ActiveRain Spoke, We Listened | Reply! Offers Pay Per Sale Lead Program

Great Feedback!  Keep it coming.

So I pay a monthly fee, then an advertising fee, then get to compete with up to 3 other agents on each lead? Is that your best deal? I don't think that is a good deal.  I agree with you that this program won't make sense for alll real estate agents.  If you are well established and your current marketing program is achieving the desired results, then I certainly wouldn't reccomend changing.  That said, there are many agents who have seen sales decline over the last couple years, and this is a way to get in front of more people.  If you selected 50 leads/month for the next year, and closed a meager 1%, that would result in 6 additional transactions per year.  The numbers can be significantly more compelling with good follow-up and a higher close ratio.

Yes, Gloria sounds bitter -- and so am I. I swore never to pay for leads. I did it ONE TIME last spring, after being sold by a firm that swore the leads were GOOD and READY to sell now. Afterward I found the leads were JUNK just like Gloria did. They came from websites promising one thing (I will buy your home!!!) and they hated the fact an agent was calling them. And I got charged for that! Returning leads or getting credit was a joke. And the 30-day cancellation policy cost me an additional amount of money, because during that 30 days they continued to send me leads and bill me for each one. I blew about $700 in 35 days. Total waste.  Erica & Gloria - I am sorry that you did not have a favorable experience with lead generation.  We want to do a better job managing expectectations and also taking away much of the risk.  The stark reality with only leads, whether generated from a 3rd party, or through your own marketing efforts is that many of the leads will not pan out into opportunities or transactions.  The internet consumer is ALWAYS less loyal, and less willing to committ than a traditional referral.  But we also know that in 2010 approximately 80% of consumers will go online to research prior to connecting with a realtor.  So does this mean that we should write of lead generation forever? Or alternatively make the math work for you.  With RealtyNow, you don't need to hit a homerun to get a very possitive ROI.  For one year of membership, it will cost you a maximum of $1200 (We couldn't even generate the leads alone for that cost with our SEM campaigns on Google, Bing, Yahoo, etc).  Even in the worst case scenario if you close 1% of the leads (which is very low) that would still net you an additional 6-12 transactions per year.  And all transactions below 150k you won't pay ANY transaction Fee!  Transactions between 150k - 4 million, you will only pay a flat 1k advertising fee.  I certainly reccomend weighing the risk to reward to see if it makes sense for you and your business.

What websites are they coming from? Then look at the sites and determine if it's a bait and switch scheme or not.  We generate 90% of our leads organically and are the largest real estate lead generator nationwide.  The vast majority of our leads come from SEM (search engine marketing) which are typically much higher quality than alternate sources like email, etc.  The three primary sites we use to generate leads are www.icastle.com, www.connectwithlife.com, and local.reply.com.

I think $1,000/transaction on a 150k sale is high. "Only 99.95/month" - where have I heard that before? LOL Cindy in Indy's service is only 29.95/month - that sounds better.  $25.95 is less expensive.  That said we are the largest lead generator nationwide and have significantly more access to leads than other companies.  We also have lower advertising fees on the back end.  Transactions below 150k will incurr no advertising fee.  Transactions above will only be a flat $1k no matter how high the dollar amount.

The suggestion by Gloria Matthews is the best: lead generation services go out of business and the leads are left to us without a middle man.  Reply! has been in business since 2001 and experienced its largest growth year in 2009, during which time many of the companies you are referring to significantly lost money or went out of business..  We work with some of the largest companies in Real Estate, Autos, Insurance, and Home Improvement.  We have signifant areas for growth and are here to stay.

For me that right there is a deal killer. If I'm paying for a lead, I'm paying for my lead. I don't go to pick up a pizza and hope someone else hasn't gotten to it first. I bought it, it's mine. Whether it's 4 or 1.5 doesn't matter - it's not 1.  I definitely understand the value that an exclusive lead represents.  However, to make this a viable business model, we need agents to close deals.  If anyone has tried to do SEM on any of the major search engines, it is definitely not cheap and could not even cover our costs with the membership fees.  Keep in mind, however, that you don't pay per lead.  You have access to all the leads that we generate so if someone else contacts the client first, then you can move on to the next.  According to some of the more recent studies, about 50% of agents never call their leads so mathematically if you are one that does, you will have an advantage.  If you are a top closing agent, after you begin to report back sales we are open to that arrangement.  Keep in mind, however, for us to make money, you have to make money as well.

Adam Carabetta

VP, Retail Operations

Reply! Inc

Active Rain Members,

Here is a testimonial that we recently received from one of our agents -  Timothy Sojka.

Colette -

My name is Timothy Sojka and I have been in real estate for just five years. This year we will sell over 100 homes and do over $25,000,000 in gross sales. I am with Keller Williams, so I am always listening and considering what Gary Keller, a true visionary has to say. A few years ago, when the market was truly terrible and many agents were complaining about their production, I was lucky enough to hear Gary Keller speak.

In his presentation Gary said if your production is down, it is not the market, it is not the economy, it is you. Gary's premise is that in an up economy or a down economy you chose to excel or you chose not to fail.

I chose to excel.

I truly understand that lead capture and lead conversion are the #1 priority for a realtor who choses to excel. We recieve dozens of leads each month through our referal base and our marketing systems. We easily do $15,000,000 in sales just from these two sources. We will nuture this business and continue to make it grow.

However, recently I have been intrigued with partners that can help us grow our business. These partners provide leads to us for a cost. These partners, like Reply! Real Estate have been pivitol to our growth.

This year alone we will do 25+ transactions through these partnerships. More importantly, many of these partners are new to our system so we forsee expanding this business significantly.

