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To Clarify ….

Radio and TV Ad Calls

A great question from Mike Price in response to this post:

What percentage of brokers would you guess use any sort of formalized
tracking system for analyzing lead sources? At an agent level?
When you finally created and implemented a business system, did you put into
place your own tracking system or did you use something off the shelf?

Excellent questions, Mike.  I’m glad you used the word, “guess”, because that is what I will have to do to respond.  At the broker level, I am thinking any brokerage firm with 20 or more agents – that is still in business and has the resources to stay in business – uses some sort of stat analysis.  I don’t know about the tracking part.  Keep in mind that a “lead” to a brokerage firm is seldom a buyer or seller – it is an agent.  One they can hire.  A lead for a brokerage firm is a possible hire.  Most successful brokers are not in the real estate business – they are in the get and keep agents business.

At the agent level, it is an easier question to respond to – as all successful agents keep some kind of stats.  Sometimes referred to as, “they know their numbers”.  They seldom know them all and there are some stats that most agents will go out of their way to “not-know” (like actual number of listing appointments).  But top agents will typically have a pretty good idea of how many listings they take a month, how many closings they have a month, how many leads they get a month, how much income they get per year and per month.  The better ones will have their lead sources specifically named, as well.  How many deals did I get last year from referrals?  From internet leads, from my geographic farm, etc.

Any agent not keeping those stats (which I am estimating at 93% of all Realtors) will not be able to do much business.  My answer to your lead question is 7%.  Nationally, and in most specific locations, 7% of the agents do over 80% of all of the business.  It isn’t 80- 20.  It is 93 – 7.  7% of the agents do almost all of the business and 93% of the agents do the remaining 20% of the business.  There is a bright line of demarcation between the two groups.  That line is keeping track of important stats.

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The answer to your 2nd question is easy.  I used the “count them once a month” method and then transferred the “IIII”, then crossing through with a line = 5, into a spreadsheet.  I’ve included three of those stat sheets here.  As you can see I have not yet bothered to enter January or February’s stats to the Excel spreadsheets.  Very sophisticated, I know. 🙂

Escrows Closed

Listings Taken

And from Dru Bloomfield to this one:

You should know that this post has generated side bar conversations.  The
face-to-face kind.
One of the points that came up in a couple of these conversation was that
any Gen X/Y Realtor needs to seriously consider online social network as
part of their marketing mix.  They are there anyway – it’s where they grew
up. It’s where their future client base is and will be.
Some of us who are older may be less comfortable with this kind of
relationship building, but in fact, that is what is happening.  I watched
Amy Cherow and Phil Sexton greet other like old friends yesterday.  They had
never met in person before, but they immediately jumped into a prior Twitter
conversation about skiing that went on and on.
I think that we can talk about marketing and SEO and producing, but
ultimately what these on-line tools are doing is building relationships. In
this fast-paced world, we are all looking for instant gratification or proof
that our efforts are working.
That being said, social networking isn’t for everyone, just like TV or
direct mail don’t fit for others.
My humble opinion is that agents must market in a way that’s enjoyable and
productive individually, since these actions must be repeated over and over
to achieve their personal goals.

tattoo feet

I realize this brands me as someone suffering from something other than terminal hipness but I don’t really understand someone getting a tattoo.  I understand the desire to “be unique”.  I understand how the process of getting the ink under the skin is considered art by some.  I have many friends who have “gotten inked”.  But the bottom line is, I really don’t get it.  Why, in the name of God would someone want to f–k up their body permanently for something that is guaranteed to look just awful later?

I feel exactly the same way about “social networking”.  I don’t get it.  What the hell does it have to do with business?  Or me?

Big businesses are usually based on marketing (getting the customer to reach toward you first) as opposed to prospecting (you reaching to the customer first).  Speed of getting a potential customer’s questions and concerns responded to accurately and quickly is of paramount importance.  But I don’t even take my cell phone with me when I am out of my car (unless I want to play solitaire while I eat).  I get about 150 emails a day.  As it is now, I already have all the off-beat requests, odd issues, and “important news” coming my way that I can handle.  Already, I “delegate graciousness”.  I am not trying to network.  That said, there is nothing that Drew wrote I disagree with – nothing.  Like getting a tattoo, it isn’t for me.  Doesn’t mean it can’t be art.  Or fun.

