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“The main thing you always want, every day, is listing leads.”Chris Hanly OAM, First National Byron Bay

Real estate agents are always looking for leads. And so they should be.

However, many agents fail at lead generation because they don’t have a plan or they don’t know how to effectively implement their plan. Notwithstanding the volume of leads that are generated for agents by their internal marketing teams and suppliers that never actually get followed up.

So does our beloved real estate industry have a problem with lead generation, lead conversion, or both?

First, let’s understand the difference between lead generation vs. lead conversion.

  • Lead generation is the process of converting website visitors and social media followers etc into leads by persuading them to give you their contact details.
  • Lead conversion is the act of turning that enquiry into a listing appointment.

Some might argue that the definition of a ‘conversion’ is the moment a listing agreement is signed or an offer is submitted and I agree that this is the ultimate measure of prospecting success. But we’re going to assume for a moment, and I’m sure many agents reading this will agree, that most agents have a good conversion rate from ‘appointment to list’ and so in this article, we’ll look instead at the broader digital marketing ecosystem and the state of lead generation and lead conversion from digital platforms specifically.

Targeting The Agent Commission Pool

Third-party lead generators are not new. Sites like localagentfinder.com.au and openagent.com.au have been around for a while now, offering leads to agents for a fee. In 2018, a report was commissioned by a large global investment banking firm, looking into the opportunity for our major portals to enter the vendor lead generation space.

The research paper cautioned that, should they proceed, the major portals would be “crossing a significant boundary”, as “they will be targeting the agent commission pool for the first time”. The appetite from various players to target the agent commission pool, by going after vendor leads, was starting to heat up.

Also in 2018, realestate.com.au announced the launch of Agent Match – a lead generation service whereby realestate.com.au would supply vendor leads to agents for a fee.

realestate.com.au said at the time “The service is free for the first 12 months, after which it will be low-cost, with fees ranging from $0-$200. Agent Match will never take a percentage of an agent’s commission… Agent Match is our next step in delivering a digital experience that takes the hard work out of lead prospecting and connects agents with homeowners who are ready to sell.” – source

The program was met swiftly with criticism from real estate agents and business owners and the program was eventually repackaged and rebranded as ‘Seller Leads’ as it failed to gain traction among industry professionals.

As the pandemic hit, the discussion around selling vendor leads to agents died down but it would be naive to think that our major property portals and other digital platforms aren’t already planning their next move into this space.

A healthy level of scepticism

Agents today are quite rightly sceptical about the quality or genuine nature of leads from third-party platforms but this is also fueling their scepticism about the quality and genuine nature of leads generated via their own platforms i.e. their website and social media channels.

Put simply, many agents only trust a small number of lead sources and it’s why I believe the major property portals and other lead generators will always struggle to obtain significant adoption of any vendor lead generation type service.

Let’s consider this in terms of a perceived ‘lead source importance’ in the mind of a real estate agent (from most trusted to least trusted):

  1. Referrals from clients, friends, colleagues, neighbours etc
  2. Leads that are generated by me, by myself (social media, signboards, DL cards etc)
  3. Leads that are generated by my internal marketing team
  4. Leads that come from a third-party platform i.e. the major portals, lead generator or social media “guru”

Great agents will always follow up on any and all lead opportunities that come their way but the reality is that many agents will quickly return a call to a referral from a client, friend or colleague while blatantly ignoring a lead from some third-party website – even if that website is their own.

I’ve been in many meetings with marketing managers and agents of some of the most advanced real estate businesses in the country where the marketing team are presenting the results of a recent vendor lead generation campaign, only for their agents to tell them “I didn’t think that vendor lead from our website was legit” – basically admitting they didn’t follow up on the opportunity.

We’ve seen big businesses invest many tens of thousands of dollars in digital vendor lead generation campaigns which have produced hundreds of genuine vendor leads for their agents only to find afterwards that dozens of addresses submitted during the campaign have been listed (or sold) with other agents because their agents didn’t pick up the phone and call the people who submitted their information in return for an appraisal or property estimate.

A ‘normal’ market always separates the good from the great

For the last few years, agents have ridden the crest of a golden wave in real estate’s history and unless an agent has had the technology and people resources in place to handle the sheer volume of enquiry they received, the reality is that many buyer and vendor enquiries simply went unanswered. This won’t fly in a ‘normal’ market.

Let’s be clear, the last few years have not been ‘normal’.

As we move into a market where listings and buyers are both harder to come by, some agents will blame their digital tools and technology for the reason they’re not listing and selling as many properties when in fact it’s more likely their unwillingness to prospect for leads the old-fashioned way – including following up on leads that are generated by their own internal marketing teams – that is to blame for a lack of results.

Great agents look forward to a ‘normal’ market while some agents will choose to leave the industry altogether. It happened during the GFC and no doubt it will happen if and when the market turns.

It’s on agents to trust their marketing teams when they say “these are genuine leads from our website… call them!” but it’s also on all service providers, in partnership with the marketing teams within real estate businesses, to help show agents the value in their own database, website and social channels – and develop communication strategies to follow up on every possible lead. There is gold in your own channels.

And don’t buy vendor leads from third-party platforms… period. Chances are, you probably already had that contact in your CRM anyway and did nothing with it. Fix that problem first.

In closing…

Does real estate have a lead generation problem? I don’t believe so. There is no shortage of leads being generated by the efforts of agents, their own internal marketing teams and the technology that integrates with their own internal systems i.e. CRM.

But do we have a lead conversion problem? Absolutely. A big one. And it’s caused largely by agents’ distrust in leads that aren’t generated by them, themselves, and only them – coupled with a lack of follow-up and follow-through on every lead that is received.

‘Smartphones’ is a bit of a misnomer. Because in real estate, sometimes, the least used function is actually the phone function. This isn’t the case for all agents, of course, but with all of the proptech available today, we mustn’t forget that the phone is still, in our opinion, the best marketing channel going around. Everything else just helps get us to that phone call.

Agree? Or disagree? Leave a comment below. I’d love to know what you think.

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