KGCI: Real Estate on Air - Agents You Need to Know this Number

Episode Date: July 3, 2025

Have you ever wondered how to make money-related decisions in your business? Like, should you be spending more on marketing and getting more clients? Or do you need to be cutting expenses? What areas do you need to be either bulking up and putting more money into or cutting? So if you've ever thought about any of these things, if I'm speaking to you right now, this is the show for you because Allie is here to share with us the scoop on those things we talked about today, specifically on the lifetime value of a customer and the cost to acquire said customer. Y'all, in case you don't know, Allie, here's the scoop on her. She is an Air Force

veteran turned real estate entrepreneur. She's an EXP Capper, EXP Icon agent, an investor, an unfiltered total fucking badass. And of course, 50% of the hosts of the Age of Goldman podcast. I'm the other 50% I am, Shelby. Y'all, this is the agent. Goldmine. We are the show to help agents go from $100,000 to $200,000 a year. We are here. If you're ready to build sustainable systems into a business that you actually love and don't want to escape from, welcome. Join us. Hello. And without further ado, let's fucking do this. Welcome to the agent goldmine, the only podcast in the world, specifically for real estate agents who are stuck at five transactions a year to help them get to 20 plus. Your host, Ali Garcaid,

and Shelby Johnson, two EXP icon agents, each do over 40 transactions a year and interview others who are crushing it. In this podcast, you'll receive the knowledge to help you scale your business using systems and processes with our interviews and monologues twice a week. If you want to be a part of our community, reach out. Welcome to the show. So this is something that I was working on just a couple of days ago, I, because I'm actually just now going through all of the like Alex Hermose books, all too, but like actually diving deep into it, especially since now we're like toward the end of the year. I wanted to make sure that my business is where it should be and how I can improve it, right? Because I fucking, you know, love, you know me. I love tracking. I love tracking.

And so I had been tracking things slightly differently, but this is the one formula that no shit gives you the health aspect of your business. You know, like, how healthy is your business? How profitable is your business? And because it's fresh on my mind, I wanted to share it with everyone. It doesn't matter if you're listening to this at the end of the year, the middle of the year, the beginning of the year, do it. So like, it doesn't matter. It just happens to be that I'm doing this at the end of the year. So I have like my running 12 months, but either way, I would still do my running 12 months. The formula is what Alex Hermose talks about all the time, is a lifetime gross profit of a client or of a customer to the KAC or cost of acquisition of a client.

The first side of that equation, the lifetime gross profit, is how valuable is each client, how much gross profit are you making from each client? And then the second half is, you know, how much are you spending in advertising and money and ads and open houses, you know, X, Y, Z to even get a client to begin with? obviously the left side, the lifetime gross profit, should be higher and significantly higher than the cost to acquire a client. Otherwise, you are paying money to be a real estate agent. And it's like kind of, it's like we're like saying this flippantly and like joking about it, but like a lot of agents don't do this. And a lot of agents are going under. And there's a reason

87% of real estate agents fail. So this I think is like out of everything that I have been tracking, I think this is probably one of the most important. So I'm going to just, this is like a workshop. Like if you are driving right now when you're on, you know, in your car, think about this, but then like also download this episode or do whatever you need to do, like rewind after you listen to this. That's what I do. Like I always start an episode and then I rewind to the beginning. So that way I know as I'm like scrolling through my Spotify, that is something that I want to finish with a computer. So this is something that you're definitely going to want to do with a computer. I am giving this to you an eight steps.

I broke this down like as easy, peasy as possible, knowing that this. simple LTGP to CAC formula is can be very overwhelming as we get in the weeds. But we're going to do this together. Okay. And if you have any questions, reach out to either one of us, Allie the agent, the Shelby Show on Instagram. Also reach out to us because we are, I'm very curious as to what your number is. So no matter what your number is, everybody's numbers are going to be different.

There like is no shame about whatever your number is. We are all improving. We're all improving together. So find us on Instagram. Allie the agent, the Shelby show. Hit us up with your number. and we can see if we can help you. Okay, so first part of the equation is finding the lifetime gross profit of each client.

