If you know me, you know that I believe strongly in Internet Marketing. In fact I believe so strongly that I have stopped all my other advertising...all of it. I have had other Brokers tell me I'm crazy for putting all my marketing online. They have told me that I have to be in the magazines or consumers won't list with me.
So is it worth it? YES!!! I have spent the past 6+ years marketing on the Internet for Real Estate. I have tried and tested almost every lead generation product out there these days. I can tell you that almost all of them are a complete waste of time. I can also tell you that almost all print is a waste of time and if you are doing it because your seller wants to see their home in the magazine, you are wasting valuable time and money.
Yes, I tried the conventional marketing route and was extremely successful. However, once I implemented my Internet program, I shot to the top! The reality is after spending hundreds of thousands of dollars on conventional and Internet marketing, the jury is in and the Internet Marketing wins.
Let's look at it through the numbers. If you know me, it's all about the numbers. In the past when I marketed in magazines I would spend an average of $500 for each magazine and I would be in no less than 2 magazines per month. Let's see, that's $1,000 per month...average phone calls per magazine was 5. Even during the big boom I still only received an average of 5 calls per ad. So my $1,000 was getting me around 10 potential buyers per month. Let me get my calculator out...that's $100 per lead. Out of my 10 phone calls, I might have averaged 1 sale per month...and I am very good on the phone. So where is my calculator again, yup, that's $1,000 per sale. Ok, that's not horrible. I would always pay $1,000 for a commission of $3k or more. Of course we never know if that is going to be the figure but for today, we will say it is.
Now let's look at Internet Marketing. Currently we are paying about $5 per raw Internet Lead. This year, we are averaging about 1 out of 40 raw leads becomes a sale. So let's see what that means if we run the numbers. If I spend the same $1,000 per month and generate 200 leads that will give me about 5 sales. Of course these numbers as with the magazines, can go up or down any given month. How about my Agents that are closing 1 out of 25 leads. About a third of my Agents are at this level. This means for every 200 leads they are generating 8 sales. Iin my office right now, our average Agent receives 50-75 leads per month. I have several Agents that have already closed 10 sales this year.
So how much money do I have to spend on magazines to receive 200 leads? Is this starting to make sense yet? The reality is, if you put together a strong lead capture and conversion program, you will end up being far more productive and successful than you can imagine. The key is patience. Internet Marketing is a process that takes at least 4-6 months to get rolling and it really takes a year or two to feel the full benefit. At this point of my Brokerage, I could shut off lead flow on any of my Agents with over 1,000 leads in their system and I would guess they would be busy for at least a year if not more.
Personally, even though I don't sell houses anymore unless they are my friends or friends of friends, I still manage to sell 6-10 houses per year from my old leads (usually repeat customers) and I give away around 10 or more sales to my Agents from my old leads. The best part, I haven't taken a lead from my system since January 2004. At that time I had 3,000 leads in my system. Since then, I have reassigned almost all my leads to my Agents as my job now is to generate leads and make all my Agents successful. That's another blog though on how to make all your Agents successful!
Hopefully you will see the value of Internet Marketing. However, if you don't use a great system to follow up and continue to send them information, you are going to waste your money. As always, I am available to chat by phone or email to help you. Unfortunately if you are an Agent or Broker in Brevard County Florida I can't help you. Nothing personal, but if I taught you what I know, it would hurt my business.
You can also check out the tip of the week on my eHomes Realty Network site which is still under construction. You can go to www.ehomesrealty.com to check it out. Good luck with your marketing. Hopefully you will see that the numbers don't lie. The internet is the future of your marketing, the quicker you realize this, the quicker you will be able to make your changes that must be made in todays Real Estate market.
One of my clients was spending $200,000 per month on television.
He was able to get about five times as much business with only about $20,000 per month in Internet Marketing.
I too, believe in internet leads. I am working diligently to increase the number of leads from my own website. Do you currently purchase any internet leads? If so, from whom?
Mitch, We haven't had good results from the internet, but reamin positive we will in the future. We will continue to work diligently in this area.
I think it's a learning curve issue for us. Most of our leads come from signs, sphere and social marketing.
ActiveRain has been a great tool for me. Just in the last month I have had several buyers call as a result of my work here. You need to post fresh content and keep your profile up to date, but even a modest presence here will keep you ahead of agents in your area that aren't online. I have many other web activities that generate leads, but if you are only going to be in one place besides your main site, ActiveRain is a great choice.
Internet marketing makes so much sense given the fact that a huge majority of those looking to buy and sell are starting their search on the internet.
Between 3 sites we average over 2.9 leads per day.Some good some bad but boy what a database and always some one to call.
Great Comments!
It really comes down to cost per lead and cost per sale. I'm a big believer in building a database and over the past three years we have built our database to over 20,000 buyers in one office and 10,000 buyers in the next office. As I mentioned, I could shut off the lead flow, and we would do great for a year or more. However, I think it would affect my Agents negatively if I did that. Plus, a lead today is building my business for tomorrow. Remember, it's all about patience and building a business. If you are looking for a quick sale, the Internet isn't the right place to go.
Karen and Ray - It's all about systems to convert these raw leads to customers. You must win them over, not much different than in conventional marketing. A solid system will always be successful no matter how you are marketing. I choose Internet because I can accomplish so much more with a lot less money. Just think if I did conventional marketing to generate the amount of leads I do. It would cost me a fortune...and my left leg!
