Editor’s note: In this three-part series, Inman News looks at how the changing market is impacting lead generation, how agents are competing for top spots on Google, and how the lending industry faces increased criticism of its use of trigger lists. (Read Part 2, “Google as a lead strategy,” and Part 3, “Consumers, lawmakers take issue with trigger lists.”)
Home sales are slumping and prices are fickle or falling in many markets across the country. There are fewer transactions to go around, and that means less money in agents’ pockets and more urgency to make marketing decisions as competition heats up to reach the serious buyers and sellers.
But opportunities abound even in a struggling real estate market, say officials at online real estate marketing companies, and this downturn can be the right time for agents to specialize in a market niche and to expand their focus to those prospective clients who may not be ready for a sale or purchase in the near future. Agents’ business survival may depend on it.
Some expect the real estate slump to accelerate the flight of marketing dollars from print media to online sites, as agents may find cost savings, better metrics and a larger audience on the Web, and curbing your marketing presence could be a bad strategy to weather the real estate downturn and keep the leads pouring in.
“In slowing markets we are finding we have a lot more people marketing their listings online — because they have to,” said Brendan King, chief operating officer for Point2, a company that offers online marketing tools and services for real estate professionals through its Point2 National Listing Service site. “They do a lot less promotion in booming markets.” In booming markets, it may not take as much promotion to get the phone to ring.
But that doesn’t mean agents need to be overly aggressive in grabbing consumers’ contact information wherever and however they can. King suggested the reverse may be true. Providing rich information while allowing consumers to choose when and if to offer up their personal information can be the key to the most productive online leads, King said.
Company research found that consumers respond well to lots of property photos — the more the better, he said. And, “In my opinion the way to sort out the good leads from the bad is simply to quit making the bad leads. How do you do that? Don’t make people register to see data. Give them rich data — they will ask good questions if they are interested and become high-quality leads. When they do ask questions make sure you have the ability to respond immediately.”
And it’s a good idea to be where the consumers are, he said. “I say put the data out there in the places that people are looking, track the analytics, build a model based on their online activity and then give them information about what the model tells you they are interested in.”
A weakened market is new to a lot of real estate professionals — many agents and brokers joined the industry during one of the longest real estate run-ups on record, said Rusty Lindquist, vice president of agent and broker products for a la mode, a real estate technology company that builds Web sites and offers lead capture and conversion tools for real estate professionals.
“Until just recently the need to market has not been there,” he said. “People have to market now. Especially as the supply (of transactions) out there begins to dwindle, you are left with a few options to really differentiate yourself from the competition.” Those professionals who “refuse to market, don’t understand how to do it or simply don’t move quickly enough” may find themselves at the back of the pack, he said.
The cost of marketing can be like the “chicken and the egg” proposition, he said, as agents need to earn money to spend money on marketing. Lindquist’s recommendation is for agents to start small and save a portion of any commission income to spend on marketing.
He also recommended that agents pay for specialized keyword marketing on search engines “that is really niche-based or very localized. (This) can be very affordable,” he said.
It’s not enough anymore for agents and brokers just to have a Web presence, he said. “In the boom days it was enough to simply have listings on a Web site. Now you have to be engaging, the Web site has to be engaging.”
It’s also important to work to cultivate any and all leads these days — not just the ones that will transact the soonest, he said. When the market was flooded with leads during the real estate boom, “It just wasn’t compelling … to spend a lot of time working those leads that were just starting out. At that time agents were really able to pick and choose the hottest leads.
“They didn’t have a lot of this notion of lead cultivation. They were able to say, ‘If you’re a tire kicker, get a hold of me when you’re really ready to transact.’ Now all of the sudden there is this need to really change our mindset and look at people who come into contact with us as future clients,” Lindquist said. “The Internet has enabled consumers to get involved earlier. Agents need to learn how to capitalize on this earlier involvement.”
The industry is becoming more interested in Web-user statistics and in trying to identify what individual users are seeking, he said. Web sites are evolving in complexity, he said, and are segmented for different types of visitors and include follow-up systems that send varied information to clients and prospective clients based on their specific interests and stage in the buying or selling process.
Marketing property information in a variety of Web locations can help to provide better exposure and traffic for those listings, he said. “It’s something I think every agent should be doing,” Lindquist said, as the agents who don’t provide maximum exposure may find themselves at a disadvantage in consumers’ eyes. Savvy agents are paying attention to the return on investment for various lead sources to gauge the effectiveness of each marketing effort, he said.
“If your (online) traffic is going down, you really need to reconsider the amount of advertising you do or consider refining the advertising you do,” he said.
Prospect management, the ability to manage leads at various stages of readiness to transact, is “a foundation of every successful real estate practice today,” said Matt Heinz, senior director of marketing for HouseValues Inc., an online real estate marketing company. Agents are definitely moving toward building longer-term relationships with prospective clients who are not presently engaged in a transaction, he said.
Those agents who decide to boost their marketing efforts during a dry spell in the market may find that “they’re going to be set up for growing success for years to come,” he said.
“Keep the consumer in control — let the consumer control their timetable,” he said. Agents know, he added, “that every prospect is a good lead,” and consumer behavior is still pretty much the same in a buyer’s market or seller’s market.
Tracie Mason, a real estate agent for RE/MAX Metro Realty Inc. in Seattle who formerly worked as an agent coach and trainer at HouseValues, said she pays for leads and also generates her own leads through her Web sites.
Her online marketing has become more focused, she said, to specific neighborhoods and architectural styles, and she plans to set up about 10 new niche-based Web sites. Any lead is a potentially fruitful lead, she said, and it’s best for agents not to dismiss a lead just because the consumer provides less information or seems less eager to transact. For the long-term prospects, she said she uses “a very soft touch to see what they’re looking for — nothing hard sell. If I call them twisting arms there’s no way they’re going to work with me when they’re ready.”
She said it’s good for agents to experiment with various lead sources — and to stick with the ones that work and ditch the ones that don’t. Mason said she has advertised at Zillow.com. “That’s where consumers go. If consumers go there anyway and are out there looking for information, if I’m not there contributing information I’m going to get left out,” she said.
While the real estate market may be slowing, there is still a lot of activity in the online real estate space, said Kelly Roark, vice president of industry development for real estate search site Trulia. Real estate sites’ delivering online leads to real estate professionals has a lot to do with unique content, she said. Those companies that can better educate consumers about the real estate market — and educate real estate professionals about those consumers — may be ahead of the game, she said.
“Brokers continue to want to know more about the consumer and they want more unique content. It comes down to, ‘Are you just going to pump in tons of volume, or deliver people who have self-qualified themselves?’ ” she said.
There is value in reaching out to consumers at all stages of a transaction, she added, and to provide an online destination “for window shoppers to spend time before they make contact — it’s actually broadening the funnel and allowing more people to reach out to them.”
Those real estate companies that elevate their online marketing effort as more of a business entity than a simple tool may be best equipped to meet online consumers, she said.
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