So how do you find this? Step number one is to download all of your transactions. This is probably easier said than done if you're with like a cloud-based brokerage where you can easily just like log into the portal and literally just download. You can download all of your transactions ever if you've been with that company or for the last 12 months. depending on how long you have been a real estate agent, you may want to change how many years of data you are downloading. And if you have changed brokerages, I hope, I hope, I hope that you have a running list of all of your transactions. So something of what I do is like every

month, actually twice a month, I actually go into the portal of what we have. I download my newest closings, the transaction. and I copy and paste them over to a different Google Excel. That's my Google Excel. And it's called the running total or like running transaction total. That's what has all of my transactions since like 2022 since I've been an agent. So whatever way that you have, that's easiest for you to just download all the numbers in order for you to get how many clients and how much money you have made, do that.

whether that's going back through several different portals or, you know, that's, however you get it, get that information. And the specific information we're going to need from that are the clients, hopefully names, because it's going to make a difference later on in the future steps if you are using, if you have the same repeat clients, that makes a difference. And then the actual profit. So once you have downloaded that, step two is adding up your net income. So again, we're looking at the gross profit. We're not looking at, at at at least I'm not

doing this with GCI numbers. I'm doing this. So I have added up all of my, and when we download our transactions, we have a GCI, but then we also have a net commission column. So I just use the net commission. But then step three is I'm subtracting my TC fees because they're not always included in that. And that is how I find my true net. How much is my take home? Of course, this was before taxes, but it's after any brokerage fees, any splits, and the TC fees. So after I subtracted that, as well as the potential of if it was a listing, you know, the cost of photography, I think I I just answered, she'll be special. Literally, I had my hand raised and she fucking answered it. Good job, Allie.

and the cost of client gifts, which client gifts, you can take it out of your, out of this side of the equation, or you can, if you consider that a marketing expense to get a client, you could take that out of the, the cac and the second half of the equation. I don't want to overwhelm you. The whole part, the whole part is, whatever it is, be consistent. And if you're taking the last 12 months and 12 months only, then for the second half of the equation only do 12 months. Just be consistent. Again, this part, you can go so far deep in the weeds. This is what I was doing. I'm like, oh my God, but I didn't give this client the same type of gift that I gave the other one. This one was less. This was more. And it was so fucking much. Like,

at the end of the day, if this is overwhelming you, be conservative and tell yourself that you took home even less. So that's how being conservative would be on this half of the portion of the equation. So don't get overwhelmed. So that was step. Step three. Step three was subtracting any client gifts if you want to add it off of this column, TC fees and photography fees or if you really even want to take another step is maybe subtracting gas or anything like that. Step four, now that we have the actual net income total. Like what I did was total. I haven't been an agent for that long. It's been like a little over three years. So I have my running total for the last three years. Then,

step four is finding the number of clients that you've ever had for that period of time. If you're only doing for the last 12 months, then only tally the number of clients that you had for the last 12 months. What I did again was a running total. So I had all of my net income. And then I found the total number of clients that I've ever had. The kicker here is you want to make, this is where the names come into play because you want to make sure that you're not counting repeat clients. Say you've had a hundred transactions. And I am going to have, I'm going to start the example right after step five, but say you've had 100 transactions, but say you work with investors. And out of those hundred, say five of them were actually repeat clients. Or to make this

example even easier, say one of your clients was an investor and they purchased five times. You wouldn't be, the number of clients wouldn't be 100. It would be 95. It would be. because that one client purchased five times. So it's not the number of transactions. It's the number of clients. Again, because what we're solving for here is how valuable is each client, not each transaction. So that was step number four, finding the number of clients that you've had. And now, step five, you divide the net income that we found in step three, divided by the total number of clients you've ever had. You take those numbers. So let's start with this with this example here.

