October 14, 2020
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Real Estate Leads have become so ubiquitous that it seems like every other day Real Estate Agents are being lured toward the latest greatest silver bullet in lead generation.
“Zillow is the best”
“Google Ads are the #1 lead source”
“Facebook lead ads are the cheapest”
You couldn’t avoid internet leads if you wanted to.
With tech companies, brokerages and your local lender all offering “free” leads the value of real estate leads has been driven way down.
With many “Gurus” promising to teach you how to generate Real Estate leads for less than a dollar, your options for where to get your leads has continually gotten cheaper and cheaper.
But what are these cheap leads costing you?
Not just in dollars and cents but in the massive blow to your ego (and sanity for that matter) we all feel when we look back on the money and time we spent generating and texting leads with nothing to show for our troubles..
Is it a waste of time chasing low cost/ low intent real estate leads that will never convert into a closed deal?
How much money could you be making with a stronger lead source?
What makes one lead better than another?
Let’s peel back the onion on weak leads.
Spoiler Alert! All leads are pretty much the same.
Experiment with enough lead sources and you’ll see for yourself, a lead who registers on one platform will often be sold to you by another platform several months later.
So if it’s the same lead, why do some cost so much more than others?
High Intent VS Low Intent
The key determining factor in lead price is their level of intent.
Someone scrolling through social media and sees a pretty house that they decide to click on obviously doesn’t have the same level of intent as someone who Searches “Homes in Ellicott City Under $400K”.
The person who is actively going out of their way to search for homes has a higher intent and 9 times out of 10 will be buying a home much sooner than just a casual web surfer.
So that’s why some leads end up being so much cheaper, but here’s the thing:
They’re The Same Leads
Think about it, the people who sign up for a list of homes on Facebook are the same people who ask to contact an agent on Zillow a few months later.
It’s not like the Facebook (lower intent) leads you’re getting don’t use Zillow (higher intent), of course they do, they just haven’t gotten that serious about their home search yet.
Because of this fact, the cheap (low intent) leads are notoriously hard to convert. Not because they’re not interested but instead because they’re not interested YET.
And the high intent leads are so sought after that they are driven up to exorbitant prices making it hard for many top agents to justify the ROI.
It just means that buying more expensive leads isn’t going to fix your problem because as you can imagine more expensive leads are just a way to nearly obliterate your profit margins.
Napkin Math: If cheap leads cost you $5 a piece and convert at an average of .25% that means you’d be spending about $2,000 per closing. And If expensive leads convert at 2.5% (10x) but cost $60 (12X) per lead then you’d be spending $2400.
Can’t win for losing right?
The leads aren’t the problem.
That doesn't mean you’re not leaving 10’s of thousands of dollars on the table every year because you are.
It just means the culprit is somewhere else, hiding in plain sight.
Bad Follow Up is costing you 100’s of thousands of dollars per year!
That’s right, it’s not the leads, it’s the follow up.
I know life would be much easier if you could just buy more expensive leads and not have to put much more thought into a follow up system, after all being a good Realtor is already tough enough.
It’s not like you have the luxury of working behind a desk all day, you’re darting from showings to listing appointments all day. It’s not unheard of for top producing agents to eat dinner alone in their car between appraisals and client meetings.
On top of all that, you still need to grow your income, right? So you invest in online real estate leads but now you have to squeeze “Reaching out to new leads” into your already jam packed to do list.
What’s more is that since you can’t possibly drop everything to reach out to a lead as soon as it registers online, you’re missing a lot of connections. Which really just makes you feel bitter about online leads in general.
Maybe all those agents were right; maybe online leads are a waste of money.
But let’s be real, it’s not the leads, it’s your follow up. Not that you don’t have the tenacity and sales skills to follow up effectively. It’s just that an effective follow up process is a machine that takes time to build. Time that you simply do not have.
Here’s the kicker: a weak, unorganized or inconsistent follow up process is costing you almost 6 Figures a year, 6 Figures you could use to hire leverage and buy back some of your precious time. Just a thought.
Let the math speak for itself!
Let say you could convert those cheap leads to closings better than most agents convert the expensive ones.
Then you would close 4% of your leads, at $7.50 per lead ($5 + $2.50 per lead to implement a stellar follow up process) that means you’d be paying about $187.5 per closing.
That’s right, roughly $200!
With a little bit of work and the right business partner, you could build a follow up machine that gives you a closing for every $200 you feed it.
Now let’s say your lead generation budget is $1,000 per month.
If we refer back to the “Napkin Math” where you’re buying cheap leads but not converting them so well (due to a poor follow up process) you’d only be generating a closing ($2,000) every 2 months or 6 closings per year.
In an average market that’s about $30,000, nothing to gawk at but certainly not what you’re hoping for as a business owner, right?
With the proper follow up system in place and the closing machine you can build with Smart Alto you can use that same $1,000 budget to generate 5 closings per month ($200 a piece) for a whopping 60 closings per year. Whoa!
In that same average market you’d be making $300,000… You read that right, it would be 10X your income!
That’s $270,000 per year that you could be leaving on the table!
Now that it’s clear that there’s a fortune to be made with online leads, let’s explore the framework you’ll need to identify where you are right now and what your first step is toward making a fortune in online lead generation.
