So here we are in 2016 and boy have the times changed. The old school still exists, and with good reason: door knocking, networking, trade shows and referrals are all relevant and efficient ways to generate leads. But if you’re a new agent, good luck building your business with just these methods. The fact is this: online is the present and online is the future. Gone are the days of people using the internet strictly to research or play games; now people buy everything online, from clothes to food to electronics to everything in between. Point being to harness new technology or get left in its dust.
But why is there so much mixed feedback from realtors who have tried online lead generation? Why is it that some agents praise the online lead gen arena, whereas other agents have nothing but horror stories? The reason is this: online lead generation works, but not all agents know how to leverage it. Be prepared for some blunt honesty here: if you’re an agent who has unsuccessfully tried online lead gen and is reading this post, I’m sorry to say, your follow up, or lack thereof, was likely the issue. That’s the bad news. The good news is that you can improve! Any agent can be successful with online leads, but the key is to understand what that success entails. Here are the keys to running a lucrative online lead generation campaign.
Understanding the Numbers
Ok, so the big thing here: numbers. Online lead gen is a science; a science with very concrete equations. So in theory, and in practice, if you understand the numbers, you understand how to be successful. The average real estate agent will only close 1.5-2% of the leads that they’ve generated online. So typically, you’ll close 1 in every 50 leads. Doesn’t seem like much, right? Wrong! Closing at 2% will yield a massive return on investment. For example, if you spend $300 a month and generate leads at roughly $10 a lead, you can gauge and project a return on investment by calculating over the course of a year: $300 a month for 12 months means you’ll spend a total of $3600 ($300×12) for the year. 30 leads a month means you’ll generate roughly 360 (30×12) leads for the year. If you close 2% of these leads, you will close 7 deals for the year. In the GTA, the average commission per deal is floating around 15-20K right now, but let’s say you make only 10K a deal. That means you’ve made 70K on a $3600 spend. That 2% seems a lot bigger now, doesn’t it? This tie’s into my next point.
Having Patience and Perseverance
What I hope is an obvious offshoot to the numbers I’ve quoted above, is the fact that you’ll need to be patient and you’ll need to persevere. If you’re only closing 1 in every 50 leads, you’ll need to have a big picture perspective when you’re following up with them. For example, you may have periods of time where you’ve followed up with lead after lead, and not one of them wants to give you the time of day. But remember, it may be that next lead that shows interest. Maybe you’ve called 49 leads, not one of them bites, but giving up on that 49th lead is what sets apart the success stories from the failures. That 50th lead may be part of the 2% you are looking for. You absolutely have to keep this in mind when you’re doing your follow up. What’s more is that even the leads who do convert will likely take some time to get there. These leads don’t know or trust you yet. You need to win them over. Some of them may bite quickly, but generally speaking, you’ll want to give the lead a time frame of 6-12 months from initial point of contact to seeing them close. That’s not to say that you can’t close sooner, but it’s always best to be prepared for the worst.
Respond within 5 Minutes
The quicker you respond, the hotter the lead is. According to a an insidesales.com study, if you are able to contact a lead within 5 minutes of being notified that they’ve registered and/or requested information, you are 9X more likely to make contact with that lead. Think about this for a second: when you’re in a store and you see something you like, what are the chances of you coming back for it if you don’t buy it immediately? They drastically decrease, right? People make decisions and act impulsively. You need to catch them when they’re hot.
Automate your Lead Follow up System
Regular follow up is the key. This may seem contradictory to the point of responding within 5 minutes, but the points do go hand in hand. Even with the leads who you’ll reach, they usually won’t close immediately, and for the other leads, regular follow up just may win them over with time. Yes, there are general rules of thumb to live by, the 5 minute rule being one of them, but there are always exceptions to the rule. Just because a lead didn’t pick up or respond within the 5 minute timeframe, doesn’t mean they won’t come around over time. It’s not as likely, but it does happen. For the leads who you do contact within that 5 minute time frame, you’ll need to follow up religiously to get that deal. A good follow up system, or CRM, is crucial to that follow up. Drip campaigns, listing match, neighborhood updates, activity tracking, notation and tasks; these are all crucial aspects of your follow up. Optimizing your follow up system will free up your time allowing you to be on the phone more, work in person more, and make more connections. Let the drip campaigns work their magic. Let the automated listings be sent. Let the system send birthday cards, and neighborhood updates, and newsletters etc. Working as a real estate agent is time consuming (preaching to the choir right?), so let automated systems take up as much of that time as you can. This tie’s into my last point:
Get an Assistant
Get a reliable assistant, and train him or her on how to qualify leads and manage your CRM. You’re busy taking buyers to showings, hosting open houses and closing deals. An assistant can handle the majority of the grunt work that ties into the necessary follow up. They can set up the drip campaigns, put in regular calls and emails, be the one to contact leads within 5 minutes of registration etc. Remember that lead gen is an investment, and with the right moving parts, the right attitude and commitment, there is a wealth of return to be made.
Understanding these key points will make your online lead gen journey a successful one. Set a goal in terms of how many deals you’d like to close off your lead gen campaign, and do the numbers. Once you’ve ironed out the math, commit to the follow up and hire the help needed to implement it. Have a strong lead follow up system in play, and give it time. The hardest part of working online leads is simply committing to the work and trusting in the numbers. If you can wrap your head around this, you’ll be in great shape.