The Science of Flipping - Episode 186: PPC Advertising with GEOFLIP

Episode Date: February 12, 2021

Episode 186: PPC Advertising with GEOFLIP

You know, you're spending $200,000, right, but you're making $900,000, so you're actually netting $700,000, so it's less money. And this is where people, in my opinion, are us REIs, we the Science of Flipping podcast. I am your host, Justin Colby. This podcast is all about the right tools, processes, systems, and implementation to make you not just a successful investor, but a profitable one as well. Today, guys, I have a good, good friend of mine, but also someone who runs all of my PPC, pay-per-click advertising. Mr. Greg Bilbrow is here from Geoflip. What's up, dude? How you doing, my friend? Good to see you. Dude, I am doing wonderful.

As a matter of fact, as I'm recording this video, tomorrow morning, I will be in a hospital with a brand new baby girl. So yeah, I'm very good. Very blessed right now. All right, well, we'll keep this efficient. Let's get efficient with it. You're a KPIs guy.

So let's talk PPC for a while. I get a lot of questions about what, what's the right marketing strategy for me. You know, I coach a lot of students all the way from New York to California. And I get this a lot, like what's the right marketing strategy? What should I be doing? And different people are in different places in their business, right? But PPC I have found. And again, for those that aren't familiar, it's pay-per-click advertising, typically on Google, but you also have Bing as well. And it's the search terms that you will find at the top of the page. And so I have found that PPC by far has the highest motivated leads relative to the other strategies that I use. Now I use direct mail, I use cold

calling, I use text messaging, voicemail drops, et cetera. And so let's talk about that because a lot of intrigue is behind that about the motivation of leads. And while PPC, I believe, and my experience says that is true, the highest motivation, yes, but it isn't always the highest performing lead volume marketing strategy either. And so where this conversation, I think, is naturally going to go between you and I is diving into KPIs and really talking about dollars and cents. So let's just kind of start there. Let's talk about the motivation of pay-per-click advertising leads. Sure. Well, that's a good intro. And just for your listeners or for anybody who doesn't know, I'm Greg Bilbrow, CEO of Geoflip, and I've been doing pay-per-click marketing full-time and doing nothing else for other people as a service provider for four years. But I did it for myself as a principal,

as a flipper, a wholesaler in Phoenix, Arizona, for the four years before that, or maybe three years before that. So I got seven, eight years of this now, sitting in both chairs as the owner operator, flipping houses, putting deals together, doing, you know, processing leads, managing a sales team. And then the last three or four years, it's been helping other teams grow with lead gen. So with that as a backdrop, I think you're right. And I think there's KPIs that can support this about, is there greater motivation from what we will call pay-per-click marketing leads or less motivation? And I think I can argue and make a case that that is true, but instead of getting to the numbers first, I'd rather just sort of describe it that everybody can relate to. So just a day or two ago, I was showing somebody I was coaching a picture of a food line, or I should say a food truck, and 10 or 20 people at this food truck just buying food.

There was three people in the food truck making food, 10 or 20 people outside of the truck, you know, getting food. And so I asked him who of that picture, who is a food buyer? And the person I'm training says, I don't know, 16, 17 people there in front of the truck. And I said, sort of, there's one girl with money in her hand and her purse out at the actual cash register talking to the girl behind the cash register doing this move right here. That is the act of buying food. The 15 people behind that girl is profiling them. It's guessing that they're food buyers. It's that there's a likelihood that there's a food buyer. It's probable that if they're standing in food, in a food line, and they're in the third or fourth spot, you know, looking at the menu. Okay, but that's the difference that I see in our industry. Pay-per-click marketing is what I call

proactive. Meaning the person is at home sitting on a couch or at work or whatever, having a problem. Could be real estate, could be financial, just a million things could be the problem. But the differentiator is that this person on the couch that's having a house problem, financial problem, or otherwise goes to their laptop or goes to their iPhone or goes to their computer and makes a conscious decision to think of their question and then makes an act of opening up their laptop or going to Google or whatever. I mean, that's an act. That's a physical act. That's getting a body to do something of which it was a state. It was a, it was a sitting body prior to, and then it asked Google, whatever it asks Google, right? The, the,