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Written By

Russell has been an Associate Broker with John Hall & Associates since 1978 and ranks in the top 1% of all agents in the U.S. Most recently The Wall Street Journal recognized the Top 200 Agents in America, awarding Russell # 25 for number of units sold. Russell has been featured in many books such as, "The Billion Dollar Agent" by Steve Kantor and "The Millionaire Real Estate Agent" by Gary Keller and has often been a featured speaker for national conventions and routinely speaks at various state and local association conventions. Visit him also at and



  1. Jay Thompson

    March 15, 2009 at 1:16 am

    So, what happened in 2005 with the Radio/TV ad calls? That’s a pretty significant difference from the other years.

    The obvious answer would be you spent significantly less on radio/TV that year. Just an assumption on my part as the spend data isn’t here (but I bet you have it!)

  2. Russell Shaw

    March 15, 2009 at 1:45 am

    We had been running the business on auto-pilot. I believe we actually spent slightly *more* on radio and TV in 2005 than we did in 2004. That wasn’t the problem. My ad – at the time – said, “I can sell your home in 27 days”. I had been running it for a couple of years. My actual time then was 15 days DOM and as I didn’t see how I was “guilty of false advertising” it seemed okay to keep running it for a while.

    We were very late to the party as far as what was actually happening in the market. The average agent was selling houses in 10 – 12 days and prices were spiraling, all the while I was living in the world that had gone by.

    Contributing to our lower ad calls (while paying even more than we had in 2004 due to rates being set ON the results of 2004, an election year) was the fact that as the market heated up the “value” of an agent was dropping. I wasn’t matching the market on commissions. We wound up making more money that year – while selling fewer homes – because the prices had gone up so much. That was the year that discount real estate companies reigned supreme.

  3. Brad Nic

    March 15, 2009 at 6:44 am


    Thought provoking – as always. In response to your statement/questions,
    “I feel exactly the same way about “social networking”. I don’t get it. What the hell does it have to do with business? Or me?”

    I presume you are a master at social networking. You must constantly meet new people through clubs, associations, meetings, hobbies, sports, etc… You certainly understand the value of these contacts and relationships to your business (and probably also get some personal reward as well). I know you know the value of ‘social networking’.

    You must be referring to new media tools that are being used for social networking. While these tools (Twitter, FB, LinkedIn, etc..) are different from radio and tv – they have a hell of a lot in common with your cell phone and email. Just tools for communication – communication tools have always had value in business (and personal).

  4. Barry Cunningham

    March 15, 2009 at 8:07 am

    Based upon your numbers from your spreadsheets, for 2008, are you saying:

    1. 1 out of 4 (25%) of the people who call from a radio or tv ad turned into listings

    2. 1 out of 6 (16.6%) of the people who call from a radio or tv ad turned into closed sales

    The number that would really tell us something, at least those of us who know marketing, was what the annual spend was on radio and tv to generate 1,718 calls.

    As Phoenix is the #15 radio market in the Country, it is probably quite comparable in cost to our market (Fort Lauderdale) which is the #12 market in the Country.

    So in determining the viability of your marketing versus the implementation and utilization of Social Media and Online lead generation, I would think an analysis of your CAC would be vital to the overall view of these numbers.

    As you say above, any successful agent, of which you most certainly are in that category, will “know their numbers”, this would be of great interest to those of us seeking to emulate the production of Russell Shaw.

    One of the reasons this is important is becasue one would have to take a hard look at ROI. I think too much emphasis is placed upon units moved instead of ROI.

    I mean if you spend $900,000 or $75,000 per month on advertising and it say only yields $2,000,000 in gross commissions then one’s ROI is not much different than the guy who spends $90,000 and grosses $200,000.

