Finding the Best Leads
To someone who makes a living in sales — any kind of sales — finding the best leads is the most important thing to their success. And it is particularly important if you make a living practicing real estate during a very tough economy. It’s more important than being good with customers. It’s more important than being knowledgeable about real estate. It’s more important than working hard for long hours, although all of those are important.
Why is finding the best leads so important? Because you can be the very best agent in the industry, but if you don’t have customers, you’re out of business. You can be willing to work long hours, but if you have nobody to work with, you are out of business. On the other hand, you can be a mediocre agent that’s too lazy to work hard, and still make a lot of money in real estate… if you have the best leads. (I don’t recommend that model, but I’ve seen it happen more than once!)
“Okay Matt… I’m interested. So how do I find the best leads? Better yet, what are the best leads?” Now we’re getting to the heart of the issue. First, let’s define “best leads”. The best leads are the ones that result in closings, wouldn’t you agree? But the fact is that all leads are not those “best leads” — the ones that close.
In fact, statistically speaking, only one in twenty-four real estate leads will actually result in a closing. In other words, finding real estate leads is much like eating ribs: lots of work and lots of mess for a single bite of great food! The work is hard, but the payoff is great! So let’s look at that sad fact for a minute. There are basically two schools of thought when it comes to generating business in your real estate practice.
School of Thought 1: Turning Bad Leads into Good Leads. For about the last decade there has been a steady shift in our industry. Real estate is still the same. Our customers are still the same. What’s changed is their shopping habits, and with it the way we have to market our services in order to attract our share of business.
Unfortunately, many of us are reluctant to change so we continue to do the same things we’ve always done to attract our clients. The results of using those same marketing strategies, however, have steadily gone from great, to good, to not-too-good, to pretty bad, to very bad. Maybe this is not your experience, but it is the experience of many agents practicing today.
And because those old methods of attracting clients are yielding fewer and fewer leads, there is a natural tendency to try to somehow turn those few “suspects” into prospects. It is the natural progression when leads are few and far between — leads are scarce so we must try to rehabilitate each one. My grandfather used to refer to this as “trying to turn chicken manure into chicken salad”. Now I don’t know about you, but that doesn’t sound like any chicken salad I want to eat!
School of Thought 2: Make Plenty of Leads and Flush the Bad Ones. Another school of thought is to generate many more leads than you need and rapidly eliminate the lower quality leads. Like the old Doritos commercial said, “eat all you want, we’ll make more”, I say “flush all you want, and just make more”. But for many agents today that is easier said than done.
For those agents who are using their old marketing methods to generate business they don’t have the luxury of discarding leads. Over 90% of today’s agents are relying on circle of influence marketing, open houses, print advertising, and referrals for their customers, and for those agents, there are just too few leads produced to allow them to “flush” any bad ones. The reason is really simple if you think about it.
Imagine you’re fishing. Where is the best spot to fish? Duh! It’s where the fish are biting. The latest research from the National Association of Realtors® says that 93% of all of today’s real estate customers are now beginning their search online. The funny thing is that over 90% of today’s agents are still looking for customers where the other 7% are “biting”. That explains why there is such a shortage of business for those agents.
The other ten percent of today’s agents are getting to divide up 93% of the business while the remaining 7% (the offline business) is being divvied up by those other 90% of the agents. In other words, if we want to be successful at fishing we need to go where the fish are biting, whether we are comfortable there or not. And if the fish are biting online, then that’s where our marketing must be if we want to be successful.
That does not mean we simply need to have a website. The fact is that most of agents who comprise that 90% already have websites. What they need is a way to capture customers from their websites and that’s something else altogether. That’s totally different. Most real estate websites don’t have an effective LCM or “lead capture module” at all, resulting in little to no business coming from the website. In fact, most agents have a website already but did no business from that website last year.
On the other hand, if that website has an effective LCM, it can capture the name, phone number, and email address of between a fourth and a third of the site’s visitors, or about 30 times as many leads as a typical real estate website. And with effective lead capture technology on the website the agent is now able to bring in many more opportunities, and that allows him or her to toss the bad leads and only work with the good ones.
According to NAR, only a very few agents do much of their business from online sources, but for those agents who do, their results are phenomenal. They bring in lots of leads — the good, the bad, and the ugly — but the difference is that they have the option of flushing the poor leads because they’ve generated so many leads to begin with.
If you find yourself trying to turn bad leads into good ones, I want you to take a step back and see if the reason is because you have a shortage of leads. If you do, today is the day to fix that. You can be like those agents who’ve cracked the online business. You can add your own LCM technology and immediately have more opportunities than you can handle on the first day. Skeptical? Then try it. Check out LCM technology today and tomorrow you can start flushing the bad ones.
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Matt Jones is the founder and CEO of FavoriteAgent.com, nationally syndicated columnist, broker, and best selling author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, The Science of Online Marketing, 10 Steps to Real Estate Success, 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask, The Virtual Office Model, Max-Bang!, and The NEW Ultimate Listing Presentation. Jones' North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN's Pulse on America claimed FavoriteAgent.com is "changing the way real estate is being done in America." This article is syndicated in the following locations: iTunes, YouTube, Stitcher Radio, BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, RevampedAgent.com, and now Amazon Kindle.