A decision announced by Zillow to reinstate unvetted leads to its Premier Agent platform has divided agents, some of whom say conversion rates were too low.
A decision announced Monday by Zillow to reinstate unvetted leads to its Premier Agent platform has divided agents, with some bemoaning allegedly low conversion rates that came with those less-than-solid email leads and others questioning the rationale behind stepping back from the update prematurely.
A fourth iteration of the Premier Agent program, dubbed “PA4,” began rolling out in April before unfurling nationwide, with its most significant update a series of questions sent by Zillow to consumers to distinguish serious homebuyers from window shoppers. A departure from email leads, the screening process was heralded by agents, but on Monday Zillow formally announced the return of those unvetted leads, citing advertiser churn and decreased revenue.
“This blows my mind,” wrote Melanie Coker, the co-founder, chief executive and managing broker of PropertySprocket in a thread on Inman Coast to Coast. “We are having more success with PA4 than we ever have with any Zillow program. The conversion rate for us is running about 30 percent now versus 2 percent before with a fraction of the wasted time and aggravation. I’ll take quality over quantity any day.”
Danny Dietl, the broker-owner of BRIX Real Estate and a Premier Agent customer, called the decision to re-instate unvetted leads premature after only six months, but said it’s too early to tell if it is a good move. Nonetheless, he praised the company’s president of media and marketplace, Greg Schwartz, and offered to give him and Zillow the benefit of the doubt.
“For agents and teams with great follow up it will be valuable,” he said. “For those that aren’t great at follow up it may satisfy their dopamine starved minds in getting ‘more’ leads, but nothing else. This all needs more time to shake out. I’m a big believer in Greg Schwartz so I’m giving them plenty of slack to work this out.”
Jessie Beaudoin, the co-founder and CEO of CallAction, a lead generation automation platform, echoed Dietl’s sentiments.
“I believe the average online lead conversion cycle from inquiries to closings is about four months,” Beaudoin said. “The program is not even four months [old] in most places.”
Beaudoin added, “Without time and volume how can the industry truly determine if this is working?”
Others decried the move in April to nix non-verified leads. David Park, the team leader of The Centurion Group at TTR Sotheby’s International Realty, said his team cut its Zillow spending by 80 percent. Brandon Doyle, an agent with RE/MAX Results, reported that his team cut its spend by 50 percent and will likely cut more if things don’t turn around.
Others leveled praise on Zillow’s leaders for identifying the issue and hearings the concern voiced by agents.
“All part of the process, [Zillow] has to innovate in order to be relevant and to keep investors interested,” said Phil Osborne, co-founder and chief creative officer with Digital Feast, a digital marketing company. “As least they have the balls to try things as long as they can make adjustments quickly and communicate effectively.”
“I do agree with that – there is no doubt [Zillow] has some smart people running the place,” echoed Anthony Lamacchia, a broker-owner of Lamacchia Realty said. “Will be interesting to see how it pans out.”
Part of Zillow’s initial reason for the change in April was due to internal data that showed 49 percent of consumers that inquired on a listing did not hear back from agents. The shift to PA4 was a move that signaled Zillow was also focused on consumer satisfaction — not just the agent.
“In 2017, Zillow Group surveyed consumers who submitted a request for information on a for-sale listing from a Premier Agent to measure how much of a ‘push button, magic happens’ experience we were delivering,” Zillow CEO Spencer Rascoff said, in a letter to investors at the end of the third quarter of 2018.
“Despite years of lead-generation training and software deployment for Premier Agents, consumers reported that they never heard back from a Premier Agent 49 percent of the time,” Rascoff added. “Consumers are not satisfied with that response rate and they hold us responsible. Agents and brokers that ignore half of the home shoppers who reach out via our platforms miss out on transactions and commissions, and put our reputation and long-term viability at risk.”
Sean Riley, an agent with Coldwell Banker Schmidt, took issue with what he believes was a characterization from Zillow implying agents are, “somewhat lazy,” and that the issues with Premier Agent’s connectivity were not solely on the hands on the agent.
“I would argue that the Craigslist syndrome that has taken over the home buying market, has done more harm than good,” Riley said. “Just because one can inquire about a property doesn’t mean they should. I would take a guess that at least 80 percent of the leads I contacted as a result of my paying Zillow (for 3 years) their ransom on my listings, never responded to any of my attempts to assist that lead.”
Now, with the latest changes, Zillow appears to be trying to have the best of both worlds, several agents said.
Rascoff believes the latest changes will pay dividends for investors, and the company is beginning to right the adrift Premier Agent ship.
“We believe that Premier Agent churn will return to normal levels in early 2019,” Rascoff said in the investor letter. “We anticipate that in early 2019, consumer connections received in the second half of 2018 will start converting into transactions and commissions, and the seasonal uptick in traffic and consumer connections at the start of the year will help improve agent receptivity.”