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Lead conversion and changing lead definitions

One of the ongoing themes at the Inman Real Estate Connect conference was how to turn and Internet generated lead into closed deals. While in the past there had been a huge emphasis on simply generating more leads, it is now on how to turn a lead into a closed deal. I heard several people say, "My company is generating hundreds of leads per week, but we don't know what to do with them." There are two approaches you can take to this problem.

Improved lead generation:

There has been way too much emphasis on the quantity of leads generated as opposed to quality. This was particularly evident among lead sellers where quantity directly correlated to profit. People need to step back and say, well maybe I'd rather have 2 great leads a week than 20 low quality leads. Change your web site or lead generation mechanism to filter the leads for you.

Don't use forced registration to generate leads, period.
Encourage the consumers to contact you as opposed to you having to contact the consumer.
Focus on making your site a "destination" that will draw consumers back repeatadly as opposed to a single visit. Build trust throughout the sales cycle, and make them want to work with you.
Realize what part of the sales cycle you want to target and design your site accordingly.

Improved lead conversion and incubation:

The other approach is to capture lots of leads and then put the systems in place to improve the conversion rates. Rapid followup is key with 45% of consumers expecting a personal (not an auto-responder) follow up within a half hour. In most cases a consumer won't be ready to buy right away, they are just looking for information. Several years of lead data from WhyNotOwn.com showed that the average consumer took 115 days from contact to making an offer.

In todays model most consumers that aren't ready to buy/sell right away almost always get ignored. That's a lot of leads going to waste. Conversion rates can be increased by putting in place some type of lead incubation system, where leads are tracked throughout the sales cycle and routinely followed up. These follow up methods may include emails, newsletters, automated home searches, drip campaigns, phone calles, etc. This strategy often requires quite a bit of investment in the systems to do it properly, but the results can be well worth it. One of our strategic partners, Most Home provides an excellent outsourced lead management solution for brokers that includes this incubation and followup.

Posted by Matt Heaton on 07/30/2006 02:09 PM

Comments (18)

lead management, lead generation, inman, real estate conference, real estate industry, inman news

18 Comments on Lead conversion and changing lead definitions

JUL

2006

There was actually some dispute on forced registration for IDX searches. The Crockett Team DOES use the forced registration, and they were very firm on this stand.

Email lead followup with drip campaigns was also not something that all agreed on. Some said absolutely NOT, others said they use it as part of their overall strategy.

ALL said that phone calls are necessary at some point in the process.

My experience is that well-written drip campaigns do elicit responses from the consumers, and many do take 6+ months to turn into actual clients.

As soon as I get someone who has registered to get IDX listings on my website I call them and send them an e-mail. I then put them into my database where they get contacted on a regular basis. That closes deals...period... ;-)

JUL

2006

Don't have an incubation system in place at this time, it will definitely improve my business. I have lots of leads and pre-approvals that I don't get to touch as much as I want to. I do have a mailing system where once they tell me that they are going to wait, I send them a letter including one business card for their wallet and a business card magnet for their fridge. It has worked for me in the past. Always looking for new ideas to better my business.

I believe there are 3 things your website has to have in order to successfully do business on the www.

First and most important, consumers must be able to find it whether via a search engine, print media ad, business card, sign rider, or other media form. You can have the most wonderful website in the world and if it can't be found no one is going to do business with you from it.
You must deliver compelling content to make them stay on your site once they find you. Consumers want to see all the homes in an area, schools information, things to do in a community, mortgage information, relocation information, and things like that. Finding what they consider useful information will not only keep them there but cause them to return.
You must have compelling reasons for them to contact you and do business with you. Access to all your area listings with an easy e mail link for more informatio about listings they're interested in, relocation packages for out of town buyers, home selling tips, and other items will cause them to contact you.

SEP

2007

I had a website without forced registration and I never received one lead from it. Now that I have forced registration it kind of weeds the looky loos out. I agree that the better the content and more information you have on you sight the more likely people will stick around.

OCT

2008

I tried non forced registrations for about a year. It was fine when it was just myself as the Agent. Once I added the forced registrations my life went crazy! I went from a lead or two a week to 4 or 5 per day. My sales also went through the roof!

Over the past several years I developed The 100MPH Marketing System which is a lead conversion system. Getting leads is the easy part, converting them to sales is an art! We have been able to do that and I share that info at The eHomes Realty Network to all my members.

The big and the little of it is if you have forced registrationis and a good conversion program, you will receive many more sales than if you have non forced registration. This is a business and it's all about numbers. The more leads we have, the more opportunties we have to help a consumer buy a home. It's strictly numbers to me. If I spend x amount on traffic, I will convert x amount of leads and the x amount of sales. Very predictable!

In the end, whichever program you use, you need to commit to it. Nothing works overnight and it takes time to build a system. I've been using my systems since 2002. I haven't taken a lead since 2004 and I still give away several million dollars in customers since I don't have time to take care of them right now.

Work hard, have a great system, and stay committed. It's that easy!

OCT

2008

I have been using these prinipals for years. with ny blog I get a lot of traffic but I don't spend any time "capturing leads". The folks that come to me are the best and ready to buy or sell now. I don't waste time chasing weak leads.

