17 August 2018
All real estate agent leads come with a price tag, typically some combination of time and money.
For example, knocking on doors in a targeted neighbourhood won’t empty your wallet, but may take several hours. (And, make no mistake about it, your time has value).
Conversely, a full-sized ad on a bus shelter is expensive rather than time-consuming and could generate some leads — but, if you do the math, you might find your cost-per-lead is high. Maybe very high.
That’s why it’s important to invest your time and money wisely when generating real estate leads.
The best place to start is with referrals.
As you probably know, a referral has the highest likelihood of becoming a new client for you. Why? A real estate agent referral means you’ve been recommended to that prospect, probably by a past client of yours. When that prospect calls you, he already feels comfortable with the idea of working with you. In fact, he may not even be talking to any other real estate agents!
But you won’t get many referrals by knocking on doors or placing ads.
The way you get more referrals is with a real estate marketing system that automatically stays in touch with your past clients and builds loyalty. When you’re top-of-mind with these contacts each month — via a monthly direct mail newsletter, birthday cards, calls, and visits — they think of you when asked, “Do you know a good real estate agent?”
When you use the right system, you’ll quickly discover that referrals are also a bargain compared to generating other types of real estate agent leads.
Consider the following:
- Compared to ads and door-knocking, referrals have a lower cost-per-lead.
- Unlike leads from online ads, where you might get calls from prospects who are “just thinking about selling”, referred prospects are often serious about listing.
- A referral is much more likely to become a new client than a lead from any other source. (So, you need fewer referrals to generate the same amount of business.)
Clearly, it makes sense to invest your time and money in getting more referrals. In fact, it should be the cornerstone of our business-building efforts. However, that doesn’t mean you should ignore other sources of leads. For example, lead capture on your real estate agent website also has a low cost-per-lead, as does geographic farming.
The lesson here is to consider the real costs of generating good-quality leads and focus on those lead sources that give you the best return.