In a previous article, we discussed how to capture attention from the right market at the right time to help you win more customers, regardless of the market conditions. While an important first step, capturing the attention of your ideal client means nothing if you can’t convert them into leads and ultimately close more deals. Below we’ll explore how to do just that.
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Online lead conversion starts with a funnel
Creating a strong marketing funnel is a key component of capturing your audience’s attention and ultimately converting more leads.
What is a marketing funnel in real estate?
A marketing funnel is simply a “digital destination” that you drive traffic to on one end, then get leads or booked consultations out from the other end. It’s a mechanism that converts your traffic into real, tangible opportunities for you to grow your business.
In our opinion, every agent needs at least one, but ideally, multiple funnels.
The components of a real estate marketing funnel
At its core, a funnel has three main components:
- Your offer (what you are promoting)
- A lead-capture element (how you capture the contact information)
- A lead follow-up component (how to convert those leads into qualified opportunities – real buyers and sellers)
Let’s dive a little deeper into each component below.
The offer
An offer is what you’ll use to attract your ideal customer. It is the value you are exchanging to get the contact information from your target market. There are two types of offers: high-funnel and down-funnel.
Offers to attract down-funnel leads
Down-funnel leads are individuals who are further along in their purchasing decision. In the case of real estate, this would be prospective clients who are further along in their decision-making process to buy or sell a home and will be ready to take action within the next one to three months.
If you’re looking to attract down-funnel leads, you’ll want to promote an offer that helps them move along in their sales journey with you. You’ll be targeting leads in the “Consideration” or “Action” stage.
Below are some example offers you can create to attract this type of lead:
- Complementary home valuations
- List of homes available in a certain price range, or neighborhood, or MLS search on your website
- Co-marketing local home loan programs with your lending partners with special benefits
Considerations for attracting down-funnel leads
There are several factors to consider when targeting down-funnel leads, including the pros, potential drawbacks, and best channel(s) to reach these individuals. Let’s review each below:
Pros of this approach:
- These leads need very little nurturing and have shorter sales cycles.
- These leads can help generate business in the short-to-medium-term future.
Cons of this approach:
- The leads in this category are typically more expensive to acquire.
- There is a smaller volume of leads available.
Best channel(s) to attract down-funnel leads:
- We recommend using Google Ads to target these leads.
Offers to attract high-funnel leads
High-funnel leads are individuals who are not as far along in their purchasing decision. In real estate, for example, these could be prospective clients who are not ready to buy or sell a home just yet and may need six to twelve months of nurturing.
If want to attract high-funnel leads, you’ll want to promote an offer that is educational and less sales-driven. You’ll be targeting leads in the “Aware” or “Interest” stage.
Below are some example offers you can create to attract this type of lead:
- [City Name] Home Selling Guide
- [City Name] Home Buying Guide
Considerations for attracting high-funnel leads
As with the other lead type, there are several factors to consider when targeting high-funnel leads. This includes the pros, potential drawbacks, and best channel(s) to reach these individuals. Let’s review each below:
Pros of this approach:
- The lead cost is generally lower.
- You’ll attract a higher volume of leads, which is critical for long-term growth.
Cons of this approach:
- Most leads will not be ready to transact immediately.
- These leads require long-term nurturing (between 6 months – 2+ years)
Best channel(s) to attract high-funnel leads:
- We recommend leveraging Facebook & Instagram Ads, and TikTok to target these leads.
It’s important to have different offers to feed both your short-term and long-term business goals. We recommend starting with a down-funnel offer first. Once your business is flowing, add your high-funnel offers next.
After you’ve created your offer(s), it’s time to think about how you will use your offer(s) to capture leads.
Lead capture for real estate
In addition to your offer, you’ll need a way to capture the contact information of your leads in exchange for access to your offer. There are many ways to do this. The simplest way is to set up a landing page with a form on it to collect the contact information of the lead. At Luxury Presence, we provide our clients with pre-built templates. However, if you’re doing this yourself, there are many landing page builders out there you can use.
