Lead generation is one of the most important things for real estate investors, probably next only to closing those very leads. If you want to take your business to the next level, you should try to penetrate all lead generation avenues and hone in on those that have the best ROI. Believe it or not, TV advertising is way up there on the list! There 400 different ways you can do lead gen. Some of them are cheap and cheerful but not effective. And then some of them are like pissing money up against the wall. Today’s guest, Darin Damme, Managing Partner at Bullseye Branding, makes the case that TV advertising is none of those two. In fact, if done right, it could be the single most effective source of leads for your business. Tune in to find out how he does it!
Watch the video here
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Look Ma, I’m on TV! With special guest Darin Damme
I am delighted that my co-pilot for this episode is Darin Damme. It’s fantastic to see you again! Give a little intro to yourself and your companies.
I operate DougHopkins.com, which is based out of Phoenix, Arizona. We purchased about 475 houses in 2022 and have grown that company substantially. I also operate Ryan Pineda’s Homerun Offer in Las Vegas along with Sean Bob, Monty, Ryan and Noel. Through the operations, we needed leads. I have a background in radio and broadcasting so I started figuring out how to money-ball TV advertising and turn that into big bucks, good leads, and lots of contracts.
In doing that, it’s spread throughout the industry. We’ve created an advertising agency that specializes as a massive lead generator for real estate investors across the country. To be able to generate the leads and track the leads, you have to call people back, and you have to know what your lead sources are. I learned Salesforce and teamed up with Stephanie Betters at Left Main. We created a new, long-term Salesforce development company called Main Dev Experts. We got it covered on all fronts.
Without giving away the secret sauce, can you give a sense of why television advertising can work well for real estate investors?
The cool thing is that the secret sauce is hard work. If you are a good real estate investor, you should be buying houses and not sitting up until midnight doing spreadsheets, comparing your leads to the commercials it played and trying to allocate which lead came from which commercial. I’m not a real estate guy. I did radio for several years here in Arizona in the United States.
In doing so, I shared an office with the salespeople. I saw exactly how they were, and you described them perfectly. The car salesman’s whole goal is to get as much money out of you as possible and tell you everything that you want to hear. 8 out of 10 times, they would take $10,000, $20,000, $30,000, to $100,000 from a client. They play the commercials. They followed through on what they said but there was no strategy to it, and the client would cancel after that campaign was done.
I knew that that was happening. When I went to work with Doug, I came in with a fresh outlook and that I wanted leads. I didn’t want commercials. We were already using an advertising agency. I asked the advertising agency, and he foolishly sent me the list of all of the commercials that had played for the year.
I took all of our leads because I was the operator, and I made sure that I knew the correct date and time that all the leads came in and what phone number they called. I also tracked the appointments, the conversions, the profit, and the income. I wound up creating a database. It went through, and I attributed the leads to specific commercials. When I put them together, I noticed there were patterns. That datasheet was probably 100,000 lines long.
You realize, “This specific TV commercial on these specific days generated leads for me.” Knowing the backend of how they sell, I knew they were going to try to sell one rate Monday through Friday, 6:00 AM to midnight. “$250, and we’re going to play it wherever we can, and we will call you in three months.”
I wasn’t going to do that because I knew that it was all based on demand. For example, the elections are wrapping up here in the United States. In that case, you have billions of dollars that are going into advertising, and it’s going to run up the price of the commercials. A commercial that may have been $100 or $200 several months ago, may be $1,500 the week or two before the election. It doesn’t make sense to buy it at that point unless that commercial is generating 5, 10 to 15 leads for you. There’s that buy box.
We get the rates 24 hours a day, 7 days a week, from every TV station, and we buy every 2 weeks instead of quarterly. Let’s say a commercial was $100 this week, and we had purchased ten previously. We got 10 leads out of those 10 commercials. My cost per lead would be $100. That is simple. If it goes up to $200 that week, technically, I’m paying $200 per lead because there is a 100% chance that I’m going to get 1 lead for that 1 commercial. If it goes to $1,500 in a week, then it is a $1,500 cost per lead, and I’m not interested.
On a weekly basis, we have an algorithm and create an app. We’re uploading everything into the cloud, and it’s computing everything. We put in the rates, we have the historical information, and it says, “Here are the commercials you want to buy with this budget.” It is the best buy for that time, not based solely on cost per lead. What we need to worry about is how much money we are taking home. You also track the quality of the leads, the appointments, and the conversions.
