WHOOOOOAAAAA what did you say about real estate lead generation dude?
There is a reason 87% of agents fail in real estate after 5 years. It’s because they can’t get business. The most important part of our business is real estate lead generation because doing real estate isn’t rocket science.
Why such a high failure rate?
I believe that many real estate agents are being led in the wrong direction in terms being told what they should be doing for real estate lead generation. There is a paradigm shift that has occurred and real estate agents are no longer in the sales, we are in the service business.
Let’s start at the beginning:
You are a small business owner. You work for yourself, not your broker. It was reported that only 4% of consumers chose their agents because of the brand they affiliated with so don’t fall for anyone telling you otherwise. Unless you are getting clients handed to you, you are on your own.
Now that we got that out of the way, what is the first thing any business owner should do?
I’m not sure about you, but the first place I would start is finding out how to drive sales because consistent real estate lead generation is the difference between making it or not in this business.
Most Agents go right after the shiny objects for real estate lead generation instead of first researching where they should prioritize their marketing efforts.
It’s very easy to get distracted by the shiny objects, so let me first define what I mean by that. Shiny objects are the products or services that Realtors are bombarded by today that sound like the next best thing since sliced bread.
It might be a Facebook ads service
It might be a super duper autoresponder with a fancy drip email campaign attached to it.
It might be some slick app that helps you geo farm an area.
It could be some fancy CRM like system that generates opt ins and leads for you.
Most of these products or services work well, but is that really where you should be placing a large emphasis of your marketing resources?
Look prospecting is great. The shiny objects are great. I love these marketing tools, but they are not the most important or effective real estate lead generation system to implement.
The most profitable source of business for real estate lead generation is your database of relationships.
Now I’m going to prove it.
Over 60% of all agent business comes from referrals and repeat clients, but you don’t get these from strangers, you get them from the relationships you have developed in life.
These are the stats:
Here’s another one;
So then I did some live research. This was a poll done in Lab Coat Agents which is a Facebook group of roughly 56,000 + Realtors across the country. Last Christmas Day they conducted a survey asking Realtors where the vast majority of their business comes from. Here are the findings:
The numbers speak for themselves. The vast majority of business is directly attributed to referrals and repeat business.
So let me ask you this; what should be your highest priority in marketing your real estate business?
Should you get a super duper email autoresponder or try to figure out how to market your database and relationships?
My mission of The Real Estate Marketing Dude and my software Attracktor is to bring this to light. The shiny objects can put you out of business. I’m not saying prospecting isn’t needed, it is. It’s essential, but only after you build the core components of building an audience out for your database.
Want to know what you need to get lots of referrals and repeat clients?
Good Relationship Building Skills because people do business with agents they know, like, and trust.
The goal of real estate lead generation should be to become the most known, liked, and trusted agent in your market because it’s a FACT that over 60% of business is derived from referrals and repeat business.
Nothing is more valuable for your business than building an audience of relationships and then staying in front of those relationships.
The concept I’m talking about here, Relationship Marketing, is how Best Buy, ByeBye Baby, and virtually every successful business markets their brand.
Why can’t you do the same thing in real estate lead generation?
Quit chasing leads and start chasing relationships so that you can begin attracting clients to you. Continue to reinforce those relationships with consistent communication and then you’ll start attracting business from them. It’s really that simple. This kind of marketing doesn’t require tech skills or “scripts”, it just requires you to set up system that keeps your brand at the forefront of your database.
Why do so many agents chase the shiny object first for real estate lead generation?
They sound bad ass and are told this is the way. Brand new agents are told from the beginning they must be cold calling, prospecting, and constantly chasing leads. I agree with this partially, but only after they first build a relationship marketing system within their business.
This boggles my mind…
Recently another poll was done in Lab Coat Agents asking what agents need most help with in their business. As you can see from the image, marketing their database or building relationships was #4 on the list. I think it’s crazy that if 60% of all agent business is coming from referrals and repeat clients, why isn’t that #1?
The shiny objects I’m talking about are typically not cheap. An agent can sign up with an account for Z-buyer, which is a seller lead source of internet leads. They are going to run about $500 a month or $6,000 a year in most markets, but those costs will vary.
Although Z Buyer is a great source of seller leads, is it something an agent should tackle before setting up a system to stay in front of their most valuable asset…their database?
Maybe you want to go after one of the CRM’s like a Commissions Inc, Boomtown, or Bold Leads. These are great systems in what they do as they tackle online lead generation, but it’s a numbers game. If you throw enough shit at the wall, of course something will come out of it. The issue is that some of these systems can run an agent up to $2000-$3,000 a month.
That amounts to $24,000-$36,000 a year on one system, which many agents cannot take on.
I did another post in another Facebook group of agents to gather some additional research.
When asked how much is invested monthly on one of the Fancy CRM’s I received plenty of responses.
I then posted a question about how much time and focus is spent on marketing their database and received the following….crickets….
This simple exercise again proves my point that many agents are in the mindset up creating leads vs. relationships. The shiny objects are cool, but they are not responsible for 60%+ of business, your database is. I will again ask you, which is more important?
Do you want to know how much I spend on my annual Relationship Marketing efforts?
Less than $4,000 a year and it accounts for 95% of my business. In my personal business I don’t have to invest in shiny objects because I control my own destiny with real estate lead generation. I know where the vast majority of business comes from.
The stats do not lie. If over 60% of ALL agent business is sourced from referrals and repeat business, what is the most important marketing system to set up before you start tackling the shiny objects?