Editor’s note: With more consumers starting their home search on the Internet, online lead generation and management has morphed into a sophisticated business as agents, brokers and real estate companies scramble to adopt the new channel. This three-part series examines the changing nature of online lead generation as local Internet search becomes more relevant, more brokers get involved in lead systems, and more technologies emerge.
Editor’s note: With more consumers starting their home search on the Internet, online lead generation and management has morphed into a sophisticated business as agents, brokers and real estate companies scramble to adopt the new channel. This three-part series examines the changing nature of online lead generation as local Internet search becomes more relevant, more brokers get involved in lead systems, and more technologies emerge. (See Part 1: Search engines rev up for local realty results and Part 3: Lead management technology grows up.)
The lease on their rented house just outside Washington, D.C., was set to expire in about four weeks. Karla Hicks and boyfriend Rob Brown knew they had to make a decision and make it quickly – renew their lease or buy a house.
Twenty-eight-year-old Hicks went online to browse houses and eventually found a listing on Weichert, Realtors‘ site one weekend afternoon. She filled out an online form to get more information and an agent called her within an hour.
“Literally in the same amount of time I was on the computer, I got a call,” Hicks said.
That same afternoon, the couple went to see the house with the agent, and within two weeks were in the process of buying a two-story townhouse in Arlington, Va.
Consumers like Hicks are increasingly turning to the Internet as a vital link in their home-buying process, making a Web presence vital for real estate professionals who want to capture those tech-savvy consumers. But it’s no longer just individual agents vying for online consumers’ attention – more brokers now want to be part of online lead generation, an area they once shied away from.
“The Internet is just a huge business opportunity,” said Steve Baird, president and CEO of Baird & Warner. “But a lot of brokers were afraid of it. They didn’t want to spend the money.”
That’s changing now, and some brokers have successfully entered online lead generation. Weichert’s lead generation system is just one example of a brokerage capturing leads and doling them out to agents. Other companies such as Baird & Warner and Long & Foster also have online lead generation systems in place, while companies such as Real Living are still developing theirs.
“That really is the future of the business,” said Sherry Chris, president of Real Living Network Services.
Real Living hasn’t yet decided what its system will look like or whether agents will be charged a referral fee for the leads they receive through the network, Chris said. The company has spent the past several months talking with consultants and looking at other companies effectively generating online leads. Putting together such a system is a high priority for next year.
“It’s something we should be doing as a technology-based real estate company,” Chris said, adding that the success of third-party online lead generators such as Lending Tree and HouseValues show there is a market out there.
Still, Real Living is struggling with how to determine a return-on-investment on any such online lead generation system, Chris said. She believes that question is one of the bigger issues brokers face as they implement or upgrade online lead generation, and doubts whether any broker truly knows the ROI of online lead generation.
Bret Violette, president of Weichert Lead Network, would not reveal whether Weichert’s online lead system is generating a profit, but said it has been the right thing for the company, “without a question.” Traffic to Weichert’s Web site has increased more than tenfold in the past two years and the company estimates its lead conversion rate to be 15 to 20 times better than the industry average. Estimates for the industry average range from one in 1,000 to a few percent, Violette said.
Violette attributes the higher rate to Weichert’s approach of handing warm leads to agents rather than simply passing along a consumer’s information.
“If you say great, I’ll have someone give you a call, all your good efforts may have gone out the window because they could be on someone else’s site,” Violette said.
But before that can happen, consumers first need to get to Weichert’s Web site. The brokerage has developed a multimillion-dollar Internet marketing approach that involves driving traffic to the site through search engine optimization, Web advertising and partnerships with other lead generation companies.
Once consumers are at the Weichert site, they can browse the company’s listings and can request more information by submitting their name and number. From there, the company’s 40-employee call center receives the information and calls the consumer usually within minutes, a turnaround that often surprises consumers like Hicks.
“Most of them think you have a camera on them in their house or something,” Violette said.