I will give you a quick example. What we did was track the quality of the lead. By going through and doing that, let’s say, the 5:00 PM news. Think about it logically. You get a better response on different days. What day of the week do you think would be the worst commercial to buy for the 5:00 news? Friday. What happens on Friday? Nobody goes home from work. They are all going out to a happy hour or taking their wife to dinner. Monday, Tuesday, and Wednesday would be good days to do that.
When you start running these numbers and tabulating, you go, “Why was I ever buying that commercial that I bought 45 times and never got a lead from it? Let’s not buy it again.” We use that, and I call it money-balling because that is what we do. We figure out the best ads. We figure out what our ads are that get a lead for the price, and then we buy the best commercials for the return.
I met Ryan Pineda at the 2021 TAB event. He was talking about the ways that television advertising has been effective for him in his markets. It made me think whether you’re able to work in almost any market? And do you have a sense of messaging that works per market or do you need to be careful about the messaging per market?
Your message has to get tweaked for the market or the outcome you want.
Let me go back quickly to one of the first comments that you made, and that is with Ryan Pineda. He was one of our first clients, and I remember when he was getting rolling with wholesaling. If I had to put $100,000 into one person that I know that is going to be a billionaire bigger than anybody financially, it is Ryan Pineda.
The guy is a genius. He’s a workaholic but he also has an incredible work-family balance. He is somebody that is fifteen years younger than me but I learn from him every single day. I respect the heck out of him. Everything he sets his mind to, he achieves and over-excels. I love that guy. If you aren’t following him, that is the guy to watch.
When it comes to the commercials, I understand where you’re coming from. From a marketing perspective, can it work everywhere? Yes, for real estate, it has worked everywhere because everybody has a house to sell. There is the same problem where there are people who need our services. They need to sell quickly. They need to know that their house is going to close.
I would even venture to Europe and everywhere else, even though we do the United States and Canada at this point because people have to move. I don’t look at us as house buyers; I look at us as problem solvers. There are people with problems that need help. If you take the time to become a problem solver for them, those are the investors who become successful.
From a messaging standpoint, there may be a different message between the United States and Europe. I don’t know what your Real Estate Laws are or ownership and all that other stuff, even regionally here in the United States. I live in Arizona. Most houses built here are from 1960 and newer. You live in Europe where there are houses that are 500 years old.
There is a bit of a difference there, even regionally here in the United States. In the Northeast, their houses are older. They have basements, and they are plaster. Every house in Arizona is tile stucco. We got a little bit of a termite problem but nothing that hurts the house is that bad. You get a $300 treatment. There are no tornadoes or flooding. It’s just hot.
We found that the simpler the message is that it works, and it always goes back to our OG commercial, which a lot of people have seen where it goes, “I’m Doug Hopkins, and I want to buy your house. It doesn’t matter what condition it is in. It could be a total fixer-upper or in perfect condition. There is no house I won’t buy. There are no commissions, closing costs, and repairs.” You list off, “Here is why you want to come to me.” The message has to be simple so that people can remember it. I don’t think you want to be too cute with it. I don’t see those working as much. It is the same way that we track the leads. We also track the different commercials that we run to the leads.
You A|B test. You are not only money-balling the time slots and the programming that it goes against, there is a creative variable, time variable, and audience based per show variable.
Out of curiosity, if someone is going to sign up and wants to know, “How do I get started with this,” do you have to run it for a bit if it’s a new market to find out?
I don’t want to give a false impression that you need to hire a big call center and you are going to get hundreds of calls a day. It doesn’t work like that. It starts immediately and builds up over time because people start to learn about your brand, and not everybody needs to sell their house now. Maybe they get a new job in a month or a year, maybe a parent passes away, and they inherit a house or whatever.
We have been running in Arizona since 2014. We are still closing leads that came in in 2016 and 2017. You gotta be a heck of an operator. You can run commercials and get a lease but if you don’t answer the phones, don’t call people back, don’t set appointments, and don’t have multiple ways of dispo? In the last several years, anybody could start a real estate company and make a lot of money because the prices were going up high fast. You could buy a house for retail value and three months later make $30,000 on it.
But it’s changing. Now you need to look at creative financing, Subject Tos, and novations. Eric Brewer is phenomenal at novations. I love that guy. He was one of my first clients ever and is still on. The cool thing is once people come on, we are like, “They don’t come off. They run a good org,” because they are converting. It works. The great thing about you starting new is that I got clients all around you.
I already have the data. You sign on in a city, and chances are, within 100 miles, I got 4 or 5 clients all around you. I already know what works in that region, and we get to go in. We don’t even have to start with the shotgun approach. We know in this city that this works good. This city is 100 away. What works in Phoenix works in Vegas.
