With consumers entering the online housing search earlier than ever before, the amount of Internet leads has increased as a direct result. Capturing and selling these leads has become a big business. However, managing and filtering these leads is no easy task, and without the proper systems in place, agents commonly spend thousands of dollars without seeing a positive return on investment. To filter the increase in online leads, agents must invest a lot of time and money in personnel and systems to filter and track leads.
The explosion of smartphones and mobile apps is fueling the increase in consumer demand for beautiful and easy-to-use search features. With this growth in demand, the real estate industry is not seeing the same growth in homeownership. Actually, quite the opposite: Homeownership is decreasing among Americans households nationwide. Strict lending guidelines and the fact that millennials are buying homes later are two of the main reasons driving a decrease in homeownership.
All of this leads me to believe that an increase in Internet leads and a decrease in homeownership will continue to decrease the quality of Internet leads for the foreseeable future. Consumers are changing behavior as housing search technology becomes easier than ever to use. Using this technology is fun and entertaining; therefore, bringing more people to these portals, but not necessarily meaning people immediately ready to buy or sell a home.
According to comments in my last article on Internet leads, the recurring discussion among agents was that they were able to buy a lot of leads, but the leads were more often poor quality. The average conversion rate was 0.5 percent without any guarantees if an agent could receive 200 leads. Taking the time to call 200 people, follow up, and keep lines of communication open with 200-plus people is unrealistic for most real estate agents every month. With real estate agents telling me that some of the leads they are receiving are coming from “porn sites” and are also being sold to other agents, it does not set up Realtors for success. However, some agents were able to find their niche and find great success with Internet leads.
To find success with with Internet leads, here are three tips:
1. Implement systems and hire help to track leads and follow up
Modern real estate agents cannot afford to do everything on their own. Filtering and following up on leads is a full-time job in this day and age. There is too much noise on the Internet to stay relevant online. It is now a requirement to increase the amount of personal touches with prospects to increase the return on your investment.
2. Understand your customer acquisition cost
Utilizing tools and analytics to understand your business is essential to increase profits and efficiency. Online leads are essentially a numbers game. It is now a requirement to understand your customer acquisition cost to justify your investment in online leads. Understanding this key metric will enable you to budget and plan your time more effectively. The last thing you want to do is follow up on leads that are a lost cause.
3. Follow up with a phone call right away
Following up with leads quicker will increase your chance of converting. A phone call is more personal than an email, and you increase your chance of finding common ground. Finding common ground increases the chance that the prospect will remember you and make it easier for you to follow up. Become a master of following up with information the prospect cares about. Whether that information is the surf report or latest market comps, following up is the key to your success.
Will Caldwell, a San Diego resident, is the CEO and co-founder at Dizzle, a mobile real estate tech company that helps Realtors generate more word-of-mouth leads.