    But where it really gets interesting is when you see the online savvy agent or real estate entrepreneur who spends about $10,000 per year but grosses the same $200,000 with little if no overhead, no staff, no office, no employees..etc

    So a detailed look at the CAC would be of great benefit to us all to really quantify the numbers shown above.

    Thanks in advance foe giving us more detail on your CAC and annual spend.

  5. Jim Gatos

    March 15, 2009 at 9:08 am

    Thank you. Everyone should REALLY look at their business and spend their time proportionally on what works and what doesn’t.

  6. Matthew Hardy

    March 15, 2009 at 5:41 pm

    > I mean if you spend $900,000 or $75,000 per month on advertising and it say only yields $2,000,000 in gross commissions then one’s ROI is not much different than the guy who spends $90,000 and grosses $200,000.

    Not much different? I think there’s a difference between $110k and $1.1mil. 😉

    Also, I’d like to hear thoughts on the scaling qualities of spending $90k on advertising versus $900k.

  7. Barry Cunningham

    March 15, 2009 at 6:11 pm

    Matthew I said “ROI”…I think you missed that.

    If you are spending $900,000 to make or rather gross $2M you can see that you are realizing an estimated ROI of $2.22 for every dollar of advertising spent.

    While in the second example you are realizing the EXACT same ROI.

    However in the 3rd instance, you would be realizing an OUTSTANDING $20.00 per dollar of investment which underscores the viability and economic reality of the implementation and utilization of a well thought out and comprehensive social media marketing plan.

    I am not going to go into a dissertation instructing one how to calculate their relative ROI.

    If one is in business they most assuredly should be doing that on their own accord.

    I think Russell said that above. A successful agent would know their ROI.

    As for your scaling question…it is again a matter of ROI as it would HAVE to be.

    It’s not a matter of simply increasing ad dollars. It’s all about what those ad dollars would bring the advertiser.

    In the above example, while somewhat illustrative, you can see that if one was consistent (had proper saturation and reach with the right frequency) in their message and their market had the volume then to reach that same $2,000,000 in gross commissions one would only have to spend $100,000 and in that instance they would still have an ROI of $20 for every dollar spent.

    It’s really easy to see mathematically that a targeted, well planned social media campaign is WAY more profitable and provides for a substantially higher ROI.

    Obviously this metric is not used as much in real estate (for whatever reason) but in MOST businesses the metric is so important that more than 80-90% of companies typically do an ROI calculation prior to approving advertising. (source Forbes)

    This might be something that someone may want to include in the SMMI stuff.

    So Matthew, I hope I have answered your question thoroughly.

    It will probably be more clear and eye-opening once Russell has a moment to rspond with information regarding his CAC and annual ad spend to generate those 1,700 calls.

  8. Missy Caulk

    March 16, 2009 at 7:05 am

    Thanks for sharing your charts. I got some helpful ideas on tracking that I had not thought of.

    Social media is just one form of marketing, it is for some and not others. Just like open houses have no value here, unless you are in downtown A2. (some will not agree, that’s ok)

    It’s interesting your comment on big business,

    “Big businesses are usually based on marketing (getting the customer to reach toward you first) as opposed to prospecting (you reaching to the customer first). Speed of getting a potential customer’s questions and concerns responded to accurately and quickly is of paramount importance.”

    ….hence Twitter…more big businesses are on there than you can shake a stick at.

    @comcastcares was very helpful to me one night that would have taken hours to fix with their support.

  9. John Kalinowski

    March 17, 2009 at 8:19 am

    Barry- The ROI discussion is interesting, but when it comes to “Benjamins In Pockets”, or BIP analysis, not many come close to Russell in residential real estate.

    It will be interesting to see in the next 2-3 years if anyone can match Russell’s BIP production through social media marketing alone.

  10. Barry Cunningham

    March 17, 2009 at 9:10 am

    Hey John,

    I’m a bit confused. Without specifically knowing Russell’s CAC or annual spend on advertising, and of course not being privy to his overally cost of business…how can you even know what Russell’s “BIP” actually is?

