Drumming up leads can be done in a variety of ways; events, door-to-door, and referrals are all options. However, one of the easiest ways to get leads is to just buy them. We all know of different types of list brokers and online sources who can slice and dice different demographic data into hopefully delivering qualified leads that have a high likelihood of being successful for us.
But the issue with purchasing leads is always about quality. Anyone can put a massive list of names and contact information into a spreadsheet, but if none of them wants to buy or sell a house, then unfortunately, you’ve wasted time and money. More than 40% of marketing experts say that poor lead quality is their biggest barrier to successful lead generation.
The ideal situation is when you can get high-quality leads and get them cheaply. To do that requires some strategy and planning, so let’s look at the most effective ways to invest your time and money when it comes to purchasing leads.
If you’re trying to get more clients, you can do one of two things:
I’d recommend Option 2.
Online leads can cost a lot, with little in return
An analysis of various real estate lead sources indicates that costs can vary widely — anywhere from $2 – $100 per lead or more. Additionally, getting those leads requires you to make a year-long (or at least month-to-month) contractual commitment, and within the details of that contracts are often restrictions on how you can use the leads. So, before you can even see if they’ll prove to be of any value, you have to make a sizable investment.
There is a large contingent of realtors who will tell you to avoid buying leads online. Their feelings are typically for reasons of cost, as mentioned above, but also because of poor value. Some even suggest that buying online leads can be a fix for when you need to drum up new business quickly, but like any type of business relationship, those leads have to carry some realistic potential to turn in to actual opportunities. Many of the sources for leads (Realtor.com, Zillow, and others) have convoluted rules about what constitutes a lead and what the buyers are actually getting. One real estate agent communicated his frustration about a particular well-known vendor: “I’ve been billed $25,000 for the same information… the same buyers… over and over.”
A report from Inman about the efficacy of online leads includes this synopsis of research about ®Realtors’ perceptions of their paid lead acquisition: “When their return on investment was rated individually by agents, all four listing portals included in the survey — Zillow, Trulia, Realtor.com and Homes.com — received more ratings of “poor” than all their ratings of “mediocre,” “good” and “great” put together.”
Realtors spend almost $9 billion every year on advertising, and Attom Data found that 56% of that (a little more than $5 billion) is spent on purchasing leads. One could argue that there’s something valuable enough in buying leads that people keep doing it, but there’s a huge difference between being a buyer and being a discernible buyer. It’s important to be astute about what and how you’re buying leads so you can derive the most value out of your investment.
Real estate agents spend $9 billion every year on advertising
Get More Value by Applying the Right Methods
Those who have had success with online lead purchases usually cite one or more of these three things as being critical to using leads effectively:
- Requirements: Be specific about what you’re looking for and only purchase from vendors who can deliver according to your specs. Besides demographic and geographic information, be specific about the format of your leads; demand that duplicate records be only counted once, that there will be no fake IDs, and any other aspects that will help prevent bogus leads.
- Process: Most of us can attest to instances of getting leads but not following up. Of course, the leads you don’t follow up on will be worthless to you. So, by instituting process and the right tools from Agentology, you’ll be able to automate lead capture, email distribution, marketing nurturing, and consistent follow-up and outreach. It’s only through this kind of discipline that you’ll generate a return on your investment. A realtor in Austin, TX said it this way: “I’m trying to increase the number of leads coming in as opposed to decreasing them. It’s important to me to continue the flow of leads at a consistent pace. “
- Nurturing: Remember that leads all by themselves don’t really do much. If you nurture those leads through effective marketing efforts, then you can, over time, turn them into actual business opportunities. Part of doing this is ensuring you’re constantly focused on converting. If you aren’t, then your competitors are. Hubspot estimates that 74% of those who work with online leads believe that converting those leads into customers is their top business priority. Thomas Devor, a realtor in Glendale, AZ, said, “No matter what type of internet leads you’re working with, the majority are looking six to nine months out, so staying top of mind is critical. Therefore, it’s important to have a lead capture system in place so that you can track what your agents are doing as far as staying in touch.”
Organic activity can deliver a lot of leads (some say as much as 51% of your leads), while the cost of purchasing leads will likely result in smaller numbers. Yet, keep in mind that small businesses tend to fare the best when it comes to buying leads. Hubspot suggests that smaller businesses (those with $250,000 or less in annual revenue) can be very successful with approximately 100 quality leads per month. Larger businesses require a lot more leads and a lot more activity to get those leads. And, ultimately, it’s the quality of those leads that’s what is most important.
In the end, real estate agents have a lot of roles to juggle – buying/selling homes, and building a business. There are endless ways to drum up business, and as we’ve seen here, online leads can be an effective way to do that. The key is to be specific and focused about how you structure your lead buying, and then ensure you are disciplined about actually using those leads to deliver business to you.
If you don’t want to pour 100s of hours doing this process manually, hire a service like Agentology to handle it and convert those leads for you.