“Marketing” and “Leads” are words that are thrown around in just about every sphere, every Facebook group, every meeting between agent and mortgage brokers/lenders, and more. But what exactly is marketing?
First, we need to draw a big distinction. There’s a huge difference between marketing and lead generation for things like online stores, versus a service related business like real estate. Let’s be perfectly honest – if someone doesn’t wake up that morning thinking about buying or selling a home, nothing you do or say and no ad you run is going to change that. People buy and sell homes because of life changes.
All too often, people have branded themselves as “experts” and in today’s world, for every expert there is a thousand more. But that leaves agents, brokers, and everyone associated, who just wanted more “leads” in a weird and difficult position. People have a lot of expectations set by “experts” or statistics and averages that mostly come from things like online products as opposed to the service industry you’re in.
So what do people expect from “marketers” or “lead generation companies”?
Well that’s simple…
People expect every lead to be qualified, vetted, and ready to take action today. In fact they expect these leads to want to buy or sell their home within the next 30 days or less, and they expect these leads to be VERY affordable. We’re talking less than $10-$20 per lead… but is that an acceptable reality?
The honest answer.. Maybe… but not likely.
For Sellers, the goal is to get them to know, like and trust you, and then stay top of mind until it’s time for them to sell as opposed to generating a cold lead online that will close in 30 days. For Buyers, it’s much the same but let’s think about it at an absolute minimum.
NAR’s Homebuyer and Seller Survey shows that the average buyer who used the Internet searched for 10 weeks, and the typical buyer who did not use the Internet and went straight to an agent spent 4 weeks. To me, that says there’s at least a 6 week gap (if not much more) between someone starting their search online and giving up their email address, and being ready to work with an agent and close on a home.
So, unless you have a TON of previous data that you can work off of, in your specific market, with the exact clients you’re looking for, and already have a relationship with, it’s going to be VERY difficult to get you the results you want and have a cold lead online turn around within 30 days.
Last month, [CLICK HERE TO READ] I made clear reference to how important it is to not only generate leads for the now, but also to fill up your pipeline for the long term.
So what should you expect?
The national average for leads closing from any medium, whether social media, referral, ZTR, or any source you can find is between 1-3%. So what this means is that over the long term, about 1 year, you should expect to close a minimum of 1 deal for every 100 leads.
Here’s what else you should expect. That if you don’t spend money, over the long term, and have a real advertising budget to carry you through a minimum of 6 months, you will not be able to sustain doing business.
Something else to keep in mind. It really doesn’t matter who you hire, you need to remember this in the back of your head. When you hire a marketer, or you do your own marketing, you need to consider this simple fact.
When a lead is generated, you need to stop believing that someone else should do all the work for you. You need to realize that as a marketer, lead gen specialist, or whatever other “guru” name is out there, their entire job is to generate leads, qualify them to the best of their ability and pass that lead off to you. They are not responsible for how effective you are able to close deals.
Is there a better way?
Of course! Plain and simple know your numbers and have a correct follow up strategy. Know that for every x amount of leads you generate you can expect to close x amount of deals.
Know how much it will cost on a monthly basis to generate the amount of leads necessary for you to close that many deals per month. In the real world, you should plan to have a minimum budget of 6 months of advertising and follow up strategy in place before you even consider spending money on advertising. This will allow you a nice float and help you build both your short and long term strategy in order to develop the business you always wanted.
Most importantly, make sure your follow up game is even stronger than your lead generation! A recent joint study by Keller Williams and Baylor University found that 49% of email leads NEVER receive a response. That’s right – I said NEVER. Beyond which, study after study shows that it’s often the follow up and not lead generation as the cause for not working with that buyer or seller.
Real estate is a long game, and you should not expect results on the first day of running ads and getting leads! While you may sometimes get lucky, that is the exception, not the rule.