Say you've been licensed for, I don't know, two, three, four years, whatever, it doesn't matter. Say you've made in your last four years, say you've made $500,000 net. That was your, you know, gross profit since day one of being licensed. And say you have worked 100 clients. So clients, right? Like not transactions clients. So $500,000 divided by $100,000.

clients would give you a lifetime gross profit of $5,000 per client. That is how valuable a client is to you. So that is the first half of the equation. So if $5,000 per client is how much you make on average profit, now we find how much does it cost us to even find a client. If we're going to make 5K, hopefully it doesn't take us 5K or more to find that client. So let's solve for KAC or the cost to acquire a client. That was the first half of the equation. Shelby, do you have any questions, tips, add-ons? I paid off one of my mortgages in just four months, thanks to the shred method. I personally used the shred method to manage my money and crush my mortgage faster than I ever thought possible. The system was simple. The customer service is top-notch, and the results

speak for themselves. $121,000 of a mortgage balance gone in just four months. I put my money where my mouth is and it worked. If I can do it, so can you. This can not only help you, but your business as well. Help your clients not only buy homes, but also pay their mortgage off faster and build equity sooner. When you add this kind of value to their lives, you're not just their agent. You're their go-to advisor for life. The shred method sets you apart and keeps your clients coming back. So go to the shred method.com to learn more about how you can shred your mortgage and help your clients do the same. I would just say, you know, from my perspective, of course, I'm like listening from my perspective. And depending on where you are in your journey, don't feel like you have to go back to the beginning

if it doesn't make sense with how you're doing your business now. Because like for me, I was like, okay, like I can go back. I have, you know, all the numbers from 2018 until my business now. But since I took such a gap and I'm in a different market and there's different price points and there's different marketing. There's like a whole bunch of different things. Just make sure that you are not following the rules just to follow the rules, but also taking a step back and think about it logically and where you are in your journey, which Ali did say, I'm just emphasizing. That is all. Yeah, super, super good point because people move. People, yeah, the price points make a

hell of a difference. Cool. Okay. So then we have solved for the lifetime gross profit of a client. So now we're going to be solving how much have you spent in marketing and advertising and any other expenses that it takes you to even get a client. So the most important part here is making sure that whatever timeline you're using, say it's just the last six months, say it's 15 months, say it's since you've moved to Lexington, Kentucky. Just make sure it's the same timeline. Otherwise, it's going to fuck up your numbers. You don't want to do that. Okay. So in this scenario, though, we're just doing making it easy peasy. We're just doing lifetime. Say you've never moved. Say your price points all the same, et cetera. Step six is find the most conservative way. Well, I think

the most conservative way to find how much it has taken you to acquire client. I think it would probably just be logging into your business bank account and seeing all of your expenses, like adding it up for the last 12 years, for the last since you've had it. Again, whatever that timeline is, that's like probably the most conservative way. And that's because not all of that money likely is going to just advertising and just marketing. It's likely going to, you know, during transaction expenses, taxes, owner compensation, if you're following the profit first model, and other random stuff. So that is probably the most conservative way. Another way would be to go into your credit card account. So like American Express or Chase, whatever you have. And logging in,

these bigger banks do tend to have better, like, graphs and transactions, breakdowns of the categorization of, you know, how much was spent in marketing and advertising and, you know, gifts or gas stations, whatever, whatever. So take that breakdown for the last however period of time you're doing this. Again, in this example, forever, since you've had that bank account or since you've had that credit card, add it all up year over year and make sure that you're looking at the cost of the photography, the client gifts, the ads that you're running, you know, YouTube ads or Facebook ads or whatever ads if you're running ads, the cost of open. houses because that is literal costs that you are using to find clients. That's why you do open houses.

So likely you don't want to be adding into this the cost of your LLC, the cost of like taxes or bookkeeper. That's not really the cost of acquiring a client. That's a cost of just doing business. So you want to make sure, again, this is another step. Step six is where you can get lost in the sauce. If you want to be super, you know, conservative, take the check-in account amount. If you want to be a little bit less conservative, you can just go into the credit card statements. Usually they have a really good annual statement or year-to-date statement and you can like, what's the word? Extrapolate from that and go, you know, anyway, whatever. No, thank you.

