Ask An Ambassador: Paying For Leads Vs. Organic Results

By
Real Estate Agent with RE/MAX Elite 513.520.5305 www.LizTour.com SAL.2002007747

 

how many suitcases of this do they want?Ring, ring. 

"We'd like to send you buyers and sellers!".

Me:  So you want to sell me something?  Let's save us both some time, I prefer organic results.  Good luck with your next call.

The smart callers get it, the stubborn ones try to overcome my objection, but they're wasting their time.  I learned something their primary targets have not. 

There are multiple ways to generate business:

1.  Referrals from past customers, friends, other agents, etc. (this is probably ideal state for most of us, little extra cost and the leads are more likely to stick with you thanks to the good words of people they trust)

2.  Direct mail.  Mass numbers, and depending on your approach it can be costly.  Watch your Return On Investment (ROI), but done right this can be very effective.

3.  Organic Internet presence.  This can be time consuming and doesn't have a quick payoff, but it's relatively inexpensive.  Multiple ways to get there, blogging, Facebook, Pinterest, etc., and all are fairly cheap.

4.  Paying for leads.  It's a variant on #3 where you're paying another company to do all the work for you.  They're buying ads, developing search sites, etc., all to capture leads to point your way if you're willing to part with the $$$$ to make it happen.

For this post, I want to focus on options 3 & 4.

Every week I get calls offering option #4.  Promises to get me in front of more READY NOW MOTIVATED BUYERS AND SELLERS!!  Seriously, what real estate agent can't use more of those?  And over the years I've bit on some of those things.  The wine kiosk in the grocery store advertising us (face palm), the banner ads on portal sites, etc. None of them worked for ME.

Now the reason they don't work for ME might be that sometimes they're just lousy ways to attract business, and the other part of it is me and how I do business.

It's not my goal to close 100s of deals a year.  I'm a dual career agent so 20-30 deals a year is in my sweet spot. I can take on more, but depending on the timing life can get a wee bit stressful (for me, not my clients).  Often my patio home buyers are not "we're buying something this weekend", so it's a slower, time intensive search process until the RIGHT home is found.  Also, I'm not serving ALL of Cincinnati, but parts of it, so if I'm being funneled general Cincinnati home buyers, there's a good chance many of them want to go places that I'm not familiar with, and at price points I don't necessarily want to work.  It's a business decision, the ROI on my money AND time just isn't there.

Keep in mind, it's not how much we gross, but how much we keep that matters.  So while grossing 6 figures might sound great to many agents, if you're keeping half (or less) and that's BEFORE taxes, it might be time to reexamine how you do business or whether your profitability would be greater saying "Welcome to Walmart" every day.

So why do I like Option 3?

Done right, it actually gives me what the purveyors of Option 4 promise.  Motivated buyers and sellers, primarily to our low maintenance living niche.

Our PRIMARY path to success in Option 3 is twofold:

1.  Blogging (especially to our niche)

2.  Creating custom IDX pages.

Blog posts drive people to our IDX pages, put some humanity out there, give us the opportunity to frequently generate new content, etc.

The custom IDX pages give searchers details that match EXACTLY what they want:  Patio homes for sale in Mason's Heritage Pointe,  New Construction Patio Homes in Cincinnati's ONLY 55+ community,  etc.


Sprinkle in some Pinterest, Facebook, etc. for some extra oomph.

We've heard it more than once, potential clients like the fact that when their Page 1 search results find us:we're human, and we have pets

1.  We're NOT Zillow or Realtor.com or some other company, but PEOPLE.  REAL PEOPLE. People with pets :)

2.  "We found you EVERYWHERE!".  The REAL power of niche blogging is you establish an extensive presence, and you're probably hired before they ever reach out to you.  That's the juice in claiming multiple spots on Page 1 for your key terms.

So the net result is our contacts are more likely to be closer to actually making a decision.  They find key information about the wheres, whats, hows and how muches from us and recognize the expertise.

And the other beauty of it?  It's inexpensive.

Blogging hasn't cost me a dime in years (thanks ActiveRain!) other than the renewal cost for a couple of domains for our ActiveRain Outside Blog (ugly looking, but still effective).

Our Wordpress site?  Themes and framework are fairly cheap, as is web hosting.  I pay for a few plug ins here and there, so my major montly expense is IDX Broker (Platinum version) at $59.99 per month.  It's a pittance for what it generates in clients.

Bottom line, most of the effort for option 3 isn't money, but TIME.  Learning a niche, learning enough about setting up a Wordpress site to get it done, creating IDX pages, and continuing to stay on top of changes (SSL, EU security, etc.).

The net is my ROI is decent for the work I do.  We keep more of our gross than we did a decade ago, and I'm not having to spend a lot of time chasing paid leads and trying to turn them into clients.