the search. Okay. That's all proactive. The person is doing that upon their own volition. It is their act, their thought, their energy, they own their pain. Okay. That's where pay-per-click marketing starts. That's what, that's what pay-per-click marketing is. It's the person getting off the couch, thinking of their question, going to Google, typing it in, looking at what Google tells them is, you know, some options from which to consider. And then the motivated seller clicks on one. If they click on one of those and then decide to actually make a phone call or submit their information, all of that was their act. That was all them stepping forth. That was all them walking

forward into what? Uncertainty, right? Talking to strangers is uncertain. Making random phone calls to the internet with, you know, those are all like little pieces of points of resistance. Yet if a motivated seller passes all those little mini tests, you know, there's definitely an argument to suggest that that is a person that has a problem that wants to take an ownership position in their problem and search it. Everything else is reactive where you're buying lists or you're looking at something and then you're making estimated guesses on like big lists or, or whatever it might be. Not that that's the only game in town, but you're profiling something and it's just a different approach. I'm not going to say one

is better or worse, but the one that's where you're profiling and trying to guess that this is going to become a lead, that's where you're convincing them that they have a problem and that hopefully you can turn them into a closed, an escrow or not. Right. And so that's the distinction. One is where you're reactive. One is where you're proactive and PPC lives in that proactive space. The motivated seller owns their pain first. Yeah. It's funny. You, you and I looked at it similar, but opposite. Okay. Let me hear this. Yeah. So I say proactive marketing is calling and text messaging. Oh, I get that. Reactive marketing is when you spend money marketing and wait for that person to come to you. You are being reactive. I get that. And that's from the perspective of your student, your client, you're the flipper, the REI. And I get that and that's from the perspective of your student your client you're the flipper the

REI and I get that that makes sense to me too and I speak in that language from time to time as well yeah yeah so we're kind of saying the same thing you're you're taking the perspective the homeowner right I'm being proactive as a homeowner I have a pain I need to go get help I'm taking as like one of my students myself and I'm saying hey, be proactive, go after those people and have a conversation. Right. So, but by the way, the biggest key that you said in there is, um, you're not saying one is better than the other. This is why I mandate my students have multiple marketing strategies. The only time I've ever been hurt in this space of 14 years, by the way, dude, I've been doing this for 14 years. It kind of blows my

mind. That's amazing to think that. Yeah. So the only time I've been really hurt financially, I mean, uh, is when I've been a one trick pony with marketing, meaning in 2010, uh, which is 11 years now, she's, uh, I was only buying homes from the auction steps. That was the only place I was buying them. I was doing no other marketing at all, right? And then the hedge funds came in. And when the hedge funds came in, they were outbidding me 20, 30% or more on these homes. I mean, I couldn't even sniff the numbers

they were gonna give, right? Like I was nowhere near. Well, it took me three months to really catch on to, I'm not going to get anywhere close. Well, that means I didn't buy any homes for three months, which means I wasn't renovating any homes for another 30 days, which means I wasn't putting it on the market. Essentially, I didn't collect a check for 90 or I'm sorry, nine months. Because of this, I had all my eggs in one basket, all of them. Um, the other part was when I was only doing direct mail. This is prior to geo flip. This is before I was using you, uh, PPC, right. Is

I had 40 grand a month going out on direct mail only every month clipping down 40 grand. Right. Um, and all of a sudden my callback rates went from 1% to 0.005, half of 1%, right? And when you're spending that kind of money and you have a certain return, and this is where I figure we're going to get into numbers here. Sure. Like you're spending money to hit a certain, a 3X return minimum, like that's the baseline. And all of a sudden you have half as many leads. Yeah. Well, now you're starting to outkick your coverage. I call it right. There's a law of diminishing return. I'm spending too much money for not getting enough leads. So then I realized, okay, first of all, I got to figure out the direct mail. But second of all,

