If America’s real estate agents and brokers had to build their business on online leads, they would be out of business. On all accounts, online marketing and lead generation tactics over the past decade have left brokerages with lighter wallets and little to show for it.
Recently, the world’s largest real estate organization, REALOGY posted that they had generated 1.56 Million leads over the past 6 months for 239,000 agents. It is not really fair to double that number and annualize it to 3 million per year because November through January is a pathetic lead generation period. Regardless, even at 3 million leads per year, that equates to about 1 lead per agent per month.
Consider the millions of dollars that piled into generating those leads and you will soon observe that this is an ill-fated strategy for real estate. Consider the broad and recurring observation that fewer than 50% of those leads are ever responded to and you track toward a keener understanding of the effectiveness of online marketing. Move down the funnel even further and look at the lead to close ratio of 100 to 1 and you begin to realize just how off track our industry has become.
Online marketing is a drag on brokerage and franchise resources and does not provide ROI for outcomes.
Don’t get me wrong. I strongly believe that consumers should have access to real estate listing information online. I strongly believe that the source of that information should be based upon MLS data (accurate, timely, detailed). I strongly believe that behind every listing should be a responsive and informed professional real estate agent.
There is no doubt that the purpose behind online marketing is seller driven. Sellers believe the hype that online marketing sells real estate. Somehow, our industry has failed to promote the MLS, and cooperation among real estate brokers as the true source of generating maximum exposure for property marketing.
Why aren’t we publishing seller reports about the number of times a listing appeared in an MLS search result?
Why aren’t we publishing seller reports about the number of times a listing detail page was viewed in the MLS?
Why aren’t we publishing the number of times an agent, representing a buyer, inquired about a listing?
Why aren’t we publishing the number of times a property has been emailed to buyers from the MLS system?
Brokers are failing to communicate the reality of real estate marketing to sellers, and most MLSs are failing to support their brokers in providing information about the MLS as a marketing source.
I respectfully disagree with the premise of this blog post and am delighted to report that we have already closed over 100 deals in 2013 from Internet leads!
Website leads CAN make a huge difference in a local real estate business. My personal production has more than doubled as a result of website leads. Additionally, once you close a website lead and do a good job that turns into referral leads. For a national franchise that gives leads to all their agents who are not trained then I can see how the leads result in little ROI. Even for those franchises that provide lead follow-up training they may not get good results. But for those individual agents who diligently and relentlessly follow-up with leads – there is an upside and it can be significant. There are a number of brokerages around the country that are realizing the fruits of their labor with website leads.
An internet lead’s value can be based on the way it was acquired. I personally will never buy leads from places like Zillow when I have my own website that can generate it’s own leads through local seo.