    Hey, it’s possible to do HUGE production and have a different BIP…”Butkiss In Pocket”.

    I know quite a few people in real estate right now who have HUGE production and can barely keep the doors open.

    I know some who have mediocre units moved but are making 6 figures a month NET each and every month.

    One guy I know NETS over $220,000 per month and only works part time and even then only 10 hours or so per week and his sole means of doing business is VIA the use of social media.

    Like I said in either this post or on one of the others here…if you have not mastered it, if you have not developed a system that allows you to put your business on autopilot…then as you state above, you are relegated to “watching the action” while others make the profits.

    We took over our market while many agents were “watching to see if it worked”.

    Might be a huge problem in real estate. Too many agents seem to be afraid of being early adapters and the fear basically puts them at a HUGE disadvantage.

    Other than utilizing severe black hat strategies , no one will be able to overtake us in our market.

    We are entrenched so solidly that our presence online literally costs us pennies while consistently filling our pockets with the Benjamins you speak of.

    What we have learned in SM and IM has allowed us to diversify in ways that would be beyond the scope of most agents comprehension.

    I think those that take the SMMI course that Lani and crew are developing will find themselves in a much different position that their competitors.

    We are 100% permission based. I think you will find that THIS is the way to conduct business in a Web 2.0 world and beyond. Don’t believe me, I am just a learner myself. Research it and you MUST come to the same conclusion.

    Russell wrote..”Big businesses are usually based on marketing (getting the customer to reach toward you first) as opposed to prospecting (you reaching to the customer first).”

    Which customer do you think is more valuable? One who ASKS you to market to them or one you must try to convince to do business with you?

    Which customer has a lower CAC, which then increases your Net? Which customer is more apt to buy?

  11. John Kalinowski

    March 17, 2009 at 12:50 pm

    Barry- Maybe I’m wrong, but why do all your posts sound like advertisements for the systems you sell to agents on your site? 🙂 It reminds me of the guys who sell stock market trading systems. If those systems are so great, why are they wasting time selling them to others? Wouldn’t they just spend all their time working their own system?

    I don’t think Russell has anything to prove or defend. His success speaks for itself. He’s also helped me, a complete stranger, countless times with nothing to gain or sell which speaks to his character.

  12. Barry Cunningham

    March 17, 2009 at 1:16 pm

    John..I’m sorry..did I so much mention anything we sell? I think what I did speak of was Lani’s course.

    I believe what i said was ” think those that take the SMMI course that Lani and crew are developing will find themselves in a much different position that their competitors.”

    I think they will tell you that I am not involved in any way in what they are offering nor profiting in it in any way.

    So I am not sure of what you are referring to.

    As for my site offering courses, I have NOTHING to be ashamed of. Yes, we make considerable profit in both showing people how to make money and in utilizing the efforts ourselves and have been doing so for years.

    Am I supposed to feel bad becasue I capitalize on ALL opportunities before me? That’s awful small minded. I buy and sell real estate, I produce and offer courses, I sell ads on our site, I have great Google adsense revenue, I have 4 active storefronts selling everything from Train Horns to Colon cleanse products to Nascar Race Scanners and somehow I am supposed to feel bad for doing so…yeah..ok.

    Dude, we are using social media in so many different ways it would make your head spin. All of these revenue streams and still working less than 10-20 hours per week. When you ask the question above…” Wouldn’t they just spend all their time working their own system?” underscores your lack of experience in social media and in a Web 2.0 world. You see someone wired in knows how to design systems that works ON ITS OWN!

    I have seen your posts, and I have seen your bloodhound musings about your signs and such and I read what you have wrote herein and I am wondering why are you worrying so much about what Russell makes and why more agents aren’t trying to do the same.

    I LOVE the fact that Russell is successful. I applaud ANYONE, ANYWHERE, making money. Russell and I may butt heads occassionally but I would be the first to salute his capitalistic manner and I appreciate him for it.

