Returning from the Real Estate Connect Conference (aka Inman NYC), you would think that any agent or broker who is not 100% dedicated to cultivating the online customer is doomed. Yet surprisingly, nothing could be farther from the truth. In fact, if you read between the lines of a recent press release from Realogy, the global leader in size for a real estate group, your take away might be that online marketing and lead generation is a complete distraction and waste of time and money.
Headline: Realogy’s LeadRouter System Delivers Record 3 Million Online Leads to Its Affiliates in 2013, an Increase of 13% from Prior Year
About Realogy Holdings Corp.: 244,000 independent sales associates
Do some quick math and you will see that each sales associate gets about one lead per month.
This is in no way a critique of REALOGY. Their LeadRouter system works just fine, and it manages leads from 20,000 offline and online sources. That is quite a wide swath of marketing. Simply stated, lead capture and lead routing volume is not enough to build a business on. It’s not even close.
At Inman, I stood next to Ben Kinney. His “team” sells about 500 homes per year at a production volume of $100 million in a very competitive market. His secret – 50 calls and 50 emails a day. His goal for lead conversion is to close two transactions out of every 100 leads. Most agents are lucky to do one closing from every 100 leads.
Some really smart people have figured out that there is no ROI on chasing online leads, but they do it anyway because you cannot have a rational conversation with an agent or a seller about it. So many people live in a fog that makes them believe that the Internet sells homes. Nothing could be further from the truth.
Century 21 put out a press release on their website being the number one brand website for real estate traffic. Clearly, they get their share of leads that sell some homes. But what it really sells is franchises, helps franchisees recruit and retain agents, and sounds spectacular in a listing presentation.
The moral to this story is that nobody should build a business plan around building a successful real estate business based on online leads and lead conversion. Companies should be built around CRM solutions that keep real estate agents focused on customer list building, customer relationship building, and direct marketing. If a lead comes in and becomes a sale – think of it as a gift, not a result.