26 May 2020
You want leads. Lots of leads. Every agent does. After all, the more leads that come in, the more opportunities you get, right? It’s like baseball. So long as you get a turn at bat, you have a chance to get a hit. So, the more turns at bat the better.
In fact, baseball is a terrible analogy when it comes to real estate lead generation. It implies that all real estate leads are pretty much equal, so the more the merrier.
But you know that’s not the case.
Real estate referrals, for example, are leads. Yet, if you had a choice between getting 10 good client referrals and 20 leads that were generated from a Facebook ad, you’d pick the referrals every time.
Why is that? It’s because real estate referrals are high quality leads.
Lead quality is defined in two ways:
- The likelihood the real estate agent lead will convert into a new client for you.
- The competition. (How many other agents is that prospect checking out?)
So, when you have a prospect who has been recommended to you by a previous client, the chances are good they’re going to hire you. Also, they’re probably not talking to any other agents.
High likelihood of conversion. Low competition.
Compare that to a lead generated online, perhaps from one of those online real estate lead generation services where you pay a subscription fee to get a website and a bag of leads each month. Because those leads are generated online through ads and other means, the quality is low. Why? Because there are a lot of tire kickers on the internet. Also, those prospects are shopping around and likely visiting several agent websites.
In the case of these online leads, the likelihood of conversion is low and you’re fighting a crowd of competitors. Not fun.
The industry numbers bear this out.
Last year, according to industry research, more than 200 million leads were generated online, many by digital marketing companies where agents essentially “buy” leads. That sounds fantastic, until you look at the conversion rates.
Less than 1% of these online generated leads converted! That’s simply because the lead quality is generally low.
Compare that to real estate leads where the quality is typically high.
- Client referrals using a client referrals marketing system.
- Geographic farming using a lead generation system.
According to research by the National Association of Realtors, approximately 60% will hire an agent they’ve worked with before or who has been recommended to them. Many other high-quality leads are from real estate geographic farming, where relationships with the residents were nurtured by the agent and, as a result, that agent became liked, trusted and top-of-mind.
When you generate real estate leads in these ways, you working with a prospect where you have a good likelihood of conversion and where there is low competition. In fact, you might be the only real estate agent that prospect is talking to.
But there’s another advantage of focusing your real estate marketing on generating more quality leads.
Relying on digital marketing services to generate leads, even if you’re working with a digital marketing real estate lead generation service, is exhausting.
First of all, you’re having to follow up on leads that, on average, have a 99% chance of going absolutely nowhere. That’s time consuming, not to mention disheartening!
Secondly, most leads generated online are time-sensitive. As soon as that real estate lead comes in, the clock is ticking. Most online leads have a half-life of about an hour. So, you need to follow-up, fast.
Why is that?
An online prospect is surfing, checking out many agent websites. They may also be doing other things on online, like shopping and chatting on social media. If they visited your website today, there’s a good chance they won’t even remember your name tomorrow. So, it’s a race. Will you follow-up before a competitor does?
If you have a large sales team that can do this rapid follow-up for you, you’re in good shape. Indeed, most online leads are converted by agents with big teams. But if you’re an independent agent, working on your own or with just an assistant, fast follow-up is nearly impossible.
You’re not going to excuse yourself during a listing appointment to email a new lead!
That’s why, for most agents, quality real estate leads are the way to go. And you get those from using good real estate marketing systems that ensure repeat business from past clients, get client referrals, and generate geographic farming leads for you.
Takeaway: Take a look at where you’re spending your marketing dollars. Are you investing in real estate marketing that consistently brings in quality leads? If not, make some changes. If you do, you’ll soon be getting more leads that actually go somewhere!