    I just love commenting here becasue while some may comment, many more will read (my emails tell me so( and accordingly there are literally tons of people out there who want to learn to make money and are not restricted by dogmatic real estate ideologies or mundane conventional wisdom.

    I don’t apologize for my capitalistic endeavors any more than I ask Russell to apologize for his.

    My ROI conversation may be over the head of some…but I know those who are in business (like Russell) know exactly that of which I speak.

    Why do I know this? because those of us in business to make money understand the precepts of doing so.

  13. Dru Bloomfield

    March 18, 2009 at 6:15 am

    As I told Russell privately, he shares in such a way that makes me think about my business, and I really appreciate that. Based on how giving Russell is of the details of how he runs his business, and what works for him, I’d say that he is a master teacher. He wants us to be successful.

    Brad Nic nailed it. Russell is a master of social networking. I have the good fortune to work out of the same brokerage as Russell. Everyone in this town knows who he is. I get business because of Russell’s dominating presence. If you only knew the number of times I’ve been asked, “Do you work for Russell Shaw? It’s quite amazing.

    I’m an early adopter. Always have been. I have no idea where the on-line social media train is going. I just know I want to be on.

  14. John Kalinowski

    March 18, 2009 at 6:35 pm

    Barry- It’s funny that you sell colon cleansing products, as it sounds like you could use a dose yourself. 🙂

    The reason Russell is so highly respected (especially by me), is that he never uses his success to denigrate others, or criticize them for not doing things his way. You also won’t see a Russell post filled with braggadocious claims, and arrogant bullying designed to make others feel like losers because they don’t follow his system.

  15. Barry Cunningham

    March 18, 2009 at 7:12 pm

    Hey comments are moderated, but somehow vile like yours was any event if the truth hurts, wear it proudly.

    No one was bullying you. And if I come across arrogantly then so be it…

    Standing behind my stats is somehow different than standing behind his..whatever.

    Maybe…just maybe…if you look past the anger and do a wee bit of introspection you might…like others…see the value in my statements.

    If you did, you might be better off financially, and have better than a PR0 blog with basically no visitors.

    Despite what you say…you have to admit…there are a lot of people who subscribe to what I say and frequent our blog so we must be doing something right…that much is undeniable.

    I know people despise what we write…but fortunately so MANY more love it and find value ..LOTS of value in it and it’s that silent but large audience that we cater to. Obviously YOU aren’t in that demo.

  16. Barry Cunningham

    March 18, 2009 at 7:22 pm

    Hey John..I winner I know can EVER be made to feel like a loser. Only one who feels that they may fit the bill can be MADE to feel anything. It’s just not possible to make a winner feel anything like a loser…it’s just not possible.

    So if you’re feeling that way…don’t blame me.

    Also, I NEVER said for anyone to follow MY way of doing things. If you re-read above I have and was engaging in a discussion with Russell regarding ROI and CAC and overall marketing related things. I did not create Web 2.0 and I definitely did not create Social Media. I have become a sponge. I read and absorb everything and I test and I test..and I test some more..

    My learned experience allows me to succeed in the manner that I do. That and a continued willingness to continually adapt and try new things.

    I launch a new website every 2 or 3 days…we are constantly fiddling with ways to drive traffic and revenue. Some work and some don’t.

    We constantly network with people around the world learning all we can about how to better our business and how by learning we can increase our revenue.

    That can’t possibly be wrong.

    I am not here to win your favor or adulation. If I was I would be foolishly wasting my time. I am sure that some know why I comment here and elsewhere. They know becasue they understand the purpose and the method behind what you and others decry as madness.

    If it was YOUR applause I was seeking then more than likely I would be writing MUCH differently. But you’re not, nor will you ever be the type of person I seek to engage.

    That doesn’t mean there aren’t others..a lot of others who do find value in engaging, spirited and pointed discourse.

  17. Bob

    March 19, 2009 at 11:00 am

    We took over our market while many agents were “watching to see if it worked”.

