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

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.

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

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

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!

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.

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.

Reply real estate is a terrible scam.  If a rep calls you -run!  I wish I did my homework before I signed up for this money sucking worthless scam.