Real estate lead generation is changing. The entire purpose of this post is why you need to change with it and ignore all the noise, especially when it comes to shiny objects. 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. However that’s where most of us hit a wall. What is real estate lead generation vs. real estate marketing and what do I do first?
Most agents suck at real estate lead generation
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. Should agents be chasing leads or relationships? Let’s first define what lead generation is.
What Is The Lead Generation Process?
In marketing, lead generation (/ˈliːd/) is the initiation of consumer interest or enquiry into products or services of a business. Leads can be created for purposes such as list building, e-newsletter list acquisition or for sales leads. … The opportunity then has to undergo multiple sales stages before the deal is won, according to wikipedia.
Why Do Most Real Estate Agents Fail?
I don’t care if you are new or experiences in this business, the majority of your business doesn’t come from lead generation it comes from people you already know or personal meet. Most real estate agents go right after the shiny objects of real estate lead generation instead of first researching where they should prioritize their marketing efforts. They start searching for real estate leads in the following sources and start chasing objects.
- Facebook ads
- A super duper autoresponder with a fancy drip email campaign attached to it.
- A geo farm area
- A CRM like system that generates opt ins and leads for you.
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.
Should I pay for real estate leads?
No, you should pay to make sure everyone if your relationships in life knows you’re in real estate because the most profitable source of business for real estate lead generation is your database. 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:
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:
Where do clients come from for real estate agents?
- 74% came from sphere if influence
- 9% came from Facebook
- 5% came from Internet leads
- 10% from cold calling and prospecting
The numbers speak for themselves. The vast majority of business is directly attributed to referrals and repeat business.
How Do I Get Free Real Estate Leads?
Start developing 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 leads vs market for referrals?
They are told to chase leads vs nurture relationships. Here’s an interested poll.
A 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?
Lead generation is not cheap. An agent can sign up many different types of lead services, but plan on dropping some dough. 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 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 Database 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? You better answered your database or go back to the beginning.