We have just begun working with Reply! and we have been thoroughly impressed. They are by far the most prolific (get us more leads than any service) of our partners. They send us 8 to 10 leads each month. Like any lead service, not every lead is perfect, however I am getting listing appointments with about 20% of the leads that come through.

Yes internal referal are important. However, each client Reply! sends me may be a future source or referals. Reply! has been professional and fair. Still more importanlty to our team we see them as an important partner in our continued growth.

Timothy Sojka

Mike,

I've heard this point a few times in the past from other Agents; the question that always comes to my mind is "how is any other type of marketing different?"  Should Agents stop paying for ALL forms of advertising?

Isn't it true that the goal of any marketing is to increase exposure?  It seems to me that in any business that the more exposure that you have, the more customers you will ultimately get. 

In today's world, consumers are shifting away from traditional media and moving online.  Consumers use our sites www.connectwithlife.com, www.icastle.com, and local.reply.com to get access to information that is not readily available through traditional media sources.  We know that consumers who submit their information online are already doing some level of research about Real Estate.  We are able to capture that intent and provide a tangible lead to participating agents.

Of course not all leads will result in transactions; in fact, most won't.  As with any advertising, the goal is to get access to new business opportunities that you would not have had otherwise.  Consider using Google to run cost-per-click advertising; on average, 50% of consumers that click on your ad will immediately back out of your site.  Out of the 50% that stay, how many will actually contact you?  25%?  10%?  5%?  That aside, let's say you had 100 clicks on your website in a month and one of them ended up transacting with you.  Some Agents might consider this success, because that one transaction probably covers their CPC costs for the rest of the years.  However, other Agents might consider it a failure, because of the 99 clicks that didn't amount to anything.  It all depends on how you look at it. 

Ultimately, only you can be the judge of what works for you and what doesn't work for you, and I'll be the last person to tell you that Reply! is better or worse than any other advertising you might utilize.  What I can say with certainty, is that not all Agents have established careers that allow them to survive on 100% referral business, and our programs, as well as any other lead program or advertising programs for that matter, are one of many options they can use to grow their business.

Adam Carabetta

VP, Retail Operations 

Erica,

My website generates a bunch of leads, and not all are good leads, or ready to go. But we work them until they either buy/sell or are dead leads. The difference is, I am not paying for bad leads.

This may be true for you, but most Agents that have a website have to pay for it.  Furthermore, it's difficult for anyone, Real Estate Agent or not, to drive locally targeted organic traffic to their site.  This means that many Agents also advertise via Google with cost-per-click (CPC), or perhaps Yahoo! with cost-per-impression (CPM), to drive more traffic to their site.  It's near impossible to accurately target traffic by zip code location through Google or Yahoo! (meaning many of your clicks are going to be from consumers outside of your DMA).  This, compounded with the fact that industry standards will tell you that ~50% of the people that click on your CPC/CPM ads will immediately back out of your page, means that for those that advertise their site, they're paying for bad leads, just not in the sense of paying for a bad lead from a lead generation company like Reply!. 

Again, I don't have insight in to what you're specifically doing to drive traffic to your site; maybe it's 100% organic traffic, in which case your website is probably inexpensive and very cost-effective.  Either way, to respond to your point about not paying for bad leads - maybe not you, but MOST agents are going to end up paying for "bad leads" regardless of how effective their website is.

At the end of the day, I'm a firm believer that leads should NEVER replace all other forms of marketing an Agent can take advantage of.  Rather, it should be a way to supplement.

Rudd Lippincott

Director, Retail Operations

Mr. Curtiss,

First are foremost, we have never offered a 15 day money back guarantee.  Secondly, your account is scheduled to be shut off on 1/8/10, 30 days from the date you requested to cancel, per the 30 day cancellation policy that you agreed to.  For everyone's benefit, I would like to provide clarity on what has transpired since you signed up with us.  Afterwards, I will be personally calling you.  We are reasonable people and ultimately like you to be successful, as we would with any other agent. 

**Details removed at client's request.

Nowhere in our notes do I see a lapse in response outside of the stated 48 - 72 hour response times, but there may have been further exchanges of communication that for some reason were not entere in to your account. 

In the event I am unable to reach you (I will be calling you right now), you can reach me at 925-983-3427 or rudd.lippincott@reply.com

Rudd Lippincott

Director, Retail Operations

If we refer leads to each other then we pay 25% or more in some cases. We are happy to do so. Why not use that business model? No monthly fee; exclusive leads; 25% referral fee on closing.

First off, leads aren't referrals so I'm always hesitant to compare the two as apples to apples.  Internet consumers for the most part are much earlier in the buying stage than a referral.  They are also going to have less loyalty than a referral as anyone would expect.  A referral is typically a client coming from a trusted source; both you and the person giving the referral probably already has a relationship with the client they're referring and in turn, the client will have a higher level of trust in working with the person they're being referred to.  If internet leads closed at the same rate as referrals, a model like that might make sense for us; but they don't, and so it doesn't.

The other risk is your suggestion on not charging a membership fee and offering exclusive leads.  Without a membership fee, there would be no reason for an agent NOT to sign up.  If every agent signed up, it is inevitable that we'd have agents sign up and never actually work the leads.  This would create scarcity amongst agents that signed up and actually DID work the leads.  Agents wouldn't receive enough leads to work each month, and in turn, Reply! would not be able to support the cost of continuing to generate leads that were never reported as sales. 

This is the model we're offering right now, because we think it works for us and you (agents).  That said, I always welcome all feedback as we're continually looking for ways to improve.  I can't think of a way to make your suggested model work for us, but appreciate the suggestion.  Some of our best ideas have come from agents like you.

Rudd