Real estate's a game of 'instant gratification'
By Bernice Ross, Inman News
(This is Part 1 of a two-part series).
A real estate revolution is occurring at this very moment. If you're not making the changes this huge shift requires, you are already losing business to those who have.
No one questions the fact that lead generation is at the heart of the real estate business. As an industry, we spend hundreds of millions on print advertising, Web marketing, radio and television advertising. We consistently generate leads. The challenge is we also consistently throw them away.
For years, we have trained agents how to convert open-house leads, expired listings and for-sale-by-owners. Even with training, only a small proportion of agents consistently convert these leads into closed business. Furthermore, up to 90 percent of the leads generated by print advertising are lost when agents screen incoming ad and sign calls. Moreover, only 2 percent of open-house leads receive follow-up phone calls. IVR systems, call coordinators and virtual assistants provide agents with a way to turn this tide, yet few agents use these proven techniques.
Our performance on the Web is equally abysmal. When agents do respond to e-mail inquiries, 70 percent of the agents take two days to respond and 58 percent do not respond at all. To illustrate this point, a manager in a top-producing office of 120 agents recently sent an e-mail to her agents to see how long it would take them to reply. She sent it out on Thursday and asked the recipients to hit the reply button to show that they had read her e-mail. By the following Tuesday, only 10 percent of her agents had replied. This suggests that only a small percentage of agents are paying close attention to the e-mail leads their company and their own Web sites generate.
The Web environment requires a complete shift of mindset if agents are going to take Web leads and convert them into closed business. Allan Dalton of Realtor.com summed up the problem in a recent issue of Realtor Magazine:
"We are lead-obsessive as an industry, but not inquiry-obsessive."
Dalton's distinction between being "lead-obsessive" vs. being "inquiry-obsessive" is at the heart of what is required to succeed in the 21st Century Web-based real estate environment. For at least 30 years, we have trained agents to focus on lead generation and "right now" business. If the lead is not ready to do business with us within the next two or three months, agents typically move on to someone who is. Because telephone leads and Web inquiries are quite different, applying this 20th century tactic in today's Web-based environment can be quite costly.
When someone picks up the phone and calls an agent, there's a high probability that lead is – or will be – active in the market soon. In contrast, when Web visitors are thinking about moving, they may start the investigative process up to 12 months prior to the time they intend to transact business. They are in "inquiry" mode rather than search mode. Unlike leads who call on a sign and are eager to see property, buyers and sellers making Web inquiries want to remain anonymous. These people want information, but are not yet ready to raise their hand and say, "I'm ready to do business with you." The challenge is how to convert Web inquiries into closed business, especially when you may have to incubate the lead for 12 months or more.
To convert inquiries into signed business, begin by responding to Web and e-mail inquiries immediately. The Web is a place of instant gratification. If the person surfing your site makes an inquiry and you do not respond, you have just thrown away thousands of dollars in potential commissions. Second, if the person surfing your site cannot find what they want, they will continue surfing to other sites until they do. You are literally just a click away from losing potential customers. Third, you must have a strategy to capture the visitor's interest and motivate them to return to your site until they are ready to conduct business. This means a complete shift in your mindset from right-now business to feeding a long-term pipeline of Web leads.
To learn more about how to convert Web inquiries into closed business, see next week's column.
Points of Interest:
- BuyerLink – Target Traffic to Your Website
- Z-Mailer Newsletter Tool
- May 2005 Z-News newsletter
- View Past Newsletters
