Oh, real estate agents. You’ve got to love them. They are a breed like no other. If there’s one thing I’ve learned about dealing with the colorful variety of agents around the country in the past several years, it’s that they know one thing and they know that thing very, very well – how to sell houses.
The practices of a real estate agent can be a mystery to those outside of the industry. Like it’s a secret that they can’t quite touch from beyond the inner circle. This is where agents truly stand in their power – they do have that secret. They know what to do to take a deal from prospect to profit.
This rigidity and critical focus can make some agents reluctant to listen to advice from others about how best to run their business. Especially if that advice is from someone who doesn’t work in the real estate industry.
One of the common problems we’ve encountered with this fixed position of real estate agents is they don’t put a lot of value in digital leads. They choose to focus on the traditional practices which have always got results, simply because digital is outside of their comfort zone.
Digital leads are not the same as traditional leads. It’s like comparing apples with oranges. Digital leads may have a lower conversion rate than traditionally sourced leads but that doesn’t mean that generating interest online has to be dismissed outright. Digital leads just have to be managed differently.
Here are the ten most common misconceptions real estate agents have about digital leads. We hope we can inspire you to broaden your perspective about this aspect of the industry, and help you take that leap into the unknown to create a more complete, holistic real estate business.
“Online lead generation doesn’t work in my market”
This is a common misconception among real estate agents all over the US. The truth is, there isn’t a niche in the country which doesn’t have a competitive online market. They can all be difficult to crack if you don’t play the game the correct way.
The good news is, using advertising to generate leads for your real estate business works everywhere. No matter how competitive your market is, there is always an avenue to generate and collect leads from the internet.
Here are the results from recent digital lead generation campaigns which worked in some of the toughest markets in the country: San Francisco, Beverly Hills, and Fort Lauderdale. To grossly misquote Frank, if you can make it there, you’ll make it anywhere…
“Online leads are low quality”
With the vast majority of homebuyers starting their search online, it’s no surprise that the number of digital leads has more than tripled over the past few years.
In the same time period, the number of homes on the market has remained constant. This is a clear sign that, yes, there are more low-quality leads from online sources but agents have to remember that within those there are still high-quality leads that are ready to convert.
Tackling online leads requires a different approach to the traditional leads which agents generate. It’s really only a matter of having a tighter funnel to qualify buyers from dreamers. There are a lot of agents who know how to expertly profile their digital leads and convert them into profit.
“Online seller leads don’t work”
While some agents concede that yes, buyers do shop online for houses, few believe the internet is a valid way to connect with a seller. Personal relationships are one of the anchors of the real estate industry, and especially important for customers who want to maximize the value of their home.
While building a personal relationship with a seller is very important, the first few steps to connecting with that seller can come from an online source. The digital market allows sellers to open their search up to the world of agents, meaning there are a lot of genuine sellers out there who can be accessed with a well-designed funnel.
In fact, for as little as $25-50 you can generate high-quality seller leads which convert. Check out these figures from a recent online sales leads generation campaign.
“Affluent clients can’t be reached via digital campaigns”
There’s a common misconception that high-net-worth individuals (HNWIs) don’t use the internet as much as regular, normal folk. This study by PWC shows that high-net-worth individuals enthusiastically adopt technology, have a high level of digital literacy, with 85% using three or more digital devices for five or more hours a day.
The study shows that 52% of HNWIs are concerned about being taken advantage of, with 64% willing to pay for professional expertise. What better way to show the transparency of your business than with a well-rounded social media campaign?
“Online leads don’t lead to conversions”
There may be some truth in this, as a larger percentage of the leads gained from online sources will not be as strong as the leads generated from traditional real estate techniques.
That isn’t to say that online leads don’t convert. They do. They just have to be handled in the appropriate manner. It’s a completely different follow-up technique with timing proving more critical in getting a conversion. Don’t treat the apple like an orange. It’s a matter of adopting a completely different set of processes and procedures for this aspect of your business.
“Zillow has won the lead-gen game, there’s no point in competing”
There’s no denying that Zillow has done the hard work to get lead generation in real estate just right. The truth is, we can now all benefit from their technological research and advancements as similar software is available which does the same thing but is in your control.
Many agents have been turned away from the benefits of IDX tools as the older versions were so bad they gave an awful user experience. Modern IDX websites are fluid and dynamic and, if done correctly, can drive buyer leads through a good SEO-optimized website.
You can also create a brand and a unique user experience that speaks directly to your customers. A good quality IDX website can generate interest for less than $10 per lead while Zillow would charge significantly more for the same information.
“Cost-per-lead is the most important metric”
Many real estate agents are hung up on the idea that the cost per lead is the main factor which decides whether that form of lead generation is economically viable. This is an understandable approach if you are looking solely at traditional lead generation techniques, however, digital lead generation should be treated like a separate entity entirely.
Online leads are different to traditional leads and should be managed differently. The most important metric in this niche isn’t the cost per lead, but the cost per conversion. It’s all about return on investment. Low-cost leads are often low quality. For example, is it better to generate 100 low-cost leads and close on one deal or to generate 40 quality leads and close on two?
“Great lead generation agencies cost thousands of dollars”
There is some truth to this. Anyone who has explored the market of real estate lead generation knows that the top agencies can be expensive. Some charge up to $10,000 a month in management fees.
Like most things in life, you get what you pay for. The return you get on your investment will turn into profit due to the quality of leads which are generated by secure industry professionals who know what they’re doing.
In reality, you don’t have to spend anywhere near $10,000 a month to generate top-quality leads. There are numerous real estate-focused agencies which can drive serious results for less than $1,000 a month.
“I can hire any agency to do my real estate lead generation”
Anyone who works in the real estate industry knows that things work differently in housing than in any other type of market. Buying and selling real estate is absolutely unique and can be a mystery to those who are not involved in the industry.
Generating good-quality real estate leads works the same way. It takes that same specific industry knowledge to get it right and do it well. While there are some great digital marketing agencies in the world, generic companies who do not specialize in real estate can struggle to get the same results as industry-focused folks as they don’t truly understand the personas, the playbook, and the culture.
“I can’t build up a business from online leads”
As the digital canvas in real estate is so competitive, many agents can have a defeatist attitude towards working online, especially when starting from scratch. The truth is, that even if one were to start out today, it is possible to build an online sales funnel which can work as the basis for a successful real estate business.
Nobody said it was going to be easy, though. Building an online presence requires patience and commitment, two things that busy real estate agents often haven’t got the time for. An experienced digital agency who specializes in real estate will have already done the trial and error process and will be able to offer you an almost out-of-the-box solution, whether it is a website, a social media campaign, or both.