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Open Debate: Lead Gen Sucks? You Make it Better.

We’re reaching out to the Active Rain community to hear what you want to see in a lead generation program. We’ve been providing marketing services to real estate agents since 2001, and feedback from our network of thousands of real estate agents helps guide our product offerings. We offer a variety of marketing programs to meet the marketing needs of individual agents, and you have the opportunity to influence our lead generation products.

If you could control the manner in which you purchase leads, which features would you like to see? What would you change about your current lead generation programs?

Lead-Buying Controls
1. Pricing
2. Geo-targeting
3. Budget caps/lead volume controls
4. Starting/stopping ad campaigns
5. Cancellation policy
Lead Quality Controls
1. Contents of a lead (name, phone #, etc)
2. Lead validation
3. Credit policy
4. Lead scoring/ratings
User Interface Functionality
1. Viewing & managing leads
2. Reporting
Customer Service & Account Management

We appreciate all feedback, and we look forward to hearing from you.

Click on the links below to learn more about the suite of Reply! lead generation products. For lead volume estimates and/or questions about each product, please contact Addy Behrouzi at addy@reply.com or 925.736-8149.

Reply! Real Estate makes lead generation simple to use for even the busiest real estate professionals. Within 5 minutes you can set up your account and begin receiving leads. In 3 easy steps you can pick the areas in which you wish to receive leads, how many prospects you want to receive monthly, and you can even track, manage, and follow-up with all your contacts. You ONLY pay for valid leads, and you will always have 72 hours to return a lead with invalid contact information.

Realty Now is a great solution for part-time agents who are new to lead generation. For $99.95 per month, you can preview all the leads in your area prior to buying. Pick the ones that you want, and only be billed for the ones that you pick. Best of all the month subscription fee gets you your first 5 leads for free. All leads thereafter are only $19.95 each.

Reply! Lead Marketplace: The Reply! Lead Marketplace is our newest product, and we place control in the hands of the Realtor. The Reply! Lead Marketplace system uses dynamic, auction-style pricing, which allows real estate professionals to choose the price they’re willing to pay for each type of lead. Learn about the additional controls at www.Reply.com.

Posted by Reply.com Marketing on 07/17/2009 06:39 PM

Comments (28)

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28 Comments on Open Debate: Lead Gen Sucks? You Make it Better.

JUL

2009

In Idaho, we are not allowed to pay unlicensed people for leads and can not pay "bird dog fees". Our laws are very strick about "fee splitting". I have received dozens of calls asking me to accept leads from REPLY.com but have never gotten past the potential legal issue but until I get a written statement from our real estate commission, I can not accept the leads. All I have ever gotten is either "everyone else does this"; we have done this in nearly all 50 states and never had a problem; or we will look in to it and get back to you.

A few days later, yet another lead I can't accept, then someone else the next week, etc.

What I would like is a statement from our real estate commission that your business model is acceptable in our state.

I would prefer a "pay for the referral upon closing" system. I don't understand why that would be so difficult to set up.

My major beef with your company was lead quality controls. When promised that contact information will have been validated, it is simply a violation to forward leads with a non-working phone number and invalid email address. Offering a credit when it happens is bogus. Do not promise quality and then say "it slips through the cracks."

A company either validates contact information or it doesn't. Period. A computer can verify that a phone number has 10 digits or that an email address has a someone@somewhere.com format but that is not validation.

I see in this post you are offering credits for invalid contact information. Perhaps since June 3 Reply has stopped stating on the phone in the "Validation Policy" section of the Paricipation Agreement it verifies before forwarding a lead. One can hope!

I think the biggest challenge for lead generation companies like yours is the ability to determine the readiness and willingness of the leads to move forward with an intent to sell or buy. Too many people input information into the internet and then forget that they did so, or are no longer inetersted.

That said, I think that having a referral fee upon closing system would be much better that the system that you have now. The price for the leads you provide is astronomical compared with the actual close rate that many seem to be getting...which is close to zero....

