to meet home sellers and buyers.
If you are a real estate agent, the time is now to start to build a new source of leads to replace cold calling.
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