I need to layer in other marketing strategies. So we immediately had a conversation with you. This is, you know, PPC, this is four years ago, ish. You know, we layer in PPC, we layer in, we start cold calling again. And now most recently, obviously the buzz in the world is, is text messaging over the last year or so. And who knows where text goes because all the carriers and things of that nature. But, you know, now I have four fundamental marketing strategies, PPC, direct mail, cold calling and text messaging that all are running simultaneously. And that allows me to have one month or two of a marketing strategy that's not really performing to where I need it to be because there's three other marketing strategies working. Even if two aren't performing, I have two others,

right? And so this comes down to, again, people understanding their numbers. And most importantly, when leads are coming in, making sure you're converting. And that's why I love PPC. Because although cold calling brings in a much great, greatly higher lead, right? And I'm doing this on purpose. I have the little bunny fingers for those of you may be listening to this. Yeah, it's true. It has a higher lead volume. The amount of leads I need in cold calling pale in comparison to how many I need in PPC. So it becomes this, like I say, math, right? So if I'm

going to spend 10 grand a month on PPC and I bring in 20 leads a month, but I can convert one out of every nine. Well, as long as I'm making at minimum $10,000 per deal, I'm going to get two deals. I at least two X my money. Right. Um, calling is totally different. Right. Yeah. Cold calling right now. Cause we just started meeting this morning. Uh, we brought in, uh, 79 leads last week. Okay. 79 leads last week with cold calling in one week, 79 leads. The difference to your point is this motivation from the homeowner where they're being proactive because they're saying, I have a pain. I need to find this person who buys houses fast. That's right. Yeah. Versus cold calling where I'm being proactive. But now to your point, I'm saying, Hey, Greg, have you thought about selling? Greg says,

I don't, I mean, maybe. Okay. Well, why haven't you maybe listed yet? And then I start to talk them into the concept of selling, et cetera, and then the nurture. So, you know, PPC to me is a no brainer, but let me, I'm going to let you speak in a second, but I want everyone to understand GeoFlip is the company that I have used is literally when Greg and I first sat down four ish, five years ago, I've said, dude, I've used all the companies. They suck. PPC doesn't work in Phoenix. It's terrible. And Greg basically just said, let me prove it. Let me show you how we're different here. And they did immediately. And that's why he's on my show today is because it actually worked in here in Phoenix. Now, the key though, is PPC isn't for everybody. If you have,

you know, a thousand dollars marketing budget a month, PPC is not for you. It is, I don't want to say a very serious marketing strategy, but like, and Greg, you might have a different perspective, but if you don't have, and I know you have different programs for where people are at, but like, I would not encourage a student of mine to get involved with PPC if they didn't have a $5,000 a month budget, right? Because you have the management cost for GeoFlip. You have the spend on Google. And if you can't drive in 20 leads a month, and depending upon how good you are at conversion, right? And sales, like you might be torching money, right? And so I just want to say it is not as much as I love you

and promote Geoflip and everyone needs to go to geoflip.com and use promo code TSOF. Or in fact, at this point, you even gave me geoflip.com forward slash TSOF. There you go. Geoflip.com forward slash TSOF. So if you go there, you'll land on your beautiful mug and your page. And yeah, that's right. So let me talk a little bit about that with regard to marketing channel diversity, because it's something that I feel I'm passionate about it. I feel I understand it well. And I feel I have an understanding of

marketing channel diversity on a different level such that I can add value to even expert REIs because I see something different just because I'm in a different chair, not better. So here's how I like to describe that. Some of my REIs make big money, big boy money. So here's an example. Let's say a real estate investor spends $200,000 in a year on marketing. And that marketing produces, for example, a million bucks in gross revenue in the year. And let's just say in this example, he's a one marketing trick pony or one tactic, one marketing tactic, direct mail, for example. That's an easy one. Okay. There's nothing wrong with that. And to say that there's anything good or bad or wrong or right, it's just a myopic short-sighted understanding of what we're

