No matter what you do, there is no magic pill when it comes to old-school versus new-school prospecting methods. New opportunities truly arise out of a diversity of marketing techniques.
Cara Ameer, a top-producing broker associate from Northeast Florida, writes about working with buyers and sellers, sticky situations and real estate marketing in her regular Inman column that publishes every other Wednesday.
In today’s high tech world, how important are traditional methods of lead generation such as open houses, face-to-face visits, client gatherings and old fashioned note writing?
After all, there’s a growing collection of tools from the disciplines of artificial intelligence, predictive analytics and lead generation platforms hankering for agent attention (along with our hard-earned dollars)!
With intense competition for the consumer in the attention economy, is it better to go where all the eyeballs are — online, back to basics or somewhere in between? And why chase strangers when you can nurture and cultivate friends and their referrals?
To get an idea of real world experiences, I talked to agents around the country — and solicited feedback from the Inman Coast to Coast Facebook Group of course! My query sparked off a lively discussion imbued with strong feelings.
The bottom line is that no matter what you do, there is no magic pill when it comes to old school versus new school methods, and new opportunities truly arise out of a diversity of marketing techniques.
In some cases, agents working online leads had more to say versus those who had success with traditional methods. While buying leads isn’t exactly “new school” and has long been an option to agents looking to increase their business, there is a degree of mystery with capturing and incubating them: There are endless discussions online between agents on how to better engage with them.
It’s easy to think that the most successful agents have a pipeline or an “in” to a never-ending stream of business.
Perhaps your leads consistently flow from one source or another, such as listing new construction, a company continually relocating buyers to an area, or as was the case in the distressed real estate market days, the foreclosure faucet was turned on full blast and agents that worked this sector of the market had an abundance of new listings each week.
For many agents, their business entails doing a little bit of everything. That means toggling between more traditional methods and supplementing their business with some sort of online lead generation.
The upsides and downsides of lead generation
Leads can often provide an immediate sense of activity, though the buyer or seller may not be doing something with the urgency that was initially communicated. They certainly can provide an opportunity to connect with people you may not have otherwise met, and can open a window to additional revenue streams and referrals from those you’ve converted.
But, like anything, success takes time and can be hit and miss, which is why some agents prefer to keep a mix of old school methods going.
Different agents have their different preferences, and each preference has its pros and cons you have to sit back and consistently evaluate.
There are many agents who swear by building their business through personal referrals — client appreciation/gratitude events, small group dinners, neighborhood gatherings and staying in touch with their sphere through regular contact and outreach, whether that is personal follow-up and interaction (coffee or lunch meetings) as well as sending out regular communications — newsletters, personal notes and so forth.
Referrals from spheres of influence can go in waves, as sometimes it seems as if everyone you sold a home to within the last five years has suddenly relocated out of the area entirely, or is firmly staying put due to rising housing prices in the area.
Other times it seems as if every person you’ve ever helped is your greatest evangelizer as they text you to let you know they’ve passed on your name to every person they’ve encountered who is moving.
Other agents swear by leads, and are religiously focused on working with them, either by themselves (which can be quite time consuming and requires full on focus 24/7) or through the help of an assistant or one or more Inside Sales Agents (ISAs) depending on the amount of leads being purchased. No doubt, having someone that is tirelessly responding, scrubbing and incubating these leads is a full time job.
One slip, or a crazy week or two of not responding with immediacy, following up or staying in touch as fast as needed will result in lost business. This is especially true because most lead subscriptions for certain areas or zip codes don’t just go to one or two agents, but a large pool of them. How many is not something the most popular lead platforms will likely ever share, but they love to reel agents in with a serious cases of FOMO.
The experience of chasing new leads can almost become like a drug. It’s easy to get addicted to them pouring in daily and getting excited over the initial high that comes from a new prospect, but the sense of productivity is often illusory.
After a while, you realize that you’ve spent half the day responding to new queries, running down information to haphazard questions, yet you have no idea if they will actually work with you, yet you still have your existing clients to take care of. Despite all of this, you love the thrill of the chase, and keep wanting more.
