The major third-party websites such as Realtor.com, Trulia and Zillow like to promote how many "unique" visitors they have to their respective sites. For agents and brokers alike, the question is whether all this traffic is something that translates into closed transactions for their respective businesses.
I recently did a three-part series on listing syndication including a look at how some brokerages are addressing the syndication issue. After the first part of the series ran, I received a nice call from one of the people at Zillow. She shared that they had 35 million unique visitors the preceding month.
While no one knows the exact number of unique visitors that each site generates, there are some ways to compare and contrast how many visitors each site is attracting. Ebizmba.com creates a composite score for most sites based upon their Quantcast and Alexa rankings.
For the month of June, Ebizmba estimates that Zillow generated approximately 15 million unique visitors. Zillow also provides the real estate feed for Yahoo Real Estate, which Ebizmba says attracted 13.5 million unique visitors. Trulia supposedly generated 8 million unique visitors and Realtor.com generated 7.5 million, according to Ebizmba.
What makes these numbers particularly interesting is that in 2012, NAR is predicting that the residential sales volume will be slightly under 5 million transactions. If you assume that at least half of these sales/listings will be to the same households (i.e., a household sells and buys another property), that means there are approximately 7.5 million households who will actually convert into closed sales.
Even if all 7.5 million households who will transact this year visited a site such as Zillow with 13.5 million "uniques" per month, there are at least 6 million of those visitors who will not transact.
So what does this all mean for your business? The pivotal question here is whether advertising on these sites or paying for premium placement is worth it in terms of your personal lead conversion ratio.
What seems to be a problem for Facebook (i.e., does Facebook advertising really work?) is the same issue for third-party sites who rely on advertising as their primary source of revenue. Certainly, having your listings come up at the top of the search gives you extra exposure that may turn into additional leads.
The real issue, however, is to what extent do people contact an agent these days based upon an ad — whether it’s print, online or on social media? Ads alone without some other type of lead capture mechanism produce very low rates of return. Print ads work well when they are tied to an offer that motivates the person to supply his contact information, but what percentage of these people will ultimately buy?
Most websites convert at a 1-2 percent rate, provided there is some form of lead capture in place. Even when you get a valid name and phone number, it still may take 12-18 months before that person is willing to transact. Most agents lack the systems and/or motivation to stay in contact with someone who will be waiting that long to list or purchase.
Getting face to face is what matters
Ultimately, the best way to convert clients is to figure out a way to be in direct contact with them. The National Association of Realtors’ most recent Profile of Buyers and Sellers still shows that about half of all transactions are generated through referrals.
Buyers and sellers may be visiting all these different sites, but when it comes down to hiring an agent, they will do one of two things. If it is a listing, sellers tend to hire one of the three most prominent brands in their market area. The thinking is that if a company and/or agent have lots of signs in an area, they will also have plenty of buyer leads.
In the case of a buyer, they make their selection based upon personal connection. The company itself is less important. NAR’s research also shows that three out of four buyers and sellers do business with the first agent they hear from or connect with personally once they have decided to purchase.
A better use of third-party websites
Most agents don’t realize that they can really take advantage of Trulia and Zillow at no cost. The approach is simple. Be active on these sites in terms of answering questions that are posed by buyers and sellers. Search for the ZIP codes where you are active and then answer questions posed by Trulia and Zillow users. While you may be competing against one or two other agents, in many cases, you may be the only person answering the question.
What’s particularly interesting is how many people are totally open about making a move. The strategy is to answer their questions and to avoid doing self-promotion. Make sure that your profile is as complete as possible so that when a potential buyer or seller clicks on "contact," the lead can find you easily. Also, keep your information up to date and target it to a specific market area.
Does it make sense to advertise on any third-party website or social media? The only way to legitimately tell is to track where your leads for your business originate. If you’re closing deals, keep working that channel, and if not, try something else.