talking about. When you have a one marketing channel, then anything that can take that marketing channel away is a hundred percent risk to your income. So marketing channel diversity. So here is an approach again, not better or, because every decision comes with pros and cons. You could take that same $200,000 expense in marketing and try to make a million bucks. And then I asked the following question, would you rather spend 200,000 and make a million bucks? Or would you rather spend 100,000 on a marketing channel that makes you 500,000 bucks? And then another marketing channel that you spend 100,000 on that makes you 400,000 bucks. And then another marketing channel that you spend 100,000 on that makes you 400,000 bucks. So in, in, in example, a, you're making a million spending 200,000. So you net 800, right? An example B, you know, you're spending 200,000, right? But

you're making 900,000. So you're actually netting 700,000. So it's less money. And this is where people, in my opinion, are us REIs. We get lost in what we really do. A business owner, one of the most important things a business owner can do is risk management, not make a shitload of money. And so when we get into that reptilian brain, that whole, I want to buy Ferraris and boats and stuff, I get that. But what's way scarier is to have your million dollar income evaporate and not know what to do. What's way scarier is if your million dollar income vanish and you have the inability to pivot and you got nothing on batter's deck or warmed up in which to pivot. In fact, step one, when your million dollar rev goes to zero panic, that's always step one is panic. Everybody that's what happens because you got, you got fat and happy on your, in a comfortable setting, let's say. Okay. So what's better? Do you want to spend 200 to make a million? Do you want to spend 200 to make nine? That's up to the operator. What I say is marketing channel diversity has its place. And

it's important because I've been on both sides of those, uh, that equation too. I've been a one trick pony and I've never had four channels like you, Colby, you're a pretty, you know, you've, you're pretty, that's a lot of moving parts that you do a good job coordinating. And that's the con to what I'm saying. That's the negative to what I'm saying. And again, it's not a con or negative. It just has to be understood as an operator, a business owner. If you have two channels, it is not a little bit more complicated. It is significantly more complicated to correctly understand and manage when one piston is up in a month or a quarter and one piston is down in a month or a quarter. And to recognize that you have two good pistons that sometimes don't fire at the

same time. And I profess this to all my clients. Now, those that only have a good pistons that sometimes don't fire at the same time. And I profess this to all my clients. Now, those that only have a little bit of money, they can't afford, or sometimes they don't have the management skills to manage two or more marketing tactics. And I get that. But what we teach is you walk before you run. So we work our way into that. And like yourself, you got four things running. If one or two things is sucking wind, hopefully one or two other marketing channels is doing decent to great. And I suspect that's the case. And I know that's the case because A, you tell me, but B, I know that that's how this works because all my clients that have two or more channels, that's what happens. One month,

Geoflip will be up. The next month, you know, it might be down and their other thing will be up. But at the end of the day, my client goes to bed knowing two things work and they've got marketing channel diversity. If I get hit by a bus, their other thing can work. If their other thing gets hit by a bus, we're not going anywhere. That's right. I mean, that's really, you're saying the exact same thing I'm saying, right? And it's just risk management.

And that's why I told you this two stories of where I got pounded financially is when you're clipping off 40 grand a month that's spent on direct mail and literally the callback ratio, just whether it was competition, whether it was right place, right time, whatever was happening,

my callback ratio got cut in half. You can't sustain that, right? That means I would have to double my conversion essentially. And you're not able to double your conversion overnight. Can you do it? Yes, but you can't do it overnight. And so I tell those stories for the exact point you're bringing up. And I don't even know, let's give you a little plug. I know you have several programs. What are the three kind of layers? I think it's three that you have for investors at Geoflip. It's three tiers. It's very easy to understand. It's intuitive, I think, to everybody. The lowest tier, the beginning tier is for beginners, part-timers, newbies, you know,