Picture a 2 by 2 matrix where the X axis is the amount of leads you are generating and the why axis is the number of conversions you are getting from your leads.
Using the number of leads and conversions (plotted leads/conversions) you can easily identify your quadrant on the framework.
And just by identifying your quadrant you’ll know what you need to focus on. This about this as a lead generation and conversion audit.
No Leads / No Conversions = D3
If you are not generating any leads and not having any conversions then your problem is an internal one. You need to focus on D3.
We Call it D cubed (D3) and what it means is you currently lack either the Desire, the Direction or the Discipline to begin building a successful real estate money making machine.
You need to set your goals (Desire), make your strategy (Direction), and have the commitment to follow through (Discipline).
No Leads / Many Conversions = Sales & Marketing
If you are not generating many leads but are still managing to get conversions out of the few leads you do generate then it is perfectly clear that you have D3 covered.
Instead what you need to focus on is Sales & Marketing.
Why’s that? Because your conversions indicate that you are doing a good job of winning over the people you get in front of, so in order to grow your business we just need to get you in front of more people! Increased marketing and prospecting will do just that.
(IMPORTANT: You need to figure out how to generate more leads. So join our Real Estate Marketing Mastermind Group to learn how to fill your funnel with more real estate leads than you can handle).
Many Leads / No Conversions = P.P.S.
The vast majority of future top producers find themselves in this category.
They are generating a high number of leads but are struggling to maintain a high conversion rate among all the leads they are generating.
This is a P.P.S. issue at its core: People, Processes and Systems.
If you find yourself in this quadrant then the thing you need to focus on is hiring the right People, implementing the right Processes and using the right Systems to grow your business to the next level.
Plenty Leads/ Plenty Conversions = Iterate, Test and Duplicate
This quadrant is the one everyone hopes to find themselves in one day. If you are generating plenty of leads and getting a strong conversion rate then the only thing you need to do is add more fuel to the fire.
In order to grow you’ll just keep iterating to avoid going stale, testing new ideas and duplicating what is already working.
The Fortune Framework operates a lot like a map for your business’ growth, showing you what you need to do to keep moving forward.
Fortunately, just by downloading the whole framework and answering a few questions you’ll be able to see exactly where you are and what you need to focus on.
Here at Smart Alto we’ve built the P.P.S for agents who find themselves in the category of “Many Leads/ Low Conversions”.
Our service was designed as a prebuilt bundle of People, Processes and Systems.
It’s no secret that Smart Alto only uses real human ISAs.
But we go the extra step of screening and vetting only the best ISAs to follow up with your leads.
Each and everyone of our ISAs is a fluent english speaker in either the US or the UK, meaning you can guarantee that all of the text conversations your leads will be having will be fluid and natural.
Created by Smart Alto’s founder Hassan the BANTAR Principle is a script that our ISAs use as the backbone of a fruitful conversation
Here’s what the BANTAR Principle looks like and how it’s used to guarantee awesome conversations.
A fundamental part of any Real Estate relationship is understanding your clients’ budgets. But you shouldn't just come out and ask someone “what’s your budget?”. It sounds off-putting and rude.
Have you ever shown a client what feels like a hundred homes and when they finally find one that might work they say “let’s see it again next week when my parents are in town, they’re the ones paying for it”?
Your buyers didn’t have the authority to make a decision, we filter those ones out to save you time and make you money.
NEEDS,WANTS AND EXPECTATIONS
Reviewing a home buyers’ needs, wants and expectations is a simple but effective way that Smart Alto makes sure you’re set up for success come time for your phone appointment.
Whether your lead is buying 1 month from now or 1 year from now, you need to know because it completely changes the way you’ll interact and follow up.
What areas are your leads looking in? Just because you advertise in one zip code doesn’t mean that's the only area your leads want to buy in.
RELATIONSHIP TO AN AGENT & LENDER
There’s no bigger waste of time than working with a client just to find out their uncles a Realtor and will give them a rebate. This part of the script is about protecting you and your time.
That’s the BANTAR process in a nutshell and you’ll fall in love with thoroughly qualified appointments with leads who have answered all of these questions.
(WATCH Hassan talk about the BANTAR Principle in more detail and share how you can use it in your business to qualify leads and schedule 15-minute phone appointments).
Perhaps the best part of everything we do here at Smart Alto is the way we integrate your current software into our system.
No matter where you are currently generating leads, Smart Alto can automatically gather them all and reach out within 5 minutes to maximize response rates.
After that we’ve created an entire follow up system that our ISA’s use to make sure you’re getting everything you possibly can from your leads.
And the best system of all? Smart Alto sets a 15 Minute phone appointment with those leads directly in your calendar. That’s right no more meaningless “warm lead” notifications or frustrating live transfers.
Smart Alto actually sets an appointment directly in your calendar and the lead will be expecting your call.
Once implemented Smart Alto is your P.P.S. so you can focus on growth!
If you’re not sure where you are, be sure to use the Fortune Framework to spot your business’ biggest opportunity for immediate growth.
The Fortune Framework can turn your stagnating business into a rocketship. That’s why we’ve made a downloadable version to print and hang in your office.
Download the Fortune Framework and support graphics here!