- Opcity's performance-based, agent-matching tech and referral-fee pricing model set it apart.
Want to waste money? Try buying leads and taking your sweet time to contact them.
Slow response time is one of the main reasons many agents see a poor return on investment (ROI) from lead-generation products.
To solve this problem, lead-conversion and “nurturing” services are gaining traction in the industry.
Announcing a $27 million Series A funding round, Austin, Texas-based Opcity has vaulted to the forefront of this niche.
The startup qualifies and matches leads with agents on behalf of large brokerages. Its performance-based, agent-matching technology and referral-fee pricing model set the company apart from some competitors.
Other human-operated lead-response services include Riley, which specializes in text messages, Lead Connect 365 and Zillow Group’s Premier Agent Concierge.
Rapid growth and a veteran founder
Opcity, which launched in late in 2015, reports working with 350 brokerages representing 4,000 agents across more than 50 markets in seven states.
Rapid growth is one reason the startup was able to nab so much funding. Another is the highly relevant experience of its founder, Ben Rubenstein.
He spent more than 10 years building Yodle, an online marketing service, and sold the company for $342 million to Web.com Group last year.
Lead generation and qualification
Opcity offers two products.
The first gets brokerages new leads and lead handoffs. For this product, the company does not charge any upfront fees; it only collects a typical referral fee when a lead converts into a transaction.
Opcity generates its own leads mostly by advertising on listing portals, including realtor.com and Homes.com. (Opcity said in an email that, “We would like to call out that we do not work with Zillow or Trulia.”)
Opcity’s second product only includes its lead qualification and handoff service. With this offering, Opcity only processes leads generated by the brokerage (not by Opcity itself), charging a monthly subscription fee — which works out to around $10 to $12 per ingested lead — in addition to referral fees.
When Opcity receives a lead, either through its own advertising or from a brokerage, a call center representative will usually call the lead within 60 seconds to gather intel on the lead’s buying time frame, whether he or she is working with another agent and if relocation is a factor.
Comparing a one out of 10 conversion rate
State laws restrict what unlicensed assistants are allowed to discuss with prospective homebuyers and sellers, so Opcity’s representatives ask only basic questions.
“We’re one step above receptionists,” he said.
But even by asking the most basic questions, Opcity is able to weed out many unqualified leads. Only one out of three leads is handed off to a real estate agent. The remainder are targeted with a long-term marketing campaign designed to nurture them until they’re transaction-ready.
The typical agent converts around one out of 10 Opcity-vetted leads into closings. That may sound low, but it blows away the industry average, Rubenstein said.
Matching leads with agents
If a lead passes muster, the call center rep will inquire about appointment availability and fire out invitations to three or four agents to claim the lead, spaced at 10-second intervals.
The agents receive the notifications through Opcity’s mobile app and the first to accept the lead receives a call from the rep explaining potential appointment times and basic lead info. Then the agent is transferred to a live call to the lead.
A merit-based system
Part of what differentiates Opcity is that the company makes calculated matches between agents and consumers, according to Rubenstein.
At first, Opcity pairs leads with agents based mostly on where those agents have closed the most deals. But over time, it can base matches increasingly on an agent’s success with past leads from Opcity.
To collect this second set of data, Opcity consistently sends agents reminders to update the status of leads in Opcity’s customer relationship management system (CRM).
Agents who build a track record of turning leads into deals get more leads, while those who fail to convert will receive fewer and fewer opportunities.
“The agents who are actively engaging with our platform and pushing through people to close, we give them the referrals,” Rubenstein said.
He added that Opcity’s lead-tracking CRM provides “the broker with a great toolkit to understand what’s happening at a high level in their brokerage.”
This resource includes analytics that can help with coaching agents and reveal the ROI of different types of marketing.
‘Deep industry roots’
Opcity holds a broker license in Texas, but it doesn’t have any on-the-ground agents or work directly with consumers to buy or sell properties.
The broker license allows the company to collect referral fees from other brokers, while also providing “credibility,” data access and the potential to join MLSs, said Michael Lam, Opcity’s other co-founder.
Opcity currently doesn’t belong to any MLSs.
For a broker to qualify for membership to an MLS operated by a Realtor association, a broker must “actively endeavor” “to list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation made by listing brokers or agents in the MLS,” according to the National Association of Realtors’ (NAR) MLS handbook.
Opcity is modeled partly on lead-generation and qualification techniques developed by Texas brokerage HomeCity. HomeCity owns a stake in Opcity and is also one of the startup’s customers.
HomeCity’s founder, David Rubin, worked with Rubenstein at Yodle and sits on Opcity’s board.
“We partnered with HomeCity to scale its dataset and build our solution based on learnings from deep industry roots,” Lam said.