A computer program decides which agents to call as a call center employee qualifies each lead. A few thousand of Weichert’s 12,000 or so agents are in the online network and the computer determines which ones should be called for each lead by considering factors such as the consumer’s desired location and agents’ track records, Violette said. If the first agent can’t take the call, the computer will dial the next agent in line. The computer can try multiple agents in a short period of time while the call center operator talks with the prospect.
The $10 million-plus technology initiative has resulted in more than 5,000 closed transactions through the lead network in less than two years, Violette said. Agents pay a referral fee for the business.
The call center is open 81 hours per week, from 9 a.m. to 9 p.m. Sunday through Friday and from 9 a.m. to 6 p.m. on Saturdays.
Long & Foster also has a team of employees answering consumer inquiries from 6 a.m. to 10 p.m. weekdays and from 6 a.m. until about 5 p.m. on weekends, said Lisa Amaral, director of e-business. Employees respond via e-mail or the phone depending on what the consumer specifies, and find out how far along they are in the home buying process. If the consumer is a lead worth pursuing, the call center gives the information to one of the brokerage’s trained “e-business” agents. Agents are required to get back to the customer as soon as they get the information, even if that means just making contact and setting up a time to chat later.
Those 400 or so agents all carry wireless BlackBerry devices and have taken training on how to effectively handle online consumers who are generally very tech-savvy and expect immediate responses. Agents pay a referral fee to the brokerage for the business.
Long & Foster’s e-business unit has been around for about three and a half years, Amaral said, and has increased its closed volume 93 percent over last year’s. The company, which uses search engine optimization and other marketing techniques to drive traffic to its Web site, will make the e-business segment even more of a focus in the coming year, she said.
Real estate giant Cendant also is getting in on the action. The Cendant Real Estate Franchise Group recently announced the launch of a lead-management system that captures Web leads from home buyers and sellers and matches the lead with a sales associate.
The LeadRouter system matches the lead information with the most appropriate sales associate according to business rules established by the local broker/owner. By converting data to voice, the system then instantly informs sales associates of the lead via a call to their cell phone. Sales associates can respond to the leads within minutes of receiving the online request.
Chicago-based Baird & Warner uses a call center as well in its online lead generation, but consumers aren’t called right away.
Visitors to the brokerage’s Web site can look at listings – not just the company’s – by signing up for an e-mail service. The system searches the MLS for any properties meeting their criteria and sends those listings to them in an initial report, Baird said. They also can receive updates when new listings come online and can access an area on the Web site to save information to folders.
About 5,000 new registrants sign up each month, and the company culls off some each month leaving it with a net of about 1,000 or 2,000 new consumers a month, Baird said. Currently, about 60,000 consumers are on the list.
Each day, a computer program rates those 60,000 consumers on how active they have been and how likely they are to move forward with the home buying process, Baird said. From there, call center employees start calling those targeted consumers to ask if they’re ready to connect with an agent. If so, the call center then refers the consumer to a Baird & Warner agent part of the lead generation base.
Baird estimates the brokerage will close about 600 transactions this year through the system, which represents about a 20 percent closing rate of the 3,000 leads sent to agents.
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To be part of the system, agents must be “e-agent certified,” an internal designation that means they’re proficient with such things as e-mail and the Web, Baird said. They also must support company programs, close a certain amount of volume and pledge to respond to the leads within two hours of receiving them.
“If you’re not responding to them in a timely fashion, you might as well not bother,” Baird said.
Baird & Warner uses Katabat’s lead management generation and management system, just one of many on the market that are targeting brokers rather than single agents.
Brokers believe that’s a trend to watch for in online lead generation’s future. As more brokers have success in that area, others who had been skeptical will think about joining in. And with the cost of technology and Web advertising rising, brokers say they will be more likely to afford such systems than individual agents.
“To go out and say I’m going to spend money on the Web to capture consumers, boy is that becoming a more daunting task by the day,” Violette said. “It’s almost like saying I’m going to run a TV commercial during the Superbowl.”
Tomorrow: Lead management technology grows up.
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