    You are an investor. You cant make any fair comparisons to taking over a market versus an agent, since you are not one.

  18. Barry Cunningham

    March 19, 2009 at 11:24 am

    Bob…can we PLEASE..seriously PLEASE lay that tired argument to rest. I think I have clarified MANY times that our business is BASED around the production of agents that we utilize.

    I don’t understand why you keep getting hung up on that. Are you inferring if I decided to waste a week of my live and pay a hundred bucks to get a piece of paper that anything would change???

    C’mon…NOTHING would change except for the fact that I wouldn’t have to continue to answer or respond to this tired argument.

    That and oh yeah…I’d be taking a HUMONGOUS, GARGANTUAN pay cut.

  19. Jay Thompson

    March 19, 2009 at 11:55 am

    Barry –

    If getting your real estate license would result in you “taking a HUMONGOUS, GARGANTUAN pay cut” then you’re saying a licensed agent can’t do what you do.

    Aren’t you?

  20. Bob

    March 19, 2009 at 12:46 pm

    Barry, that paper carries liability. In California it goes into an aspect of law that refers to the concept of “superior knowledge”.

    It’s not that I am hung up on the issue. It is either that you argue facts incorrectly, but deliberately, or you just talk without having a clue.

    Regardless, sorry Russ for hijacking the thread. I’ll keep any further comments on the topic of systems and tracking stats.

  21. Barry Cunningham

    March 19, 2009 at 1:04 pm

    @Jay…not sure what you’re asking. If I had to worry about generating 2,3 or 5% of a deal based upon what OTHERS would do as a way of making a living, then I would INDEED take a huge pay cut.

    I’m not saying at all that agents can’t do what we do. Far from it. The reality is that most agents choose NOT to do what I do.

    For instance, I know and deal with quite a few agents who CHOOSE to do what I do. They do so becasue they recognize a good deal when they see it and can profit accordingly.

    This thread began with a discussion about CAC and ROI based upon Russell’s stated production numbers.

    I jumped in becasue I know that the revenue can be matched and exceeded via means of Social Media if utilized and implemented in a manner that allowed one to maximimize the GP (gross potential)

    You are unreal in your use of Social Media…you are someone I actually follow to see how you are implementing things.

    We use it as well which is what I have been saying. Just differently. And it works.

    Why don’t more agents do what we do? I don’t’d have to ask them. However, I don’t think that one couldn’t…unless of course they had no investment capital, have no way to analyze the profitability of a deal…I don’t know. You tell me.

    @Bob, I don’t know what your angle is. I told you before, Florida has a Transactional broker status and there is no liability. Trust me, I know more about real estate law than most brokers…and I think you pointed out once that my wife is an agent…so what’s your point?

    I am telling you with 100% certainty, that if I chose to get a real estate license, that aside from taking a pay business would not change one iota. Since you have no idea how we operate, I find it hard for you to form an opinion as to how my business would change.

    There’s no great wall dividing what I do on a deal and what any agent would do on a deal..except I get paid more..much more.

    I don’t have a problem disclosing to a buyer or seller what I am going to make on a deal. I have no problem working under Respa guidelines. I have no problem making sure everything is on the HUD.

    My lenders write loans by the book. My sellers get paid and my buyers get what they paid for. My advertising and marketing is completely above board.

    What are you talking about? I did not fall off of a turnip truck yesterday. I have been involved in real estate for quite some time and have pretty much seen it all.

    If it makes you sleep better at night thinking you are in a better position and that you think that not having a license makes one clueless…then so be it.

    I surely don’t care. Not going to fight you and not going to debate you. We don’t practice real estate without a license and never have…but we have had a great business in the business and will continue to do so.

  22. Barry Cunningham

    March 19, 2009 at 6:17 pm

    Oops..last sentence should have read…
    We don’t practice real estate without a license and never have…but we have had a great ride thus far in the business and will continue to do so.

    Excuse my big fingers…anyway…have to get ready to watch Hell’s Kitchen with Gordon Ramsay which is WAY more fun than this..Ciao!

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