As you run after each lead and strive to be faster with each communication and dash out to show the lead the property they wanted to see (as well as others) just so you can get face to face with them, you crash and burn as this continual cycle of fire drills exhausts you.
You mentally range somewhere between love and hate with these leads and swear you aren’t going to do it anymore, but the text comes through and there you go again.
There are just as many agents that have tried working with leads only to find the exercise unproductive, time consuming, expensive and finally mustered the courage to cut the cord. But just because they opted not to pursue this route does not mean that agents are working leads the wrong way.
Instead, they often discover that consumers are often confused as to why they are being contacted by numerous agents at the same time, none of whom are likely the listing agent (when that is who the buyer ultimately wants to deal with); leads often fail to respond to any method of communication; often the wrong contact information is in the database and then once contacted, many of them are already working with an agent. Loyalty can also be very hard to cultivated for this sector of buyers and sellers who may lean more towards “DIY” no matter how helpful or hard working an agent is.
Buying leads can also be expensive. Many of the numbers shared by agents are on the level of a monthly mortgage or rent payment, often multiplied tenfold. Based on my research for this article, agent spending on leads ranges from $1,500-$2,200 a month upwards to $30K to $60K a month. I don’t doubt there are others out there spending even more depending on how many areas they want to cover. Large teams invest heavily in leads as they need it to feed their buyer agent train and ultimately “pump up the volume”.
Nevertheless, investing in leads is serious business and not for the faint of heart. In order for it to pay huge dividends, it is a “go big or go home” approach, as it is a numbers game and the more at bats, the more chances of conversion.
Whether focusing exclusively on your sphere, working with leads or somewhere in between, structure and discipline are key.
Agents still need a good customer relationship management (CRM) system and depending on the volume of business they are handling, an assistant or buyer’s agent or two to be available to assist with responding and servicing “warm” or “cold” leads as they come in.
Other avenues for leads
As far as lead generation goes, buying leads is not the only answer. Agents may elect to participate in their brokerage’s relocation or lead program (if they have one), but instead of paying monthly fees for leads, they will have a referral fee due at closing. There is always a price to pay for found business whether a consumer or company generated platform. An agent must decide for themselves if the monthly outlay is worth it, or if getting a reduced commission as a result of paying a referral fee is worth it.
Agents without big budgets can engage in low cost activities that blend traditional and more modern methods such as hosting open houses (boosted by social media engagement to promote the event), going door-to-door and volunteering at community events, which can be a great way to meet people while working for a good cause (while sharing the experience on social media).
Social media is a great way to experiment with reaching different audiences based on the kind of content you are creating. Business in general — and especially real estate — has never had such a powerful and cost effective platform to raise awareness, engage and start a conversation. Shooting your own video from your cell phone or camera doesn’t cost anything, and you can easily and quickly create as many videos as you like.
These activities keep you out front and provide a way to interact with a broad range of people, but these too are building blocks for the long term. You may have to post for awhile before seeing any tangible results, but they key is to keep going and not be afraid to experiment. But be mindful of your audience, your geography, and its socio-economic sensitivities. Keep things tasteful.
What works better for one agent may be different from another as everyone’s sphere’s, personalities, interests and talents differ. Geographic differences as well as innate differences in various real estate markets also influence what may work better depending on where in the country you are located.
Areas with a lot of new construction, resale choices and more affordability versus lower inventory, higher priced markets also influence the kind of approaches agents take to generating business. In some markets, it may be easier to find buyers homes, yet in other markets it may take longer to sell a property due to a large amount of supply in the area. All of those factors will impact how an agent goes about their lead generation.
The industry is being challenged and disrupted like never before. There will always be the next big thing or another shiny object that will claim to disrupt how the consumer engages and interacts with agents.
When you think about it, every lead starts out as a stranger and they are converted into a valued client. The agent builds and nurtures the relationship, and along the way they become part of that agent’s sphere.
Whether they met them at an open house, they were a sign call, an internet lead, a prospect generated from social media, a referral from another client or an appreciation event, the famous quote widely attributed to the Irish poet William Butler Yeats holds true — “there are no strangers here, only friends you haven’t met.”