Kris,

I'm with you! I have told countless lead generation companies that I would be more than willing to pay a referral fee upon the closed transaction but no takers.

Also, I get sick & tired of getting calls from sales people reading from cue cards or some other form of script. Talk from the heart people and if you can't, do something else because it's like talking to a freaking machine and I won't do it. Reading from scripts has got to be one of the most terrible ideas ever in sales. Know your product and most of all, believe it in and then you might just convince me that you have a worthwhile product.

I still say HouseValues had the best model I have ever used until they screwed it up. I made so much money off of that system that I considered doing something like that myself locally.

Lastly, stop making promises you know will never happen. You CANNOT guarantee I will close any certain number of leads.

That is all (for now).

What I want to see with REPLY is a press release trumpeting your BK. Oh, and I am tired of the BS your sales people spew.

A commission check on a real estate sale can be thousands to 10s of thousands of dollars. If Reply has a good source of quality leads then Reply should get in the RE business and close these sales!

The best leads are the one you generate yourself (from your websites, online presence, or any other lead generation that you own and control), that way when you reach out, the home buyer or seller (lead) as an idea of who you are and is kind of expecting your call/email

Of course the best leads are the ones that we generate from our own website and marketing efforts but what happens when we aren't creating enough interest from our own marketing efforts? Do we resort to shopping carts, post cards, bus stops and classified ads - all of which are inherently immeasurable or do we take an approach where we invest in figuring out how to make the Internet work for us to acquire new business.

Honestly, I am shocked by the responses and lack of innovation in approach. Given the macro-economic situation we all find ourselves in, I would think all of us would be willing to experiment, invest and try new ways to acquire business and grow our client list.

Furthermore, why would Reply! take the risk of "paying for the referral upon closing" when clearly many of us are not working leads hard or investing in making lead generation work.

Mike

Jim - Thanks for the feedback, and this is a common question we get. While the law varies in state to state, usually if a company takes a referral feel or percentage of the commissions after the deal closes then by law that company would be required to be licensed as a Real Estate Broker. Purchasing leads, however, falls under advertising which is charged the same way it would be if you pre-paid for an ad in the newspaper, purchased clicks from any of the search engines, or bought a radio placement. In the latter scenario, you simply pay a pre-agreed price for that service. Whatever you earn in the form of commissions from that service is yours to keep.

A referral upon closing program is much more sensible. We tried Reply Real Estate and got poor quality leads that didn't turn into anything and had a very hard time getting our money back for them.

I think you must be incentivizing your staff and pay them based on how many leads they sell, thus they are very hard to work with when a lead needs to be returned and refunded. Why not change your structure and pay them a commission upon a closed transaction? Then they are incentivized the same as we are.

I used your porduct for a while and was really unhappy with the quality of the leads. I am with most of the folks here who say we should pay as part of a closing. If your leads are that good then you should do really well

Kris, Russell, and William – I agree that a referral fee provides the lowest amount of risk to be part of a lead generation program, but how would you suggest we track it? I would ask you, how much would you spend per closed deal with a 25% referral fee? Let’s say the average commission nationwide is 7k, by my math that would be $1750 per transaction. What if you looked at it a different way? What do you think would be the worst possible close rate that you could have by purchasing on line leads 1/25, 1/50, 1/75? Let’s assume its 1/50 (2%) – meaning that only 1 lead out of 50 ends up in a transaction. You could simply bid $35 on that lead through our platform www.reply.com , and still close a sale for the same price that you would pay for a referral fee. If only 1/75 (1.3%) close then you could simply bid $23 per lead and still get the same result at the end of the day. The upside is that what if your close rate was 3%? 4%? 7%? There is significant upside that is not there in the referral fee model. With this program we give you all the controls to make it profitable for you. The reality is that every agent will have a different close ratio - some low, some high. But from my perspective this offers something that very few advertising products offer out there. Once you know your individual close ratio, you can determine how many lead sales you can get next year simply by deciding how to purchase more leads. ________________________________ Adam Carabetta Director, Retail Real Estate Operations [E] Adam.Carabetta@reply.com [P] 925.983.3396 [P] 925.457.2061 [F] 925.476.0323 Reply! Inc. 12667 Alcosta Blvd., 2nd Floor San Ramon, California 94583 www.reply.com