Matt, my data just does not support non registration sites. Since you posted this before I was on Activerain, perhaps you have changed your mind.

I have 42% closings on my required registration site, 1 on my non registration site, and 0 on my other 2 sites where people can look at ALL The listings for free.

We have the same follow up on every site, but if they don't have to register with email AND phone number we can't convert at the same rate.

Matt, my data just does not support non registration sites. Since you posted this before I was on Activerain, perhaps you have changed your mind.

I have 42% closings on my required registration site, 1 on my non registration site, and 0 on my other 2 sites where people can look at ALL The listings for free.

We have the same follow up on every site, but if they don't have to register with email AND phone number we can't convert at the same rate.

Matt, the folks that register on my site have a higher rate of conversion than the sites I have that require no registration. Perhaps this is an old post and you have changed your mind. I know it is different for some folks, you either love it or hate it, but the conversion rate is higher for those that register.

Missy - I totally agree. I have been doing this for almost 7 years and 98% - 99% of our business comes from the Internet and our lead generation and conversion programs. It's not the leads you capture but the leads you convert to customers for life that counts. Currently our systems weed out the long term leads and helps us concentrate on the short term leads...however both are equally important. Because of our conversion systems, we have been number 1 in the county in buyer transactions out of 500 companies. If we didn't force registration, I would be out of business by now.

Forced registration is a sure-fire way to qualify your leads. If they're willing to give up their contact info, then you have something on your site they want. These are easier to convert (usually).

The trick on the soft approach is give them a reason to opt in. If you don't do that, then you don't have anything worth trading for (information: theirs vs yours).

If someone opts in, think about it, they've just bot something.

I think you are write about some leads being ignored. Most people online start out earlier. It is very important to call if you can or set up a drip campaign to keep in touch.

I believe that whatever means we use to get contact information on our prospects - the secret lies in the language we use when we communicate with them.

Sure, automated drip systems will deliver closings in a "numbers game." But if you want to increase the conversion, you must learn how to coax these "agent phobic" clients into trusting you. I have started a conversation on a new blog called Unlock The Talk. Check it out and let me know what you think.

OCT

2008

Hi Matt,

Great post! I agree, I've been guilty of ignoring leads that might not be planning to do anything within the next 1-2 mo. Although your point that "they are being wasted" really hit home today - maybe it's the market affecting my perspective :).

At the end of the day, I think you're right - quick and rigorious follow-up is a requirement. Consistancy and good old sales techniques to show value add and consumer benefits - otherwise "we" are just another website.

Best regards,

Mike

- Becuase many of these "leads" are still maturing, I'm decided to go back to all of them to re-cultivate a relationship and find out who is still up for grabs.

Mike - It's very important, if you are going to work Internet leads, that you have a system that includes both email and phone follow up. I teach the 100MPH Marketing system through The eHomes Realty Network.

If you have any questions about converting leads and what it takes, feel free to contact me. I have spent the last 7 years perfecting our systems to increase our conversion rates. Currently, at my brokerage, we are closing 1 out of 22-24 leads. However, the best part is that we are actually showing 18% of our leads homes. If the market was better, we would be closing over 10% of our raw leads. It's very exciting. Like I said, if you have any questions on what you should do feel free to call me. Anyone who has talked to me will tell you that it's not a sales pitch to join my Network. Everyone who joins my Network joins so they can use all my systems that I spent a small fortune developing.

NOV

2008

Hmm, this is big debate. I use a non forced registration and generate close to 120 leads per year on a site which pulls in 10000 uniques visitors per year. Of those 120 leads 14 were closed deals. That's a about 11.6 percent lead to deal conversion on non forced registration.

This holds true for other agents I work with.

However, I have new client who uses forced registration, he received over 400 leads in a year, and did 2 deals, with a site generating 8500 unique visitors. I went thorugh every leads form, much of the leads enter incorrect data and false information. Making the lead a complete waste of time. They just wanted access to the information. The results was he did not follow up with his good leads because he wasted time on the bad leads.

I guess the question here is what would happen to my 10000 uniques visitors on forced registration. Would I see the same result, increase leads that stink. And even if they do stink, would I be able to filter through to make 2 or 3 more sales over 14. 3 deals in our area would be another $10000 in revenue.

I think the only way to know is to test it.

I've been following the debate, and here is what I think. I tried forced registrations and did receive a few sales from it and the leads were definitely stronger. With that said, if I had 10,000 unique visitors I would produce 1,000 - 1400 leads. Our conversion rate is one sale out of 22 leads. Therefore, using our conversion program, we would close between 45 and 65 sales.

Here is the problem. Most Agents and Brokers do not have the systems in place to convert leads to customers. We have been doing this for just under 4 years in my office and for 7 years total.

This year we are averaging showing 8 different buyers per Agent per month. However, they are only selling homes at 1.5 out of 8 right now. Of course in Brevard County Florida we are considered one of the worst markets in the county. We know that once we start bouncing back, our 8 buyers per month will produce at least 3 or 4 sales per month. This will bring our conversion rate from almost 5% to around 12%. Not bad for raw leads where half don't produce a phone number.

In the end, a strong conversion system is what this game is all about!

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