Vickie - I haven't found a source to buy Internet Leads that I can say. The beauty about generating your own leads is that you have complete control over what you do with those leads. To do this, you must have a good lead capture set up on your site too. Most Agents do a terrible job at capture which drives their cost per lead and then their cost per sale through the roof.
As always if you would like me to look at what you are doing, please don't hesitate to call or email me. I help Agents and Brokers almost daily these days. I really enjoy taking someone who is "green" on the Internet and making them a player on the Internet. It's very fun to me!
Keep up the great work!
Dave, Thanks for the good news about AR. We are fairly new here and I must say very impressed with the members here.
We may be tapping your insight and knowledge. Since we are not competing for the same customers it may make sense to collaborate. We have a website that is about six months old it has generated a few leads, but nothing spectacular yet.
Have you ever had the chance to visit the mount dora area.
Have a great day!
Everybody, What percentage of your closed sales come from the Internet and how does that compare from a year ago.
Dave - I was impressed by how you illustrated the fact that the internet leads are the way to go. Also, I agree with your statement, "I have tried and tested almost every lead generation product out there these days. I can tell you that almost all of them are a complete waste of time."
My company has a "Relocations Department", and every lead they have sent to me, about 6 in the past year, has turned into nothing. Some died before I ever made contact with them, others after months of communicating on the phone and sending MLS listings, data, etc. The "leads", looking back, always hinged on finalizing some other situation before they would be able to buy, such as selling the property they have listed in the state they live in before coming here to Hawaii, collecting a major insurance settlement, etc.
No one in my office has ever closed one of these leads, yet in the offices that are in the upscale areas, there are agents that are closing on a regular basis. Any thoughts?
My results are similar to the ones shared by Mr. Mackey.
My results are similar to the ones shared by Mr. Mackey.
My results are similar to the ones shared by Mr. Mackey.
Karen - Our office Internet program is responsible for 98% of our sales. This year may be a little less only because we have decided to take a few listings this year. Then again, most of our listings come from our Internet marketing too! I won't check my stats until the end of the month, but I believe we are right around 85 sales this year so far with 1 not being an Internet Lead.
With that said, all we do is Interner Marketing. I won't spend a penny on anything unless it has to do with the Internet. As per my original post, I can't justify the money on any other form of advertising when it comes down to conversion rates.
Michael- Without knowing more about the leads and how they are obtained it's tough for me to answer this question. However, I will try. Internet leads MUST be called within 24 hours and MUST receive some other correspondence within a couple of hours at the most. My guess is you are not getting these leads in real time. The longer you go without any contact, the quicker they go away.
Keep in mind that when you receive a lead, whether it's an Internet lead or a relocation lead, it has to be put into an update system right away. Do you put every lead into the automatic listing update system which should be part of your MLS? If not, you need to do this. When you do this, it helps stay in touch with your customer, gives them the information they need, and gives you a reason and an ok to contact them on a regular basis.
My other thought on your question is the fact that it's a numbers game. The better Agents are going to close 1 out of 40 leads, the excellent Agents are going to close 1 out of 20 leads, new Agents may close 1 out of 50 or 60 leads. It's all about the numbers. Once you understand that concept, it makes it much easier to except!
All Internet Marketing must have a conversion system attached to it. Without a good capture and conversion system, you are throwing your money away. If you have any other questions, please don't hesitate to ask.
Dave - One of the main requirements of getting the leads is contacting them (by phone) in no less than 20 minutes from the time they made contact with our relo dept. Once I have made phone contact with the lead, I place them in my data base, add them to a drip email program, and setthem up on the "Client Gateway" on our MLS, which sends automatic notification of any new listings that may meet their criteria.
All this makes it easy to maintain contact, by phone and emails, to keep up to date with the client and monitor their situation. Sometimes, I feel like I've established a very good relationship with them, then the inevitable change of plans starts to rear up, then they disappear.
Like you said, maybe it's just a numbers game, and 6 leads a year is not enough to reap the rewards from.
Is there a reason why people think my name is Dave?
Whoa!, sorry Mitch!!
I think you got it Mitch! It's all about internet marketing these days!
I think you got it Mitch! It's all about internet marketing these days!
It depends how the leads are generated too. And how many people get a crack at them.
I'm a realtor that made 180k last year using leads I gererated myself, in much the same way that the leads for sale from lending tree and the like are generated, only slightly tweaked. I have a team with 3 buyer agents whom I supply as well. (I hired one because I got so many in an area I wasn't working...)These are good leads that I've relied on for 5 years and built my business on. My best buyer agent just did 100k in his first 6 months.
These are good solid leads and if anyone is interested in buying my out-of-market leads I'm happy to chat with them about it. I can also generate leads in your area on a per-lead basis, cheap too...
I'll even supply the script I use to book appointments and pre-qualify. I'm not a company specializing in lead generation, just a Realtor like yourselves looking to diversify my income.
Currently I book one appointment for every 5 new leads that come in. 1 in 10 close. My buyer agents do roughly the same, though closer to 1 in 20. Anyone else willing to share their numbers?
I'll even throw in some free coaching if you're interested. email me if you want more information. Comments welcome!