The same houses are in both markets. That is why I called Ryan in early 2021. I was like, “Give me the keys to your company, and through this change, let’s work together because we got the same buyers, houses, TV commercials, and everything. If we run this together, we can take the best of both companies and turn this into a monster.” When you sign up, we already know what works. Your buy box is going to change as the results come in, and we are going to tailor it even more. You might be surprised. On the first day, you might get 5 or 6 leads.
People don’t have a television commercial, let alone an AB-tested one, in their back pocket. You have a format that works, but everybody has different people, brands, etc. Do you have the ability to pull it together, and is it a turnkey operation? Do they have to come to you with a commercial?
If they have a commercial and they like it, we could certainly use that. For the most part, most people that come to us have never been on TV before. It goes down to the website too. You got to look at your website. We’ve got to make sure that it is converting properly, the right brands are up there, and you’re using the right URL. You are not using IBuyHousesInTheUSAForLowCost.com nobody is ever going to remember. It is DougHopkins.com and HomerunOffer.com. If Jim is SellToJim.com, we make sure it is Sell 2 Jim and Sell To Jim.
It’s simplifying the entire thing and making sure that when we do get those leads – because you are paying a lot of money for them – we do everything we can to get that appointment as quickly as possible. We also open up our playbook as to how we do things and how we operate. We are sending you our email templates for follow-ups. We are going in and showing you what we do with Salesforce, whether you are on Podio, Salesforce or another CRM. That is the whole goal because if you are successful, then we are successful. You spend more money, and we all win.
If you can’t effectively work those leads, and make sure that you are doing everything you need to close those leads, then you are wasting money because you are going to be spending a lot of money on leads that you are dropping all the time.
There is never a worse phone call than somebody calling in saying, “I spent X number of dollars. I got 175 leads and 3 appointments.” You were like, “How did you do that? What do you mean?” He was like, “I couldn’t get in touch with 90% of them.” You didn’t answer the phone calls. I can even give you numbers. Here in Phoenix, for phone calls that come in that you answer live, there is a 100% chance you are going to talk to the person.
They are ready to do something right at this moment. You set the appointment, get in person right in front of them, and take a contract. We time our lead to an appointment down to the hour. We want to make it as short as possible, and they don’t answer the calls, don’t set appointments or anything, and they say, “Your leads sucked.” I’m like, “Give me those 175 leads, and I will get 10 deals out of it.”
We do about a 10% lead-to-contract rate in Phoenix on TV leads. This is where it gets into money-ball. We did this over the past couple of years. I knew that 1 out of every 10 TV leads became a deal. For each deal, when I took the total number of deals and divided it by the total amount of income, it came out to $29,000 per deal. 1 out of every 10 leads becomes a $29,000 deal.
My cost per lead over the past couple of years was because the real estate market got hot, and people in Arizona didn’t need to sell to a wholesaler. They could sell their house even if it needed repairs for full price over the course of a weekend but there were people that needed to know it was going to sell and everything. I needed to cast a wider net.
We opened up our budget from $20,000 to $80,000 a week. We spent a lot of money, and I did it without telling the owner. We went to high school together and were best friends. He didn’t want to raise the budget but I got paid based on our profit. I did it knowing 1 out of every 10 leads became a deal. We are $29,000.
When our cost per lead went $300, $500, $800, and $850 was the highest if 1 out of 10 becomes a contract, my cost per acquisition is $8,500, and my deals are $29,000 each, I’m making $20,500 for every contract that I make. Imagine going to the roulette wheel and knowing that 1 out of every 10 times, it was going to hit your number. You would take every penny you had every day as much as you could.
What happens to most people is they will go 5, 6 or 7 times. If it doesn’t hit, they will chicken out and walk away. It was going to hit her 8, 9 or 10. You have to believe in the stats but that means you have to have accurate reporting. You have to be on top of your people and make sure that they are answering the calls, setting the appointments and being on top of your acquisitions.
We went from $3.1 million in 2019 to $5.1 million in 2020 to $14 million in 2021 for a net of about $10 million. It was money-balling it. I knew my number was coming up 1 out of every 10 times. By doing that and taking the chance and knowing what was going to happen, I was able to tell my owner, “I’m not going to listen to what you have to say.” Insubordination and triple his budget. Spent his money knowing damn good and well what the return was going to be because I was in charge of all aspects of his company.
We had an incredible year. We kept it going and have been keeping it going. Really quick, and I hope I’m not taking too much of your time but in this time of change, the two things that people look at are ROI and cost per lead. It is the wrong thing to look at. You have to look at it as an outsider. “How much money am I making?” People got spoiled over the past couple of years, and they say, “If I’m not making four times ROI, do you buy houses that way?” You wouldn’t buy $100,000 for a house that you could sell for $200,000? I would do that all day long. You are doubling your money.
