For the last few years, the “buzz” in real estate technology has been websites, online listing inventory and web traffic. Brokers have poured millions of dollars into creating, populating and then revamping their company web sites every year while their agents have likewise reinvented the website-wheel on smaller scales with lesser budgets. Every web consultant across the country extols the need for more hits, more visitors for your web site. Yet throughout this whirlwind of website mania, research studies have shown the barest trickle of online-based profits. Data from trade associations and national franchises put online revenues at a paltry 1-3% of overall business. And while there’s always a story of that “multi-million-dollar” sale some agent somewhere made from their web site, for the 999,999 other REALTORS nationwide, the Holy Grail remains safely hidden in cyberspace.
Why are online revenue results so poor, given the fact that the overall real estate industry has been experiencing a Golden Age these last five years? According to the research, the reason seems clear: While websites have introduced new marketing mechanisms for real estate inventory, they have not been accompanied by similar new practices by the real estate professional. In other words: the marketing technique got better while the brokerage’s operations stayed the same, or got worse. And it all boils down to the most vital of necessary processes: managing the consumer lead.
Whether online or offline, managing leads has always been troublesome for brokers and agents, perhaps more so now in a much sped-up marketplace. As a whole, most brokers have little idea what happens to leads that come into their company. If the lead is received by phone at the front desk, once assigned to an agent its progress and history disappear into the black hole of agent organization. Tracking assigned leads remains sporadic and hopes of regular progress reports are as hard to come by as bodies at weekly office meetings. To their credit, some brokers have resorted to managing company leads in-house, hiring their own sales staff to capture and incubate inquiries. Yet careful cost analysis shows most lead centers to be marginally profitable while consuming large amounts of management time and resources.
Agents – even those who proclaim their undying love for leads – need to take a serious look at their current practices in lead response, incubation, management and conversion. Leads sent directly to an agent via their personal website or voice mail bypass brokerage oversight entirely; without broker knowledge of these leads, company resources are never applied to these inquiries (such as target marketing). Of those agents yet to automate, minimal lead conversion performance can be expected from systems designed around sticky notes. Of agents with laptops, agent feedback shows that the most popularly used functions (Email, MLS, and Solitaire) still do a poor job of contact management and lead incubation. Even those agents with sophisticated contact management software still show mediocre performance in actual follow up activities. And since the brokerage is unaware of the lead, managers cannot coach agents or help improve their soft skill performance. Without a drill sergeant at their backs, agents take the easy road, preferring impersonal postcards rather than phone calls or savvy email construction to attract and capture the consumer’s interest.
But it’s not a blame game, really, when it comes to taking the lead with online leads. Essentially, poor performance abounds at all levels of the industry. Industry studies in recent years show that, even today, less than half of all online leads ever receive a response. Of those leads that do get replies, the average response time is 54 hours, certainly not an inspiring picture of customer service on the web. And with online buyers requiring much longer incubation times – looking at more homes and often needing more handholding than walk-ins – real estate professionals with a “can you buy now, if not call me later” attitude essentially throw money out the window if they have no plan for incubating these online leads, sometimes as long as 24 months.
So what’s it going to take to push up response rates, cut reply times and move the needle from measly conversion percentages to real online revenue? For starters, a few simple ideas could help:
- Treat Email Inquiries like Phone Calls. We’ve all had the experience of a salesperson – perhaps ourselves – taking a phone call anywhere it occurs: in the car, restaurant, restroom, church. If a customer calls, take the call. Well, it’s time for REALTORS to start treating email inquiries with the same amount of urgency. This can be done in a variety of ways, including making someone in the office responsible to check email every 15 minutes, to teaching agents how to use their PDA or cell phone to check their email when out on the road. Given the limited patience level of the online consumer, the early bird will get the worm. If you let online inquiries sit in your email for hours or days, it’s likely the consumer has moved on by the time you’re just hitting “reply.”
- Treat every lead like it counts. Not every online lead will start with “Hi, I have lots of money and I’m ready to buy?” Some leads need a little TLC: they will take time to build a relationship and demonstrate value. You don’t have to send super-snazzy email responses or amazing attachments to capture the consumer. You DO have to act like you care and are interested in the lead, even if it’s not going to immediately pay the bills.
- Have a Plan. Create lead response and incubation plans that you can actually do every day. Don’t create grandiose, multi-tiered never-ending schedules; it’s human nature to just give up on complex strategies. Instead, come up with a simple incubation plan that involves phone calls and easy-to-read emails that recur over a simple period, like every two weeks. For those leads that need time to cook, a simple follow up twice a month is more than enough – but needs to be done – to convert today’s leads when you’re still in business months from now.
- Submit to – or Become – an Authority. If you’re a broker, then create an accountability plan and hold your agents to it. It does not have to be complicated: Ask each agent to list their leads, with start dates, last activity dates and a few notes in a spreadsheet they can send you once a month. Expect the spreadsheet, and call unresponsive agents to task at the next office meeting if they fail to report in. Especially if the leads you are giving out are coming from the company web site (read: company-marketing-dollar-generated) agents should be able to report their activities so you can see progress and measure results. For agents, implementing a lead management plan takes more perseverance than anything else: maintaining momentum every day is a motivational challenge, so submitting to some authority can help. Having your broker coach you and remind you and well, hold you accountable, does wonders for productivity. So come up with a collaborative plan that gives you both what you want: increased conversion of online leads.
It’s ironic, in a way: Ask most agents what they want from their web site and they’ll tell you more hits, more visitors. But the facts would suggest they should ask for just the opposite: Rather than encourage more consumers to inquire at unresponsive, unserious web sites where they end up discouraged, brokers and agents should take a serious look at the traffic – and leads – they already receive, focusing on how to capture and convert more of them today. For every lead left unanswered, for every not-ready-now inquiry deleted not incubated, it’s money left on the table, left behind for those companies who are ready to take the lead in online leads.
This article was authored by Matthew Ferrara of Matthew Ferrara Seminars Inc.
Reprinted with permission of Matthew Ferrara Seminars Inc.