people trying to figure the business out, getting into the business, doing it on the part-time or whatever. It's a little bit, you know, we define it more than that, but the way I want people to think about it is, yeah, entry level, we have a tier for that. It's very inexpensive. It's low headache. It's low management. It's very easy to just kind of get people up and running and get exposed to digital marketing where we somewhat protect them from spending money, keeping their money out of harm's way, but it's very hands-off and definitely we deliver leads. Definitely you flip houses and definitely it's for newbies, but under 5K. So if you've got two, three, four grand a month, that's a good fit for you.

The next tier is called professionals, which is me and you. It's career guys. It's full-time people. We're already spending 5, 10, 20K, 30, 40, 50K a month. We're a one-man show who's really got our game tight or, you know, a girl show or like, you know, a team of five or 10 people with an acquisition manager, lead manager, construction crew, what have you. That's the professional package. That's anybody spending five to, you know, 20 grand, 15 grand a month, something like that. And that gets most of us, the guys that are you in our world, that's that's nine out of 10 people, professionals. And then the third tier is enterprise level. So we're going to start working on, and we have started talking to some larger regional and

institutional buyers because you're right. Lead flow can be sparse at times where you're getting two, three, four, five leads in a week. And that can be frustrating at times. But if you got big budgets in a big region, like you want to own the West Coast or SoCal, we can make it rain because our tool is Google Ads, the largest advertising network on earth. So the bigger sandbox that we can play in with bigger budgets, we can make it rain. So we have an enterprise package as well, which is 15K on up. Yep. And so let me just, what know, what I would say to this and, and kind of to surmise and wrap up is I'm a massive believer in PPC. I'm a massive believer specifically in the head honcho, Greg Bilbro, who you're talking to right now and his company Geoflip. So if you go to geoflip.com

forward slash T S O F, that's how you're going to get in front of Greg and see if this is a good fit for you. Geoflip.com forward slash T-S-O-F. But also I'm a believer in diversification of your leads. And lastly, or diversification of your marketing that brings leads. And then lastly, what I'll tell you is if you are thinking about talking to Greg and team about pay-per-click advertising, pay-per-click advertising, PPC, make sure you're clear on your expectations. Because I have sent people over to Greg that I did not clarify for them what they should be expecting, and it got egg on everyone's face. So let me now kind of state proper expectations for you,

is you should not get into PPC for less than six months. If you are going in to see if this works, ear bunnies for those listening, bunny ears, don't do it. Stop now. PPC is not for you. This is not a 30, 60 day game, not even really a 90 day game. And I know a lot of you have heard me say like, you got to test things out for 90 days and make a decision. Pay-per-click advertising isn't even that. Like you don't, in my opinion, if you're going to do pay-per-click advertising, have the bandwidth to go for six months because you will see the reward start to pay off at that six month point. In pay-per-click advertising,

I don't care the company, you're going to have peaks and valleys to some extent. But if you're able to go for six months and look back, you will see that there's an even line of leads that came across your desk over the six months. And if you're not in the strategy long enough, you will not see that. You will just see peaks and valleys. And that's not fair to Greg, Geoflip, or any marketer ever, because the reality is it does take time for their engine to ramp up, just like it takes time for direct mail and everything else. And so I just want the proper expectation. If you're going to go to the geoflip.com forward slash TSOF, understand you want to have a bandwidth that you can run for six months with this to really unkink everything, right. To get a consistency, to get his team, to get to where

they need to be. Because I know one thing, Greg, you and I just had a conversation about this. I believe I'll let you say it, but if a investor who's your client, right? Stays with you for a year. They've all made a certain amount of money. Their return is all above a certain price point. Minimum is 3X. Yeah, it's 3X and the average is 4X by a year or more. So, but almost nobody has a 3X or 4X in the first 90 days because it doesn't work like that. So you make a good distinction. Let me add just one detail to that, Colby, if I may. You're right. Don't do this unless it's six months or your mind is set to something along those lines. But we also at Geoflip, me being an REI in my blood is I understand the desire to have a fast start and to build confidence early and early wins. I understand

