I’m going to start by saying something contrary to popular opinion: Stop the obsession with online leads. For some reason, there’s an infatuation with online leads in our industry. They’re built up as this real estate marketing magic bullet that will solve all of your real estate problems and immediately and exponentially increase your business. But this is just a pipe dream.
It seems that there’s a new online lead generation tool or company popping up every single day, which makes it exhausting to try and keep up with all the new choices. The narrative is that more leads will equal more business. This is surprising, because while the number of online leads generated continues to grow, the number of homebuyers and sellers remains roughly the same every year. Something just doesn’t add up.
Don’t get me wrong: I’m not saying that online leads shouldn’t be part of your business strategy. Yes, millennials are using technology more than any other generation to find agents, and yes, every agent should have a lead generation strategy and understand how online leads fit into that plan. When agents do get a lead, they need to have an approach to respond to it almost immediately.
I’m not trying to challenge the value of an online lead. I’m challenging the mentality people have toward them and the inordinate amount of energy that’s spent obsessing over them. Not too long ago, real estate agents managed to market themselves before the internet, before social media and before all listings were online. Real estate is still a people business.
Leads are people you may or may not know who have shown some level of interest in you or in something real estate-related that you’re connected to. So, why are random people who filled out an online form marketed to and pursued more than past clients and those we see and interact with every day?
The No. 1 source of buyers and sellers is still referrals. In fact, Zillow shows that 52 percent of buyers and 67 percent of sellers are coming from various referrals, past experiences and an agent’s visibility in the community. How does your marketing strategy that’s geared toward your No. 1 potential business source compare to your online lead efforts? There needs to be a shift in the mindset and a focus on how we’re marketing to past customers and people we currently have in our database and even in our phones. Invest in marketing efforts geared toward connecting with the people you already know right now, as these are your leads.
Here are just a few of the many ideas you can try:
- Host a client appreciation event
- Try a reverse or regular pop-by
- Send your past clients a market update once a year
- Sponsor a local sports team
- Text 10 people in your phone and ask them how they’re doing
Work to stay connected with those you already know so that they don’t become an online lead for someone else when they’re ready to buy or sell.
Technology will continue to impact how agents generate new leads and market to their sphere. We recognize this here at HomeSmart International and believe in giving our agents 100-percent commission and 100 percent of the technology they need to build a better business. By allowing agents to keep more of their hard-earned money, and by giving them access to a stack of tools and marketing resources, our agents have the financial freedom to invest in the techniques that are right for their business. Whether or not online leads play a large or small part of that is up to them.
Adam Bauer is the vice president of Digital Strategy at HomeSmart International. Bauer is responsible for maximizing the company’s digital footprint and guiding the strategic roadmap for its online presence. For more information, please visit HomeSmart.com/join.
Online leads many times is a waste of time and money. However, there are a few Zip Codes that have worked well for me on Realtor.Com. But in all reality, business is simply going back to the basics in many ways. It takes time to build a business, following and referrals will pour in! This is the most important part of this industry. Of course as you mentioned, there is so much technology and platforms to advertise.
Instagram, Linked-In, Business and standard Facebook only to mention a few. Our professional performance in every aspect of any deal is this is how we get referrals. Farming and advertising in many mediums are also still very effective. Reaching out to clients well after the sale is critical as in my case, I am hopeful that my buyers, sellers and investors are clients and friends forever. That is the way it is supposed to work.
Frank DolskiAssociate Broker/RealtorColdwell Banker Hearthside
Online leads have been an excellent vehicle for most successful Agents to get started in the business, and most large teams are utilizing them. I sold 2 properties in my first 6 months before discovering the magic of online leads, and now, 5 years later, are doing almost 400 transactions a month, with 80% of those coming from Realtor.com leads. However, the Agents who do not have success with these leads are the ones who never set up a system to handle them.
After 39 years in the business this is still the truth! My business comes from the people I am led to every day! If you have a servants heart the business will come!
Yes.. I have bought leads, and no, they never worked. Too much money spent for so little return. Back to basics. My video’s and open houses are my best source of leads.
Comment We have found that the quality of online leads we were paying for went down substantially. Even in the sought after zip codes . We have switched our budget to more old school types of prospecting and it has been working.
I do social media and other marketing for Realtors for a living and I agree! There are so many ways to prospect for leads. Online is just one part of the puzzle. Print, radio, tv, billboard, in-person networking events, door hangers, phone calls, texts, emails, chamber of commerces and other options ALL need to be considered as part of a complete marketing plan.
Comment Nicely said Frank. I attended a meeting/gathering of the high end/ Luxury market brokers Spring 2018 and they mentioned getting back to basics .
Great column – online leads play a PART in my business (not much) but I’m building my business (and have built it), but calling, writing notes, dropping by and having coffee with my core sphere who then refer me! I would like to know how many people are on the team that does 400 deals a month with 80% from online leads. That sounds incredible! And he’s right – without the systems in place, no lead generation is going to work!
Levi Strauss didn’t make his fortune mining for gold in the California gold rush… he made it selling jeans to the miners. Zillow made 190 million in profit in 2017… selling people’s names and contact information to agents that would have worked with those Buyers anyway. While referrals from past Clients will never go away… the control of new Buyers entering the market is absolutely up for grabs. The franchises are seeing the potential profits and are turning from managing brokers to competing brokers as they follow Zillows lead in trying to reset the compensation table. Online lead sales are the new LEVI JEANS… agents do all the grunt work and the third party vendors make the easy money. WAKE UP REALTORS! STOP empowering your competition. Note to REALTORS ASSOCIATIONS.
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Online leads and online interaction IS the future. Don’t bury your head and hide from it. I see the problem as this- Who is generating that lead? If it comes from a marketing source that is just forwarding and email address then its low or no value. If the lead is attached to a question, then its better. If it is a question specifically designed for a local professional to answer, then its red hot. I say generate those type of leads yourself. Answer a question. Solve a problem. Make yourself available and become the local ‘online go to expert’. But, don’t expect companies like Zillow to make leads cheaper just because they aren’t designed for you. Expect them to be more expensive when they do, or worse- a way for them to answer the question and solve problems without you. Make it easy for online searches to find you based on your ability to answer their questions. And be ready to answer them.