And then, or if you have a bookkeeper, ask them. ask them. Real quick to add on to what Ali said, there's quite a few implied tasks that she's like not specifically stating. And some of them, you know, are you guys are right along with her following along. And other of you are like, wait, she's kind of talking to my head. So like implied tasks too would be that you have a business bank account. If you don't have one, that is something that you should strongly consider definitely set up. And then also she's talking about like being able to look at your categorization of, you know, your finances. And that's another implied task. Like if you don't, if you're not looking back at your, um, your spending, essentially,

if you don't have tabs on your money management, this is something that we both recommend that you get a jump on sooner versus later and a shameless fucking plug. We recently had them on, I think. I don't know if the shows come out yet, but Mike Glasby is a part of Five Pillars Nation. And he is, um, really fucking smart and really good. money management and financials in general. And he started a, like this is a while ago now, but like a bookkeeping service for real estate professionals in general. So if you do not know where to start and you're like, how do I fucking trust someone? Ellie and I both trust him very much and have known him for years. So we give him a strong, like our strongest fucking endorsement. So if you

want that contact information as well, hit up either of us. We're happy to share. Yeah. Or find him on Instagram directly. Yeah. Totally. Is it Michael Glaspby? Is it just his name? Yeah. He just got a new one. He's like starting. But yeah, if you even search, it's Michael Glaspby.

Yeah. That should give you enough. Yeah. Yeah. Yeah. And also like with that, be wary of some bookkeepers, man. Like I, when I was interviewing around for bookkeepers, that's, I've been so fucked over and over again with, which a lot of it is my own fault because I'm like, oh, I'm trusting you to be a

professional and I'm not microman. managing or at least, you know, eyes on as much as I should. So I do definitely take ownership for that. But time and time again, I, I've trusted when I shouldn't have. It's really painful. Yeah. Something that I have also learned from Alex Ramosey recently is the fact that he would, he wouldn't just interview like three. Typically what I do is like interviewed three. I'm like, all right, cool. And he's like, no, he interviews 30 people. And he expects to learn during each phone call. So it's just like the the first 10 or kind of just like him learning about a topic that he doesn't know. And as he continues to interview the other 20, if he doesn't continue learning,

or now that he like knows a lingo, if they don't know how to properly answer questions and they're just like immediately out. So that was, that was pretty smart. But yeah, okay. So hopefully you have your bookkeeping in place. Otherwise, and if you are commingling no bueno, change that shit like now. Okay. So in this example, say someone has, say the example that we're doing is someone that's been in the business for three years. Say that they have spent, say that they have kind of like been increasing in spending

every year. Year three was $30,000. Year two was $20,000. This is, again, just in like acquiring a client. and the first year was 15K, that makes it a total of $65,000 in acquiring a client. We're not done. That was step six. Step seven is now that we have the total number.

If you're looking to change brokerages this year so you can increase your business and you want to join us at EXP Realty and would like either myself, Aligar said, or Shelby Johnson to personally sponsor you in, set what you have access to two icon agents, text the word join to either my number 914-318-49-18-48-18 or Shelby's number, 859-267-3849. If I sponsor you and you have access to the both of us and everything that's Five Pillars Nation, we have the checklist, the systems, the process is to help you scale your business, and don't take our word for it. We've had agents switch brokerages to join us that were stuck making $300,000 GCI, and they join us so they can scale. So text that we're joined to those numbers and we'll take the next steps. We're not done. That was step six. Step seven is now that we have the total number of how much it has cost us to find a client, then we divide that $65,000 divided by the total number of

clients you've ever had. Again, different from the transactions you've ever had, especially if you're work with investors because those clients are more are more valuable than others. So divide the $65,000 by the 100 clients that we've had in this example. That gives us $650. Now we have the lifetime gross profit number and the KAC. So now the last and likely the most important step is to compare the two. So step number eight is take the number from step five, which was your lifetime gross profit, which if you remember was $5,000 in this example, divide that by the CAQ, which in our case is $650. So $5,000 divided by $650 is, which is the cost to acquire a client.