that. So we've made some adjustments to try to make the demonstration of the return on investment present itself earlier in the REI's journey rather than later. So we now have a couple of things that we're doing to do that in a simplest form. What we're doing is setting clients' expectations to six months, but now we're basically forcing a little bit more money at Google because this, our business is about data and optimization. So low data can't optimize. A lot of data can't optimize. That's how it works. So for REIs that are out there, this is like, we're like, I mean, we're not Silicon Valley, but think of Silicon Valley when you think of Geoflip. It is a data play. We need a boatload of data. And when we have a boatload of data, my data nerds, it's normal. They know what to do because that's normal. It's easy. It's not hard. But when we have no data, little data, sparse data, or tiny budgets, small budgets that don't allow us to get the data, it takes us forever to optimize. So six months is just one of those adjustments. We used to say three,

but it's been taking us longer to get to the data because of the market that we can talk about later. But it's just been so little distress over the last year or two that getting distressed, hyped ads, and all that information on the search query side just took us a little longer. So that's what that is. It's not like it's bad or good or broken or whatever. side just took us a little longer. So that's what that is. It's not like it's bad or good or broken or whatever. It's just takes us a while to optimize because of the data. Yeah. And so just to kind of wrap it up here, obviously you guys have the website. I am a massive believer in PPC. It is one of the four marketing strategies. It has the highest motivated seller. If you are serious about it, I really encourage you to get on the phone

with Greg and his team. They don't accept everybody. That is for sure. So go to the geoflip.com forward slash TSOF, geoflip.com forward slash TSOF. And dude, I really appreciate you spending some time with us. This is really important

because I'm a firm believer in not just your company, but PPC in general. And so thank you for spending the time on here, dude. I appreciate it, man. Thank you for the opportunity. And can I close on one last point? Of course. Okay.

I just want to say this and I know you got to run, but right now we're at what in February 2021. I don't know when the S is going to hit the fan in residential real estate. And I'm a believer that the S is going to hit the fan in residential real estate. And I'm a believer that the S is going to hit the fan in residential real estate. I know there are others that say no, or, you know, the government's going to change the rules, but I think the shoe is going to fall or the S is going to hit the fan, whatever you want to say. And the last thing I want my REIs to do is when they see a gigantic wave of real estate default, then call GeoFlip. You should be three, four, five, six, seven, eight, nine, 10, something months. We data and a knowledge of your geo and a knowledge

of the client and a knowledge of the data patterns, six, three, four, five, six months before the S hits the fan. I think the S is going to hit the fan this year. I believe that I've been saying that since last year for a year on every zoom call I've ever done. So if that's true, I do really encourage clients to get into whatever marketing channel they're going to do, whether it's GeoFlip or otherwise, and get that figured out first. And now, and get your KPIs tight because when the S hits the fan, it's going to be like on a little tiny dinghy or canoe or somebody shaking it. It's going to get shaky. It's going to get crazy.

We're going to see a wave of default 10x bigger than we've ever seen. And it might be much bigger than that. But I think 10x is conservative. So what we're about ready to experience is going to be unlike anything any REI has ever seen ever. And I do believe that. That's not hyperbole. So get your numbers tight. Get your marketing tight

because it's our Super Bowl. If you're an REI and you're well-prepared, our Super Bowl is coming. It's right in front of us. So get those things established now. Get your sea legs underneath you and be prepared. You're in the right time at the right place

if you're an REI. It's right here right now this year. Yeah. No, I love it. Great point, dude. Way to no i love it great point dude way to end it on a great point appreciate it geoflip.com forward slash tsof thank you for coming on bro and we'll talk soon have a good one Outro Music