Adam, each time an agent that had signed on with you received a referral that led to a transaction a form could be submitted, just as we do with any referral. Then, upon closing, you could be sent a copy of the HUD1 along with your check for the referral fee.

Think about it: You want us to trust that the leads we are purchasing are "good" leads (ready, willing and able consumers) yet you don't want to trust that real estate professionals won't do the right thing by keeping you in the loop for a paid referral fee upon closing...

Also, I tried to comment earlier on your Realty Now link and what I saw when I delved further into it, but the code was incompatible upon copying and pasting the information from your site..

On your post above it states that the Realty Now feature is free, and an agent would only pay for the leads they wished to pay for. Yet on the website when you go deeper in to it, it says there is a $95 per month membership fee.

You wanted suggestions: Be transparent.

That's all we ask. No hard sell, no sugar coating, no hidden costs. Be transparent.

The title sums it up best, Lead Gen Sucks!

Lead gen sucks for everybody. If you are selling coat hangers, or selling real estate it sucks. I applaud you folks for putting this out to a public debate.

I like some of the others in the string have used your service, without much success, however each time I sent a lead back I was promptly credited. I think we are all looking for the silver bullet. Absent the Lone Range I don't think any of us have it.

Anyone who thinks a consumer is only giving buying or selling information or signals to one "provider" via the net is kidding themselves.

Again kudos to Reply for encouraging a transparent debate!

Leads that have been around the block several time, ie resold several time before it gets to you. Alan Murry

Alan - If you are after exclusive leads, you can do that in the Reply! Marketplace. You also have many filters and customization tools that you can implement. Visit www.reply.com or call (925) - 983-3400.

I signed up for about 4 days with them a few years ago, and their home valuations they automatically sent out where the worst thing ever -- using condos as recent sales for single-family homes, etc., totally off base. They even admitted they had issues AFTER I signed up. I found this company to be dishonest, full of hype and totally incompetent when I interacted with them. - Chris Olsen

Chris - It's unclear your post the specific issues that you had, but they sound like it was a technology problem. This was many years ago, and I'd like to think that surely every company is going to have hiccups along the way. I don't know that 4 days on any program can give you an accurate assessment. Nonetheless if I'm wrong or if there is other details that you have I'll include my email address below.

A commission check on a real estate sale can be thousands to 10s of thousands of dollars. If Reply has a good source of quality leads then Reply should get in the RE business and close these sales! Chuck Capan

Chuck - We are not in the Real Estate selling business. We are in the business of providing marketing and advertising solutions to Real Estate agents, auto dealers, etc. Since we advertise nationwide, we can do it more cost efficiently than the average broker or agent.

________________________________

Adam Carabetta
Director, Retail Real Estate Operations

[E] Adam.Carabetta@reply.com
[P] 925.983.3396
[P] 925.457.2061
[F] 925.476.0323

Reply! Inc.
12667 Alcosta Blvd., 2nd Floor
San Ramon, California 94583
www.reply.com

Kris - I didn't think about that when writing that teaser for RN. I agree with you, and the blames on me. Thanks for brining it to my attention and look for a change shortly.

In terms of transparency you could not be more right and the reason we wanted to have this discussion, I guess it boils down to how each individual defines good.

Does good mean they: Returned your call? Set an appointement with you? Bought/Sold a house with you? Liked you? Disliked you and bought a house from someone else? Were buying a house, changed their mind? etc.. From my perspective good would mean that you made more money than you spent in both human and financial resources. For example if you spent 5k, but earned 20k and 9 out of 10 leads were "bad" could that be defined as success?