While important, creating landing pages for lead capture should only be a piece of your marketing strategy. You need a full website as well.
Lead conversion for real estate
On average, it takes nine individual outreach attempts to get a response from a lead. As an agent, you likely don’t have the time to call, text, and email each lead you get nine times, so we recommend automating this process as much as possible with your CRM.
Most CRM systems give you the ability to create short-term nurturing sequences, where over a period of seven days after the lead is captured, they are automatically engaged nine to twelve times, without your involvement.
If the lead doesn’t respond within seven days, we generally recommend you place that lead in a long-term nurturing sequence. This is where 70-80% of the leads that you generate online will end up, so this is a critical step. You should expect to nurture most of your online leads for at least 12 – 16 months before they turn into a deal.
You may experience traction faster than that, but a majority of your leads will require a long-term nurturing process where you’re emailing, calling, and texting over a longer period of time. This is the most effective way to scale and ensure you’re getting the most out of your marketing.
Components of a great lead conversion sequence
There are a few key points to remember for optimum real estate lead conversion.
First, “speed to lead” is critical. You must have initial contact within the first two minutes.
Next, all of your messages should be personalized. For example, if you were sending a text message, it should read, “Hi [John], do you have any questions about your home valuation”? Instead of, “Do you have any questions about your home valuation?”
Additionally, all of your messages should reflect the offer type the lead was generated through.
For example, if someone requests a home valuation, your follow-up should be crafted around the home-selling process. Similarly, if they register on your website looking for homes for sale, your follow-up should suggest other listings, tips, and educational content about buying a home.
To help simplify this, we created a free Lead Handling Guide. You can click the image below to download it.
Download our free lead handling guide
Lead conversion benchmarks
In order to measure the success of your efforts, there are a few metrics you should monitor regularly. Your lead conversion rate is an important metric to keep tabs on. The National Association of Realtors® (NAR) estimates that the average real estate lead conversion rate is 0.4%-1.2%.
Some other important metrics to monitor include leading indicators and lagging indicators. Leading indicators can be used to determine the health of your real estate marketing funnel. While lagging indicators reflect your results. Below is a breakdown of some leading and lagging indicators to monitor.
Leading indicators:
- Lead response rate – the percentage of leads that respond to outreach
- Appointment booking rate – the percentage of responded leads that have a consultation or listing appointment with you
- Close rate – the percentage of consultations you convert into closed transactions
Lagging indicators:
- Cost per lead – the number of leads divided by the total cost of your campaign
- Cost per appointment or consultation – the number of conversations you have with your leads divided by the total cost of your campaign
- Cost per client (cost of acquisition) – the number of clients who transact with you divided by the total cost of your campaign
Generally, your cost of acquisition (or the true cost for you to acquire a new client) should be around 30 – 40% of your total commission in the beginning. For example, if your commission on a deal is $10,000, your cost to acquire that deal should be in the range of $3,000 – $4,000.
This cost should decrease over time when you implement an effective lead nurturing process, as we covered previously.
Recap
The ability to capture your customer’s attention and ultimately convert that attention into deals is a skill that will keep your real estate business healthy, regardless of the market conditions.
As we discussed above, converting leads online starts with having a strong marketing funnel (any mechanism you can drive traffic to and capture leads). You may need different types of marketing funnels for different offers (down-funnel and high-funnel) to prioritize both short and long-term growth in your business.
Creating a strong marketing funnel also means optimizing it for lead capture. This is a critical step if you want to see results. We recommend creating landing pages and ensuring there is a form prominently on the page (if you want this done for you, we can help).
It is also imperative that you have a process for lead conversion. Leads won’t convert on their own – you need to work them. We suggest you leverage automation as much as possible in your follow-up to keep it consistent.
Finally, it may take you some trial and error to create high-converting offers, that’s why it is important to measure the performance of your lead nurturing sequences. Watch your metrics closely and analyze the performance of your campaigns on a monthly basis, at least.
If you’d like help with how to implement these real estate marketing strategies in your own business, book a free strategy call with our team.
