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There is no shortage of real estate marketing tips and strategies available to agents today, from branding to content development and search engine optimization.
However, there was traditionally another option for agents and brokers who wanted a turnkey, hands-off approach to lead generation: leads paid through an online portal like Zillow or realtor.com.
However, increasingly, the high price and low quality of paid leads, coupled with the existential threat posed With big-tech foray into the real estate industry, individual agents, team leaders, and broker owners are reconsidering the wisdom of outsourcing marketing to a third-party platform. So what if we all stop paying for leads?
What’s the problem with paid leads?
Simply put, according to a growing number of real estate agents and brokers, paid leads cost too much and provide too little return on investment.
In fact, real estate professionals praised Inman Contributor and founder and CEO of Kris Lindahl Real Estate, Kris Lindahl, who predicted in his recent opinion column that buying from leads could kill your business in two years.
“Agents used to say, ‘I have the listings and the property details.’ Now, consumers and big tech have the data, so what is its value? If you swipe your credit card every day for an outside company to send you clues … Third parties control your destiny, not you, ”Lindahl wrote.
Tarasa Hurley of Keller Williams Pittsburgh North has already stopped her generation of paid Zillow leads due to low quality and high cost.
“I have been a licensed real estate agent for less than a year and I just put my 12th property under contract. Most of my deals have been made in the last few months due to my own publicity,” he told Inman in an email interview.
“My first leads and three deals were from Zillow and they were very low price ranges. After those three deals, I didn’t get any more leads from Zillow despite paying them $ 1,000 per month for an additional three months, ”he said.
She is still paying for realtor.com leads, but said, “Once my contract has expired, I will no longer do it. Leads are low to medium quality. ”Hurley added that so far he has failed to convert any to actual sales.
According to Dave Nations of St. Louis, founder of The Nations Network at Keller Williams Realty Southwest, although his team still pays around 100 PPC (pay-per-click) leads monthly, his business is currently based on 80-90 percent. of references.
Nations said referrals have the best return. “And when you work properly with your database, you will generate consistent business from it annually,” he added.
Inman’s broker-owner and contributor Erica Ramus agrees with that approach.
In a recent Inman column, explained how his brokerage has pulled out of paid leads, hoping to help others who want to do the same:
“Once I realized that the playing field was changing, that incoming leads seemed to be less and less suitable for our office and how we handled the process and that calling buyers seemed to be of lower quality and more difficult to reach. convert, we change our marketing approach.
“In 2020, we revamped everything and reduced online portal purchases to almost zero. Almost. I still believe that you need multiple sources of lead generation, so we will keep a lower purchase on Internet leads, but it has really been reduced to less than 10 percent of the spend we made in 2018 and 2019.
If there are no paid leads, then what?
Ramus reported that with his newly released budget, his brokerage was able to diversify its spending into three categories: community building, online marketing (generated from its platform), and print and direct mail.
Michelle Coffing, Sales Director for Great Vancouver Homes, Weichert Realtors Equity NW, said she is now focusing on SEO built through keyword-optimized blog content after experimenting with paid leads in the past.
“Ultimately, this is a volume game,” Coffing said. “The more key phrases we target, the better our chances of ranking them on Google. With a constant stream of leads coming to us through Google, the idea of paying leads is not a principle. “
Hurley also focuses on generating content to find organic leads through online advertising campaigns on Google, Youtube, and Facebook. It continues to tweak and improve its campaigns, and has seen sales “increase dramatically,” receiving some solid leads each week, he said.
Kent Rodahaver, a Florida broker with NextHome South Pointe, uses multiple referral-based services that are not paid until a deal is closed. However, he finds that “neither of these is a substitute for working your SOI and maintaining exceptional relationships with your current and past clients.”
In 2019, Rodahaver saw that 79 percent of its business came directly from referrals and previous clients. “In 2020 that number increased to 93 percent,” he said.
How do technology companies respond to change?
Like tech companies selling leads go deeper and deeper into the brokerage businessA massive exodus of paid leads might not matter much, as they are geared toward serving your inner interests. However, for other technology companies, such as CRM developers, a change in paid leads might require a different kind of service for your user base.
According to Inman’s Craig RoweSome CRMs have hired staff to monitor agent databases and identify worthwhile activities. This automatic monitoring can help officers uncover clues that are suddenly reactivated. “Tech companies will have to offer more tools for long-term marketing,” Rowe said, “which means they will likely be more practical in the success of their customers.”
Ultimately, companies that choose to continue providing paid leads may need to spend more time nurturing leads to improve their quality or rely on less experienced agents buying leads as they work to get their own marketing platforms off the ground.
Hurley, for example, has been a licensed agent for less than a year and used his leads from Zillow and realtor.com as a way to boost his business. However, he found that expense, low ROI, and declining quality of leads meant that his own advertising was responsible for the majority of his first-year deals.
What does day to day look like without paid leads?
Of course, agents will have to do their part and take a more hands-on approach to their marketing, focusing on analytics to find out which messages are getting responses, which Facebook headlines are working, and which listings are getting the most activity. Rowe said.
Many of the agents we spoke to were focused on brand Y content construction, creating their own digital environment (online presence, social networks and virtual communication), and drive traffic to your websites.
These strategies involve significant commitments of time and money to generate and sustain in the long term. That financial commitment is often intimidating, and it’s an argument some broker owners and agents use to stick with paid leads.
“I find that the ROI [for platform development] it’s great, but the initial cost and learning curve are extremely high, ”Hurley said. “I think it would be difficult for most agents to do this themselves without paying someone to set up these campaigns.”
Can You Save Money By Forgoing Paid Leads? It can, due to the quality of the potential customers themselves. When agents and brokerages own the potential clients, that earned business remains in the long run. “Because it took longer for the buyer or seller to make that decision, which means they are more interested in it than just clicking on some ads,” Rowe said.
Christy Murdock is a real estate agent, freelance writer, coach and consultant and owner of Real estate deed. She is also the creator of the online course. Crafting the Property Description: The Step-by-Step Formula for Reluctant Real Estate Writers. Follow Writing Real Estate on Twitter, Instagram Y Youtube.