I don't know that we will have answers today, but just some things to think about.

Cathy - I couldn't agree more with that. However, the problem then becomes, how do you drive traffic to your site? And if you do have traffic how do you ensure that you only get traffic from people in the areas that you serve? If you advertise on Google, chances are that you are paying for clicks/leads that are outside areas that you cover as Google the best you can focus on is DMA vs. a city or even a zip code. If you want a solution for this, we have a click product as well where you can drive visits to your sites of people who 1.) have searched a RE keyword online and 2.) has submitted their zip code. With this product, you can control the messaging and generate your own leads. Visit www.reply.com for details.

Adam,

Thank you for asking for our feedback. I too used your services. I loved the idea of you doing all of the marketing online while I just got the leads. RE/MAX has Leadstreet and I treated your system the same way. Quickly responded with an email and phone call. If there was a mailing address, I mailed a card with my business card. So even though I got several 'return to sender' or 'no such name', I was not issued a credit.

I did like that there were no contracts. So that you know, all the leads that I got were alright. It was your typical online leads. I found some that were already working with an agent. I found some that were bogus real estate investors.

I would have liked to see the leads scrubbed a little better. I did close on one so it works but there could be something you could do to make the leads better quality. Perhaps ask more questions?

On the topic "pay at closing"

I like this idea and Kris made some good suggestions. I don't know if I would try it again but its always an option if you have money to do it.

While I am a mortgage broker so have no information about this lead company.

I can say that the pay at closing model does work, look at LendingTree. Of course, I'd assume then they would need to get licensed as a Real Estate Broker in every State. The mortgage leads from LendingTree have a fee for everyone received and then another Fee when the loan is closed. To track it, they have you send in information once a week

REPLY - Think partnership. We are all independent contractors/business people. We must invest any dollars very very carefully...especially in today's market. Frankly, none of us want to pay any more monthly fees than we already have. So here are some suggestions:

Take over the market for lead generators: Provide leads at no charge & no monthly fee, and we'll all sign up.

Take a fee after the closing. This will put you in partnership with the agent. Monitor closing %. Low closers, drop them, high % closers - give them more leads.

Fee to charge: Think like a capitalist. Charge the absolute least you can, even if it creates a loss for the short term. Get massive amounts of agents talking about your service, your leads, their income. Become invaluable....then slowly raise the price. By that point, your system is proven, you only give leads to newbies who are hungry and can prove their worth and to agents who have proven to be valuable partners.

If you need help making this happen. Call me.

I may be the wrong one to be chiming in here...but. I worked with Househunt.com for 6 years in the Nashville area, when I lived there. I had the Murfreesboro market. I payed a flat monthly fee of $495. They allowed me to split it with my lender, or whoever I could convince to pay for it, lol.

I was VERY skeptical when I signed on and they gave me a 2 week FREE trial. I snagged my first lead that very night, which was pure luck but did convince me. I had that buyer under contract before I ever signed the Househunt contract, so of course I was a believer!

On average, I received about 50-60 "leads" per week. Of those, typically only 2 or 3 were "good leads", meaning, they didn't have an agent and their email address wasn't mickeymouse@xyz.com So, out of 10-18 leads per month that were actual leads, as I call them, I would close on average 1 or 2, sometimes more, but that is an average. I was thrilled with those numbers. My first couple of closings paid for the entire year. I got so busy that I was referring many of the leads out for a referral fee.

Many of the leads could be long term and some instant gratification. I liked the flat monthly fee, one agent per territory theory. It worked well for me. I did find that many of the leads had been busy signing up with every lead generating company available, which is to be expected I suppose, although frustrating.

Househunt did not scrub the leads, that was left to me. I liked the flat monthly fee, long story short :)

If we were going to get involved with a lead generation service, I would only be interested in paying a fee at closing for the leads that actually became clients. Like many of my friends here on Active Rain, we have plenty of leads just by our activities via the internet and social networking.