 

I KNOW there are plenty of successful agents and teams that LOVE paid leads via Z or whatever their lead generator of choice is, and more power to them if it makes sense for them. 

As for me, I'll take Organic Results for $2000 Alex.

 

 Until next Tuesday, just Ask An Ambassador if you need help!

Bill of Liz and Bill aka BLiz

 

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Serving Warren County Ohio & Adjacent Areas

 

The Liz Spear Team of RE/MAX Elite
Elizabeth Spear, ABR, CRS, Ohio License SAL.2002007747

William (Bill) Spear, CRS, Ohio License SAL.2004011109  Kentucky 77938
Ask for us by name if you visit the office!

EHO Two locations: Lebanon & Mason, OH
Bill Direct:  513-520-5305
Liz Direct: 513-265-3004     
Fax: 866-302-8418

MailTo:  Liz@LizSpear.com

Search Homes:  Https://WarrenCountyOhioRealEstate.com

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Rainer
21,209
BIPIN CHANDRIANI
Coldwell Banker Preferred - Exton, PA
For All Things Real Estate!

Bill,  Amazing blogs as always. Educational and re-inforcing well known ideas. I got to start writing!

 

Sep 18, 2018 08:01 PM #16
Rainmaker
222,036
Janice Zaltman Realtor, LEED AP
United Realty Group - Boca Raton, FL

Thank you Bill. Perfect timing. I keep meeting agents that are spending small fortunes for leads in zipcodes. They mainly work buyers. If you are a listing agent primarily, then your above strategies are priceless. ( well, almost priceless!)

Sep 18, 2018 08:19 PM #17
Rainmaker
1,521,521
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

I couldn't agree with you more. And I love the picture of your pups!

Sep 18, 2018 09:24 PM #18
Rainmaker
1,414,903
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

There are many ways to get leads. The ones that come from referrals and internet contacts are fantastic because they don't want "an" agent, they want you!

Sep 19, 2018 04:00 AM #19
Rainmaker
213,634
Nick Bastian
Realty Executives - Tempe, AZ
Real Estate Agent - Tempe

Hi Bill,

I like the post and the concept. 
Just curious. If playing the seo game, wouldn't placing a link (with good anchor text) from this post to one of your sites that you are directing consumer traffic to for Cincinnati Patio Homes be beneficial?
Niche markets are awesome! I wish you continued success.

Sep 19, 2018 06:20 AM #20
Ambassador
3,936,259
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

You won't get any arguments from me on any of the points you made. An organic presence and referrals (agents, my sphere and past clients) works best for me. I love the opening line - are you stil in real estate OR are you accepting new clients.

Jeff

Sep 19, 2018 12:59 PM #21
Rainer
274,649
Derrick Guevremont
Counselor Realty of Rochester - Rochester, MN
Rochester MN Homes for Sale

I have tried buying leads but have had limited success.  Now I pay very little after being suckered into some bad programs.  I depend on my referrals and cannot afford to let people down.

Sep 19, 2018 01:07 PM #22
Rainmaker
665,131
Laura Filip
Laura Filip Broker , Opening doors for All Seasons of Life - Whitesboro, TX
What can we do for you today?

WE all get calls on how they can give so much to us .... the cost is only a 250 a month. .... and then they want a 30 percent or higher referral fee. 

I wont go into to much detail at this time but I agreed to pay 3k for a lifetime membership and then pay 30percent referral fee ya I know crazy right.... but today received a call saying they are changing thier plan and now we have to pay 250 a month plus the referral fee. 

AHHHHHHH what is how my reaction to this one was. So let's see what they do and how they react to my loud NOOOOOOO. 

So far when paying for the lead it really does not work out at all. All that happens is the other party gets rich.... Just my thoughts 

Sep 19, 2018 02:23 PM #23
Rainmaker
2,189,507
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

I think the thing with Z is most agents have no idea how it operates. You don't buy zipcodes alone. That in itself is a bad move, and if that's what agents are doing, they won't get many qualified leads. Z is much more organic. You need to have a strong presence on Z, a good profile, many excellent reviews (I have over 220 reviews, a long history on Z (I have 12 years -- present at its inception). Then you need a good website of your own because they will check you out. I get many listing leads from Zillow and have been told by Z that 50% of its "zipcode buyers" don't even answer their cellphones when buyers call. How terrible is THAT?

Sep 19, 2018 02:37 PM #24
Ambassador
3,802,927
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Bill- glad that you shared this post because I'm sure there are many who are tempted to pay for leads and don't understand that it takes time and consistency but the organic leads are best. 

Sep 19, 2018 05:32 PM #25
Ambassador
3,228,083
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Agreed 100%, Bill (of course)! 

