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Which real estate marketing or sales channel do you think has the highest return on investment?

Email? Social media? Billboards? Letterbox drops? SEO? There are literally thousands of channels available to real estate agents today to market their brand, listings and reviews compared to the olden days.

The truth is this, there is a standout winner that no other channel can compete with. It’s a channel that’s often forgotten about in the hunt for more leads elsewhere. Can you guess what it is?

It’s referrals.

Referral sales require almost no financial investment, but they bring in very valuable warm leads and the old addage “the best marketing you can do, is doing a good job” still rings true today.

A quick personal story

My wife and I have been searching for an investment property for approximately 12 months. While a few agents personally responded to our enquiries submitted via the portals or their website, some using sophisticated auto-responder email technology etc, the vast majority of our enquiries went unanswered. Given the volume of enquiry that agents have had to deal with throughout the past couple of years, as the market boomed, I guess I just resided to the fact that attending an open inspection was the only way to get a response from an agent about a particular property. So to many open homes we went.

With a noticeable decline in open home numbers and auction clearance rates over the past month, coupled with the feedback from our clients around the country about the state of the market in their local areas, I guess I was expecting somewhat of a return to the ‘olden days’ of when agents would respond to voicemails or email enquiries and follow up with you after an open home.

Last weekend we attended four open homes with an average of 4-8 groups per property – a significant decline from only a few months ago. I enquired about all four properties’ pre-inspection to see if the agent could provide a rental appraisal on the property prior to the inspection. No response. I asked each agent at each inspection again for a rental appraisal. Only one agent could provide an immediate response while the others advised “I’ll have to get back to you” – including two out of four agents who knew that the properties were currently rented and still could not provide a rental estimate, current rent or when the current tenancies were due to expire.

Only one agent followed up with a phone call after the inspection. The agents who said “I’ll have to get back to you” never did. The agent who followed up with us has sold the property with multiple offers being received. After a week, I reached out to the other three agents who advised that the properties were still on the market and no offers had been submitted but was told “we have another open home on Saturday if you’d like another inspection”. After asking once again for a rental appraisal on each call, neither agent could provide one still. Boy, do I feel sorry for their vendors.

Time for a return to basics

Let’s get one thing straight… the market we’ve had for the past two years was not normal. And instead of relying on the technology and marketing tactics that worked during that period, to deal with the sheer volume of buyer enquiry and interest, agents would be wise to start returning to the things that good agents do in every market – doing everything it takes to get a deal over the line.

The best marketing you can do, is doing a good job

As demand starts to decline and the property market cools, just like in every other cooling market we’ve had in the past, some agents will start to blame their technology or marketing for the reason why properties aren’t selling when the reality is that it’s the marketing their not doing that is letting them down.

Vendors don’t care how many people Liked a Facebook ad or how many views a video got on Instagram – especially in a falling market, which is the case in many areas of Australia right now. No amount of money that is thrown at Facebook ads, billboards or DL drops will compensate for ‘the little things’ that make the biggest difference.

I believe referrals are not just a reward for a result. They are the result of an experience. And it’s why referrals are, and always will be, the cheapest form of lead generation and the best-performing marketing channel of all.

What say you? I’d love to hear your thoughts. Leave a comment below.

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