I am all for giving proper credit where credit is due, but I don't see paying a monthly fee for a zip code or two to get names and email addresses that may or may not be interested in purchasing; may or may not be able to get qualified for a loan; and may or may not give us the chance to serve them.

I have heard a little good in respect to lead generation services - the hot one being Market or Growth Leader at this time and alot of bad. I cannot speak with authority on any of them.

In the market we are in we must look at our budget and try harder than ever to spend our dollars wisely. Being an old country boy, I don't like a bunch of gimics - I want the bottom line.

JUL

2009

I had reply for about 3 months and it was just too pricey for the low quality of leads. I didn't close one deal as opposed to other leads sources i pay for where the lead quality if much higher. As and agent i think paying for leads is pretty essential. However either pay a flat rate and get some good some bad leads or pay for good leads. but paying by the lead for crap wasn't working well for me.

Many of the comments mirror my feelings -- if the leads are as high quality as many of those in their industry assert, then what's wrong with taking your fee at closing. In fact because they will have to wait, it could be trreated as a referral and therefore garner a greater return for actual performance -- a closed deal.

I don't go in for purchased leads -- I get referrals from satisfied customers and networking associations. If the purchased leads companies adopted this "paid for closings" policy there would be fewer of them but with a better quality referral and higher revenues.

AUG

2009

Unfortunately I didn't think to do research on Reply, Inc's reputation and manner of doing business.

I got a call from them while on vacation. Their sales rep explained that they charge $ 54.95 per valid lead. I would get credit for invalid leads. I signed up for 5 per month and told him I wanted to get no more than one per week - because payment is due within 72 hours of getting the lead. I didn't want a bunch of charges to roll up on me very early in the relationship. He said no problem.

Upon returning from vacation I looked on Active Rain and found lots of negative feedback on them. I e-mailed to tell them I wanted out. They told me I'm in for for their 30 day cancellation period.

In the first 2 days they hit me with 5 leads, in two weeks I've been billed for SEVEN leads when I asked for a maximum of FIVE per month! That's $ 384.65 in two weeks!

They've made no attempt to honor their sales rep's representations, their only replies have said that I owe within 72 hours for any leads sent. Absolutely no recogniton of the fact that their rep agreed to the one per week, 5 per month that was agreed to on the phone.

Reply Inc., or Reply Real Estate as they go by uses misrepresentation and deception. Avoid them. It will not be a good experience.

AUG

2009

I'm not sure if SCAM is the right word, but deceptive certainly applies. They say NO CONTRACTS and pay as you go, and you can cancel anytime. The truth is that when you cancel, or give "30 day notice" as required, they continue to send you leads AND bill you for the 30 day period. It seems to me if there is no contract, once you want out of the program, the relationship should end. If I was a Realtor who has luckily not been contacted by them yet, DO NOT SIGN UP when you get the call, and sooner or later you will get the call. It is so ironic that one of their Corporate Values under Integrity Guides All Our Actions is: We conduct all business with uncomprimising integrity. NOT! Another Value is that Our People are our Foundation: Reply! cultivates a fun, rewarding, and enjoyable experience for our customers, clients and employees. I would be interested to have people post their "fun, rewarding, and enjoyable experiences as their customers. This would be a good way for Reply! to receive some positive feedback. I realize they have changed their policies since two years ago when I was first contacted to be more "user friendly" based on client feedback, but they still have some serious issues.

Regards, Dean

Perhaps we have not done a good job of detailing that we offer 4 unique products. Two are self-service (Enhanced Clicks and Reply Marketplace Leads) and for those products you can start and stop anytime and have total control over cost, volume and price.

For our other two products, we offer access to our client service team to help grow your business and adjust your volume based on what is working. For those products, we do have contracts. We are certainly not being deceptive, all of our terms of service and contracts are online and fully transparent.

We believe we have the most diverse, comprehensive and profit-focused programs in the industry.

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