Quality over Quantity

Real Estate Broker/Owner with Real Living Signature Properties

I've been reading a lot of posts on lead generation.  Everyone wants to know what works best: bumper stickers, calendar magnets, car magnets, farming, networking, classifieds, ...  The list goes on and on.  While it is true that this is a lead generation business, we need to take a minute and determine the quality of leads that we are generating.  In general terms, leads can be "scored" using the following:

  1. Are they qualified?  This can mean both financially.  If they can't afford it,  we aren't going to go look at the house.  Period.  Yes, I discriminate against the poor.  Being poor is not a protected class under fair housing.
  2. Are they committed to the process? In other words, are they EMOTIONALLY qualified?  Are they actually going to see the process through to completion? Too often we get people who are "just looking" - tire kickers.  They need a real estate LOOKSperson, not a SALESperson.  These people waste our time.  Being a jerk is not a protected class.
  3. Are they loyal to you as their agent?  If they understand your unique value proposition and you take excellent care of them, they won't go elsewhere.  Loyalty is something that is created by building rapport and trust with the clients, and can be done successfully at the first meeting (listing appointment or buyer consultation.)  Everyone has stories of "their" clients (or friends) who listed or bought with another agent.  See previous jerk comment.

The higher our leads are in all three categories, the more I'm willing to pay for the lead.  Obviously, a lead that is qualified, committed and loyal is worth a lot!  Leads that are 0 for 3, not so much.  Before sinking money into the next great lead generation system, think about the quality of the lead you're paying to get.  Is it really worth it? Only you can judge.

Comments (3)

Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

Good point, John.  Unqualified leads aren't worth much.  A prequalified referral with an introduction can be money in the bank.

May 28, 2008 12:55 AM
Melody Botting
Broker Associate PenFed Realty - San Antonio, TX
You Deserve The Best

I like this post!  The best leads are referrals.

May 28, 2008 12:55 AM
Lou Farris
Your Castle Real Estate, Inc! - Highlands Ranch, CO

I couldn't agree with you more. the quality of the lead...

I also think the quality f the character of the Buyer or Seller are equally important.

Here is a motivational tool I use: Fill out my financial statement BEFOREi will go to work for you. If I know your true financial position, I will save you time and energy in the buying or selling process. It doesn't discriminate, it isn't used for credit scoring, and it gives me an accurate picture of where the client or customer is financially. i have built ratio analysis into a simple spreadsheet, and can then determine things like: FHA financing? You bet. if they won't qualify for that, i cant spend the fruitless hours trying to hel p them buy a home. I need to point them to a rent-to-own home instead. Then I can provide tool 2: a Debt analysis and payoff worksheet. This tool tells them like a cash flow statement to a corporation how to allocate income to savings and paying off debt, and tells them how much per debt. Using this, I can get most people out of debt within 21 months. This then becomes a followup tool. I can check periodically to see what progress they are making. Face it, we are financial counselors, too. Why try to "stick them" with a place that they will lose?

I work with a lead until I exhaust it: for referrals, for business if there is potential, and for loyalty in both directions. People areen't transactions. Transactions result from honest work conducted between people.

I have gotten a lot more selective in who I will work with, and it is paying off. People I do work with now feel special, because they were part of a select group of people I chose to work with. That means they get special treatment from me. They will get a higher level of service, because they were chosen. Those who aren't a part of this group can make their way into it, because the doors are left open. If their finances are sound, and debt is managed effectively, I can work with them. Otherwise, I can counsel them (I don't charge for this part. If they can't manage their debt, they need help, to become a great client.) so they can get their financial household shored up, and once the foundation is built, we can work to purchase the dream.

I get referred to others, because of care and consideration, work ethic, and a winning attitude. More importantly, I get referred because I won't hurt someone i am trying to help. I truly want them to be successful homeowners. I never want to see them on the other side of my business: loss mitigation.

Thanks for the reminder to be more selective.

May 28, 2008 01:19 AM