As the owner/broker of Progressive Realty Corporation in Boise, Idaho, I educate my Realtors about their advertising and marketing costs. Everyone wants leads and some sign up to "buy" them.
There are lots of ways to generate leads in real estate and it is difficult to say the exact cost per lead. You can always "buy" leads via referral sites and pay per click advertising or take online referrals for X% due upon closing. Some agents even buy targeted zip codes hoping to benefit from being the exclusive agent on a given website for that zip code.
Before doing that however, I suggest looking at the leads that you are already getting and ask yourself if you are serving the leads you already have before you pay for more. For example, if you pay $500 a month for a full page ad in a "homes magazine" that generates 10 calls a month, you are already paying $50 a lead. I admit there is some instituational advertising benefits going beyond just actual calls, but I am trying to keep it simple.
I can't believe how many agents don't have a business plan on how to deal with incoming calls. Don’t they realize all their marketing is done to make their phone ring and when it does, they aren't ready to field the calls? There should be a pre planned response for each of those calls. What are the benefits of that specific home at that price your customer needs to know about to get excited about wanting to see it?
Also you pay $X for MLS access to be able to promote your listings to other agents. Are you prepared for their calls? For example, just last night I showed a home and called the listing agent to check on why an HOA fee was so high and was told I don't know, I will find out and call you tomorrow. If they had "sold me on the benefit" of having the association take care of all the exterior maintenance including lawn care, painting, re-roofing, snow removal, trash collection, etc., that fee looks like a great value not a burden.
Do you have switch properties identified for when your property sells you don't "waste" the remaining incoming calls? For example, when I call on new home listings, I am amazed at how many times an offer has come in so the listing agent just says “Sorry it is sold”, then click – they hang up. Very few agents try to sell me on the idea of rebuilding a model that already had an offer come in or switch me over to another listing.
Do the math and realize how much it costs to make the phone ring! When it does, be prepared to spend as much time as it takes to build a relationship with the caller instead of trying to hurry up and wait for the next call. Take care of the one you already have first before you move on.
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