What you need to look at are scalability and operations but you need to look at how much money you are putting in your pocket and make the decisions that way. We went from $29,000 to $19,000 per deal year-over-year. What do most people do? They cut their budgets. Even if my cost per lead was still $800, which it isn’t, now it is back down to $400.
My cost per acquisition is $4,000, and I’m at $19,000 to $20,000. I’m still making $15,000 a deal. These knuckleheads wanted to cut their budgets because they were like, “We are getting crushed.” It was like, “No, you are not.” That is when you double your budget and go after more. That is something people need to think about because they are ensuring that they are going to get their butts kicked.
That Real Estate Tech Guy Fast Five Questions
- What is the biggest mistake people make when approaching television advertising?
They won’t spend enough because small stats equal inconsistent numbers. You’ve got to spend enough and get bigger numbers. You will see your consistency.
- What is your best advice on how someone can get started in the television advertising game?
Send an email to Darin@Bullseye-Branding.com. If you try to do it on the cheap and find somebody that does a shotgun approach, you are going to get your butt kicked. We are the best. There is no question about it.
- You are talking to someone who is trying to get into real estate investment. What are three bits of technology that you would recommend they bring in first?
I would say your CRM is the most important thing because it is your database. If you got different spreadsheets and everything else like that, you are going to get lost in the shuffle. I would say call Stephanie at Left Main and get Salesforce. The biggest advantage is that it’s already preset and half the cost if you did Salesforce yourself and you got a lot of people that can help you. You don’t have to make the same mistakes twice.
Jordan, I know you haven’t told me to say this but I mean this, I have seen phone systems all over the place. If there is a perfect phone system, it is a unicorn because everybody has different needs and wants. From what I have seen, and I have seen probably 20 or 30 different phone systems, smrtPhone is the one that I advise everybody to get on. It is simple, easy to use, and integrated with Salesforce and Podio. That is another thing.
The third thing that I would say is you need those two things. You need curious people. You don’t need order takers. You need people who ask questions about why. “Why did that happen? Why didn’t I get that appointment? Why did we get that deal? What more can we do?” Here is the biggest problem. Most real estate investors are mavericks. They are not organized. They are great salespeople, and no great salesperson is truly organized. You need an integrator, and too many people think that they can do it all themselves. You need to find somebody, and they don’t have to be in real estate, who is curious but integrates and makes things happen.
Remind everybody how they can reach you!
The easiest way is through email at Darin@Bullseye-Branding.com. I bought it without the hyphen but I haven’t integrated all of our emails together yet. I’m sitting here preaching on simplification, and I’ve got a freaking hyphen. That is probably the easiest way. If you send me an email, I can get you set up. I want to say one more thing about smrtPhone, and this is probably the biggest thing but this also goes back to real estate.
The best thing I like about smrtPhone is when I have a question. There are people that I can speak with. Your tech and support people are awesome. They get things taken care of right away. The most important thing that any real estate person investor can do and the most important person in your company is your lead manager. Those are the people that answer the phones and talk to the leads.
Ninety percent of real estate companies that is like the janitor. It is the bottom rung that you don’t invest in. That is the most foolish mistake you could possibly make because they touch every ball. They are the quarterback of your team. Use people from your region. Have people that can go, “My parents live right down the street.” You are building that relationship. You are getting that appointment. It is the reason why I love smrtPhone and other companies. It is the reason why people will love you.
If you are a real estate investor trying to purchase houses, you have people that can speak the same vibe. That is the face of your company, the most important person on your staff. Take care of those people. If you don’t, I’m going to hire them because those are the people that I need in Phoenix, Vegas, and for my clients. I can’t find the ones that we need. Take care of those people.
Darin, what a great way to end. It has been an absolute pleasure speaking with you. Everybody, thanks for reading.
About Darin Damme
Darin Damme, also popularly known before as Krazy Kid in the Phoenix radio scene for over 20 years. He got involved in real estate marketing as the COO of Doug Hopkins. Darin quickly noticed the massive lack of transparency and the prehistoric ways of media buyers. In 2016, he then focused on marketing Doug’s business to achieve its now huge success. He also worked with various investors on effectively marketing their brands.
Currently he is advertising businesses in 60+ different markets across the United States and Canada through his company Bullseye Branding and launching his new venture, MainDev, the premier Salesforce Development service tailored to real estate investors.