I will say that I used listing pages for several years and even though I got tons of leads from it, it was more of a 'website' that I was able to mangage. My clients were set up in there as soon as they said they were ready to look at homes. The communication was primo with that site and I will never be able to duplicate it!

That said, the bulk of the business is repeat and referrals and I'm with you, organic all the way!

Sep 19, 2018 07:34 PM #26
Rainer
1,950
Michael Ondrejko
Taxlesshomes - Wilmington, NC
Property Specific Marketing For Agents

We echo many of the sentiments about "paying" for leads.  I think it is important to qualify what constitutes a lead.  We TaxLessHomes provide the only property specific direct mail campaign for agents that identifies homeowners who are paying a disparate amount of property tax to like comparable properties.  We run thousands of calculations per property to identify these overtaxed properties who are ultimately homeowners, and thus "leads."  We call them leads because you are demonstrating your local market expertise to a homeowner where you can provide true value.  Why are they a lead?  Because you have something to offer them, for free.  How to reduce their property taxes.  To clarify, send me something relevant and you have my attention.  Send me another mailer on curb appeal and it goes in the recycle bin.  

Sep 20, 2018 03:49 AM #27
Rainmaker
229,558
Dale Taylor
Re/Max 10 New Lenox Illinois - Frankfort, IL
Realtor = Chicago Illinois Homes Townhomes Condos

So important to pay close attention to how much we are spending on marketing vs. what we are really netting. Thanks

Sep 20, 2018 04:43 AM #28
Anonymous
Marvin Shelley

Here's stepping on some agent's toes. When agents starting buying "leads" from Z.com, all they did was feed the monster. Now, Z.com has become T-REX and is gobbling up business to list and sell and get dummies to pay them more. And, Z.com has now bought out a LENDER. There will be dramatic changes in the RE world soon and all because agents fell for the "buy leads" monster and keep feeding it their money month after month.You'll get what you paid for.

Sep 20, 2018 04:50 AM #29
Rainer
28,737
Chuck Tanner
Keller Williams Realty - Atlanta, GA
Associate Broker "Let's Get You Moving"

Bill and Liz I love this post so much that i'm going to catalog it to re-read and re-read. I've spent so much in expenses that it makes me angry. I have cut my expenses to a bare minimum. I have a feud going on with Zillow at this moment. They promised me 19.2 scrubbed leads per month but have not delivered on their promise. They basically just want me to shut up and pay. I would warn anyone before signing up with Zillow not to believe what they say on the phone, ask for their promises in writing. They can promise you the moon when selling you but the contract you sign says otherwise. They have verbiage in the contract that basically says if they don't deliver what they promised you still have to pay them. Great post and advice!

Sep 20, 2018 05:18 AM #30
Rainmaker
426,906
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Good morning Bill, I completely agree with your entire post! That said, it will not work me. I am in a resort, second home, and retirement market! I moved here for family reasons 2.5 years ago. I knew 6 people in the area, and one of them is also an agent. I had not seen or talked to all but 2 of them in years. The two l am close friends with had moved here two months before I did. I have done better than I hoped, but I have not sold one home to anyone that lived within 120 miles of my office. All my leads have come from Z, Realtor.com, or people I have met on the street. I would love to do some of item 3, but my clients have come from 8 states besidesNC. They have come from as far north as Maine, as far south as Tampa, and as far west as Ohio. I would love any suggestions!

 

 

Sep 21, 2018 07:38 AM #31
Rainmaker
786,079
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Misread that briefly as "praying for leads".  That might help too if you try hard enough! In all seriousness, organic is the way to go.  We tried many different marketing schemes and they almost always fail. 

Sep 21, 2018 12:03 PM #32
Rainmaker
178,772
Melissa Spittel
Coldwell Banker Residential Brokerage - Westminster, MD
"Achieving Results Together "

Agreed! Growing organic results allows us to demonstrate our expertise. There are so many companies selling leads, and it seems new ones pop up all the time. My mentor always told me "don't buy leads", and I don't.

Sep 21, 2018 12:23 PM #33
Rainmaker
246,567
Brien Berard
Remax Professionals Laurel MD - Laurel, MD
Maryland Real Estate Agents - Laurel Real Estate

I do like comapnies that don't charge you a monthly fee, just a referral for when the deal settles.

Oct 23, 2018 02:35 PM #34
Rainmaker
3,186,036
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Bill I missed this post and I am so glad I stumbled upon it thanks to our torrential downpour here in LA and my  email migration:). Loved the post and the spirited comments back and forth. Funny you can give good advice but depends what the person is hearing might be different, Endre

Jan 31, 2019 11:39 AM #35
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