The last week in July, the movers and shakers gathered in San Francisco for Real Estate Connect. According to the most recent research, rather than being “connected,” our industry is suffering from a massive case of “disconnect.”
The Real Estate Connect conference provides a great opportunity to brush elbows with the best in the business. Virtually everyone who attends shares the vision of doing business online. This year I was hoping to hear good news about how agents are doing in terms online marketing. Much to my disappointment, the news was terrible.
According to NAR, somewhere between 71-78 percent of clients begin their search for a home online. According to a study from the California Association of Realtors, the average Internet buyer looks at six houses and takes two weeks to purchase. In contrast, “traditional buyers” look at 15 houses and take seven weeks to purchase. The CAR study also shows the average Internet buyer spends $470,000 on their home whereas traditional buyers spend only $350,000. Furthermore, the Internet is now the number two source for generating buyer and seller leads, second only to yard signs. Bottom line: Internet buyers are gold.
The most shocking news for me at Real Estate Connect was our industry’s huge disconnect. We are currently spending 96 percent of our advertising dollars offline and only spending 4 percent online. In fact, we spend 56 percent of our marketing dollars on print advertising and 23 percent on Buyers’ Guides. In other words, we spend 79 percent of our marketing dollars on print advertising that produces only 8 percent of our sales. We are literally wasting multimillions blindly by continuing to market as if the Internet doesn’t exist. Traditional brokerages complain about new business models such as HomeGain, Service Magic and Lending Tree. The only reason these companies are successful is the brokerage community has failed to keep pace with our client’s migration to the Web. No wonder powerhouses like Barry Diller eye the billions to be made in real estate and have set out to “stake their real estate claim” on the Web.
Compounding the problem, agents who market on the Web often fail to recognize what the consumer wants and needs. Every time I hear Alan Dalton speak, he always quotes the statistics from Realtor.com:
“The number one thing Web visitors want is plenty of pictures.”
What do most agents continue to do? They prominently display their picture on the front of their Web site with no link to the Multiple Listing Service. When they do post a listing to Realtor.com, most provide only one picture. Few go to the expense of having a virtual tour.
Even when agents generate Internet leads, most do a poor job of following up. Twenty-five percent of Internet buyers expect instantaneous follow-up. Another 50 percent expect someone to follow up within two hours, and 100 percent expect follow-up within one business day. Agents who do respond, hit the jackpot. Fifty-seven percent of clients who search the Internet end up doing business with the first person who contacts them. What is amazing is 70 percent of the agents take at least two days to respond, and another 58 percent of agents do not respond at all.
Perhaps you read “Who Moved My Cheese.” The story is about rats living in a maze where their cheese supply has moved. The rats who have an existing storehouse of cheese are surviving on their dwindling supply. Others are still looking in the same place hoping the cheese will magically reappear. In contrast, one rat sets out to discover a new source of cheese and ultimately finds it. The rats who stay put end up starving.
Make no mistake about it. Barry Diller is in the real estate industry for one reason only–to make a profit. He knows the “cheese” is on the Internet and that we are doing a poor job of marketing in this powerful medium. Our “traditional cheese supply” is dwindling. The question is are we going to stay put and “starve” or are we going to make the shift from “disconnect” to “connect”?
Bernice Ross is an owner of Realestatecoach.com and can be reached at firstname.lastname@example.org.
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