Editor’s note: This is the last of a two-part guest perspective focusing on online lead generation. Part 1 explores the difference between a contact and a lead, and Part 2 discusses how to implement a long-term strategy for Internet-generated contacts and leads.
Using the Internet to take a longer-term view on prospecting seems counterintuitive
The Internet is known as a real-time, get-the-information-fast and make-it-happen-now medium. It clearly is a mechanism for doing so. However, home sellers take an average nine months to research and ponder issues surrounding the sale of their homes before listing and selling their properties, according to an independent study by Hebert Research of Bellevue, Wash. (commissioned by HouseValues.com). Sellers conduct preliminary research for 5.5 months, active research for 1.4 months, and take 2.4 months actually selling the home. Conversely, the study says that buyers take nearly 17 months from the time they first contemplate purchasing a home before they make a purchase. Buyers conduct preliminary research for 7.1 months, active research for 5.5 months, and spend 4.1 months finding, negotiating and closing the purchase.
In traditional real estate prospecting, agents tend to focus on listing and buyer representation prospects during the “selling” and “buying” phases identified in the Hebert Research report, that is, the three-month period for sellers, and the four-month period for buyers. Agents tend to focus on these two areas because: 1) as commission-only salespeople, agents must focus on the short term, and 2) prior to the Internet, it was very difficult to identify prospects in the “pre” and “active” stages of real estate research. While the Internet hasn’t done much to change the agent’s compensation plan, it has significantly increased the likelihood that an agent can both identify and engage a potential prospect in the “pre” and “active” research stage. But this is where technology and historic industry culture tend to clash.
So, how can agents change their short-term focus to engage more prospects earlier in the sales cycle? The answer is to embrace change intelligently and to reduce the pain associated with such change.
Agent focus in a new market
Agents need to ask the right questions of agent referral network providers, recognize the value of a good contact and convert good contacts to leads at the appropriate time. For example, ask a referral network sales representative the following: Who is considered a lead — anyone entering data in your system’s Web site while viewing properties? Or, are leads those who request more detailed property information or agent assistance? Are a given referral network providers’ contacts pre-qualified? If so, what does that process entail? What questions are asked of the Web site visitor?
Besides qualifying the contacts provided, agents should probe further to understand how the contacts are distributed to the referral providers’ subscribers. Are leads distributed simultaneously to multiple agent subscribers, who then compete for the given contact’s business? Are they considered exclusive to one agent subscriber per geographic territory, such as a ZIP code? If so, is there a time-sensitive component to the exclusivity?
Many referral network providers recognize that Internet searchers are impatient; studies show that someone must contact them quickly to convert them to a qualified lead. This is true even if the contact is engaged early in the sales cycle as described above. In 2005, more than 70 percent of consumers used the Internet before making a real estate decision, and half of those concluded business with the first agent with whom they made contact, according to the National Association of Realtors. As such, many contacts are exclusive for specific periods of time, and will be sent to another agent if the first agent does not respond within a given timeframe.
Internet and real estate referral network providers are now an established and recognized source of new business in residential real estate. Now it is up to agents to convert contacts to leads, leads to clients and clients to revenue-generating transactions. One possible first step is for agents to subscribe to quality e-commerce real estate referral programs, and manage their “lead” expectations.
Kyle Cascioli is an adjunct professor of real estate in the Burns School of Real Estate, part of the Daniels College of Business at the University of Denver. He is also manager of Real Estate Services at HomePoint.com, which provides vendor, marketing and agent-referral services in selected markets across the United States. Cascioli is also the broker-owner of Barrett Associates.