As the owner of a Colorado real estate company, I end up "talking shop" quite often with other Realtors®, and conversation inevitably ends up around our online business model and how our agents depend almost entirely on internet leads for getting new business. No cold calls. No farming. No open houses. Just internet leads. In response, the Realtors® I'm talking with usually say "How can you do that? I've always found internet leads to be worthless and a big waste of time." The funny thing is -- I partly agree with that statement. At face value, an internet lead not properly followed up with is practically worthless. Proper followup, however, makes all the difference in the world and can change your odds of closing an internet lead from about one tenth of a percent -- to 5%, 10%, or even higher.
We've studied tens of thousands of internet leads. Automated Homefinder has generated tens of thousands of internet inquiries in the 12 years since our inception, and we've learned a lot from our successful closings with many of those leads. We've learned even more from those who don't buy through our agents. The biggest lesson: Within the first six months of signing up, approximately 40% of the people who unsubscribe are doing so because they bought a home, or are under contract to buy a home. Let's not forget that this statistic excludes those who bought a home through one of our agents!
In other words -- when you get an internet lead, you have well over a 40% chance that they're going to buy a home within 6 months. Knowing that a prospect who signed up on the internet has well over a 40% chance of closing within 6 months of them signing up with you, does that change your motivations about how to treat that lead? If so, Your job is simple: You just have to convince them to buy a home through you vs. one of your competitors. The best way to get them to buy through you? Follow up with them early and often.
An interesting statistic from another internet company: I was at the 2008 NAR conference just last week, and I heard an interesting statistic from J. Lennox Scott - CEO of John L. Scott Realty. He said that you are 21 times more likely to close an internet lead if you call them within 30 minutes of their inquiry -- and 100 times more likely if you call within 5 minutes! At first, this seemed like a bit of an exaggeration, but the more I thought about it, the difference between our producers who sell $10 to $12 million in sales per year, and our agents who close only $2 or $3 million with similar volumes of leads comes down to one thing: Our $10 to $12 million a year producers follow up with new leads as soon as feasibly possible. I was once at lunch with one of our top producing agents, and he called two of his internet leads right then and there while we were at lunch. Since he was at lunch with me, he told them he was at an appointment, but wanted to call just to introduce himeself, and that he'd call them back to see what they think of the houses he sent a bit later.
You might be thinking "How in the world can I be expected to follow up so quickly with internet inquiries without being tethered to my computer all day?" The solution is simple: Whether you have an IDX solution with an opt-in, a direct response system (free reports, home valuation requests, etc), or something else, odds are that you are able to get an email alert whenever you get a new lead. If you can get an email, you can get a text message. If you can get a text message, you can call your new leads -- ALL of your new leads -- within minutes of them signing up.
To get an instant text message as soon as a lead signs up, all you have to do is find out what your carrier's email extension is. Once you know your "email to text" email address, all you have to do is enter that email address in your prospect alert system. For example, if you are with Verizon and your cell phone number is (555) 555-1212, your email address is firstname.lastname@example.org Here are some of the email-to-text addresses for the major cell phone carriers:
- Verizon: email@example.com
- AT&T: firstname.lastname@example.org
- T-Mobile: email@example.com
- Virgin Mobile: firstname.lastname@example.org
- Voicestream: email@example.com
- Sprint: firstname.lastname@example.org
- Nextel: email@example.com
- Alltel: firstname.lastname@example.org
In summary, if you've been in the camp of "Internet leads are worthless", and are letting those leads sit dormantly in your database because you don't want to waste any time on them, try calling them within minutes of them signing up & see what happens. If they don't answer, hang up and try calling from a different phone. I'd be willing to bet dollars to donuts that if you simply make an effort to call them ASAP, you'll see a drastic improvement in your conversion rates.
Good luck! Leave me a comment & let me know how it goes!