And what number do you get? In this example, we have seven, a little over seven, seven point six nine. And according to Alex Ramosy's book, anything above six is good, anything above like 15 or something. I'm probably misquoting here. It's like amazing. In an interview that he did with somebody else on his podcast, that business owner, who was like a big business owner, he doesn't interview just like small business owners. That business owner said, as soon as we got the number above one, we started using other people's money to go all in. because yeah in like in reality like anything above one it you make more money than it then it takes

to find you the client so that that CEO like went all in he's like we just as soon as we got above one we like didn't even use their money they're like hey we fund it like we just asked for other people's money so I'm curious then this example we have you know seven almost eight I'm curious as to what your number is everybody's numbers are going to be different this gives you the overall health of your business. Shelby has a question. Overall, this gives you the overall health. We now have this like this number that Alex Hermose says is good, which obviously I trust him and you trust him because we love him. But let's, I'm a skeptic. What? I'm a skeptic. And what actually is the point? I know that we should understand, you know, the total that we're

making and we should understand our numbers and stuff like that. But like, what? I don't really, what is the point? Why are we doing this? Yeah. Super, super good question. This, so right off the bat, if the number is above one, you are, well, if it's close to one, find ways to decrease your CAQ, the cost to require, and find ways to make each client more profitable. So what, and this is, again, another rabbit hole that you can go down. You don't want to go down of what other ancillary services can I, you know, provide to the clients so that way they buy more. it's it's looking at your business at like the 30,000 foot view. Are we making more money than we're,

than we're expended? Perfect. Let's do more. As you're looking at in step six, as you're looking at the how much you are spending, that is where you can cut cost. But again, you can only cut costs so much.

So the first half, if your number is, close to one, really like anything below two, in my opinion, I would find ways to decrease the amount that it costs you to acquire client. In step six, as you're looking at all the different expenses that you're doing to get clients, what can you eliminate? What works the best? Because chances are you're doing some stuff there that isn't worth your time or money. So get rid of some stuff there and maybe thinking about doubling down or finding cheaper alternatives to do what you're doing. That's, again, so that's decreasing KAC, but you can only decrease that so much.

So in the other half is the first half of the equation, the lifetime gross profit. How can you make more money? Maybe it is changing your client pool. Can you change, can you start, you know, farming or targeting a different zip code that's, that's a higher price point? can you really just like work more hours and get more clients? Is there something that you're doing on the left, on the right side of the equation,

the KAC that you can just make easier for you or hire out at a cheaper price and that way you have more time to spend on the business? Did that answer your question, Shelby? Yeah, so it's very helpful. Thank you. What else do you? It was helpful. Because it is one of those things where it's like, it helps to hear the actual reason why. Because if not, I'm like, I think this data is cool. But if I don't know how to practically apply it to my business, it can, you know, there's so many things we could be doing with our time. And we just want to make sure that it has practical application. And it's not just a rabbit hole for a rabbit hole. You know? Yeah. Yeah. So I pretty. Which it does. I answered. I answered what to do kind of if your number. is low. But what if your number is high? You know, what if your number is seven, eight, 15, 20? Then at that point, they're like, hell yeah, congratulations. You're doing amazing.

What can you, again, it's still, it's still kind of solving the same questions. Like, how can you continue to decrease your cack even more? Because at that, at that point, some people start getting complacent. They see like a really great number. Like, oh, fuck yeah. Let me, let me, I have extra, you know, cash. I have more profit. What can I do with this money to like start making more money? And that, my own personal lesson here is that that's when entrepreneurs start paying for stuff that was completely not necessary. So make sure that if you realize your number is high and you're feeling good. Congratulations. It's well deserved.

Do not spend that money on different stuff. Look at the stuff that you're spending on step number six and throw all of your extra money to the biggest. bang for your buck in getting even more clients. So that's what I would do is like, is just use what's proven in your business that you like and, and spend the next six months throwing even more into that to get that number even higher. So I do not have a golden nugget for this. There's nothing going to be on the agent goldmine.com, but there are a lot of other tools on there from every other episode that we've ever had. So check that out. It's completely for free. the agent goldmine.com.

If you have any questions, DM us. We're on Instagram. We're always active and respond to everybody. Allie, the agent, and the Shelby Show. And for those that do message us with their number, I have a surprise. It's going to be limited time. I don't know how long I'm going to be doing this.

So if you message either one of us, I'm feeling generous today, and I probably will turn this off at some point, but let us know your number and we'll hit you up with something that's going to be worth your while. So this was the agent goal. mind be a bro and share this show