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Why free leads are only for the bottom feeders

People who accept free leads in the real estate industry are either bottom feeders or about to learn some difficult business lessons. #tinstafl

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What Is a Bottom Feeder?

When it comes to creatures of the sea, a bottom feeder is an aquatic animal that feeds on or near the bottom of the body of water. However, people often use the term “bottom feeder” to refer to those who do not want to take care of themselves—instead relying on others for sustenance.

As an Independent Real Estate Broker, I’m always looking to recruit new agents to join our brokerage. And… I’m always checking out what the competition is offering and how the competition is advertising. Additionally, I’m always curious as to what agents are looking for when selecting a place to hang out their shingle.

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What Constitutes a Free Lead?

I’ve spent a lot of time as a lurker on Craigslist lately, and see that many brokerage advertisements mention free leads. From this and from my conversations with agents, I’ve concluded that free leads are very exciting to agents who aren’t extremely busy or productive. After all, if an agent were busy and productive, he or she wouldn’t have time to check out Craigslist and might not even be looking for a change.

If a company or individual tells you or advertises that they are providing free leads, here is what you need to ask:

  • Where do these leads come from?
  • Are they already qualified? If so, how?
  • How will these leads be delivered?
  • Is there any special compensation agreement if the provided leads are converted?

The truth is that I can give you all free leads right now—each and every reader of this article. All I need to do is pick up the Yellow Pages or look up a specific street or neighborhood and provide you with a list of individuals—residents and owners. And… now you have unqualified buyer and seller leads.

Clearly, there are better ways to identify buyers and sellers and convert those individuals into closed sales. Know that you do not need anyone to provide leads to you.

The Pareto Principle and Real Estate Leads

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto’s Principle. While it may be misnamed, Pareto’s Principle or Pareto’s Law (as it is sometimes called) can be a very effective tool to help you manage effectively.

The 80/20 Rule means that in anything a few (twenty percent) are vital and many (eighty percent) are trivial. In Pareto’s case it meant that twenty percent of the people owned eighty percent of the wealth.

In the real estate professional’s case, it means that eighty percent of your business will come from twenty percent of your sources. Think very carefully and make a list of all of your closings over the last three years. Identify patterns where leads and closings came from a single source—such as an attorney, accountant, past client, friend, or relative. Can you locate a series of closings that came from one family or as a result of one relationship? Can you identify one referral source that led to a significant number of closings?

Why spend your time focusing on brand new leads—people whom you don’t know and who may not be well-qualified—when the very best lead sources (the ones that already give you eighty percent of your business) are right in front of you?

Two Sources of Increased Closings

The key to increased success can be derived from two main sources: 1) individuals already providing you with leads, and 2) friends and acquaintances who would refer you until the cows come home.

For both of these sources, continue to develop top-of-mind awareness. Remind these folks that you are in the real estate business and that you appreciate all the referrals that they have provided.

Consider others that are or can be your very best billboards. Who do you know that speaks highly of you to others? How can you make this person’s life easier and better so that they will begin to refer you more business? What can you do for them?

Developing a strategic and tactical plan to increase your work with existing and new referral sources can lead to a significant increase in closings.

Teach a Man to Fish

When speaking about bottom feeders looking for free leads, I often wonder whether those seeking these leads will know how to convert an unqualified or minimally qualified lead into a ready, willing, and able homebuyer or home seller. That’s the reason knowledge is so important. As they say, “Give a man a fish, and you feed him for a day; show him how to catch fish, and you feed him for a lifetime.”

If you want to increase your real estate closings, quit looking for your next meal and focus on enhancing your own fishing skills. In this way, you can generate infinite leads and see closings throughout your career—no matter the market.

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

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Business Marketing

Snapchat’s study reveals our growing reliance on video

(BUSINESS MARKETING) Snapchat released a report that shows some useful insights for future video content creation.

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Snapchat is taking a break from restoring people’s streaks to publish a report on mobile video access; according to Social Media Today, the report holds potentially vital information about how customers use their mobile devices to view content.

And–surprise, surprise–it turns out we’re using our phones to consume a lot more media than we did six years ago.

The obvious takeaways from this study are listed all over the place, and not even necessarily courtesy of Snapchat. People are using their phones substantially more often than they have in the past five years, and with everyone staying home, it’s reasonable to expect more engagement and more overall screen time.

However, there are a couple of insights that stand out from Snapchat’s study.

Firstly, the “Stories” feature that you see just about everywhere now is considered one of the most popular–and, thus, most lucrative–forms of video content. 82 percent of Snapchat users in the study said that they watched at least one Snapchat Story every day, with the majority of stories being under ten minutes.

This is a stark contrast to the 52 percent of those polled who said they watched a TV show each day and the 49 percent who said they consumed some “premium” style of short-form video (e.g., YouTube). You’ll notice that this flies in the face of some schools of thought regarding content creation on larger platforms like YouTube or Instagram.

Equally as important is Snapchat’s “personal” factor, which is the intimate, one-on-one-ish atmosphere cultivated by Snapchat features. Per Snapchat’s report, this is the prime component in helping an engaging video achieve the other two pillars of success: making it relatable and worthy of sharing.

Those three pillars–being personal, relatable, and share-worthy–are the components of any successful “short-form” video, Snapchat says.

Snapchat also reported that of the users polled, the majority claimed Snapchat made them feel more connected to their fellow users than comparable social media sites (e.g., Instagram or Facebook). Perhaps unsurprisingly, the next-closest social media platform vis-a-vis interpersonal connection was TikTok–something for which you can probably see the nexus to Snapchat.

We know phone use is increasing, and we know that distanced forms of social expression were popular even before a pandemic floored the world; however, this report demonstrates a paradigm shift in content creation that you’d have to be nuts not to check out for yourself.

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Business Marketing

Technology is helping small businesses adapt and stay afloat

(BUSINESS MARKETING) Small businesses need to utilize digital platforms to adapt their businesses during COVID-19, or else they may be left behind.

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While many may not have imagined our present day back in March, and to what extreme we would be doing things “remotely” and via “hands-free contact”, we have to give some credit to small business owners who remain flexible and have pivoted to stay afloat. They deserve major credit on adaptations they have made (and possibly investments) in new technology (ordering online, online payments) especially at a time when their in-person revenues have taken a hit.

There are various marketing buzz words being used lately to say “let’s keep our distance”, including: curbside, to-go, hands-free, no contact, delivery only, order via app, social distancing and #wearamask.

The thing is, if you really think about it, small businesses are always in evolution mode – they have to pay attention to consumer consumption and behaviors that can shift quickly in order to stay relevant and utilize their marketing and advertising budgets wisely. They heavily rely on positive customer reviews and word of mouth recommendations because they may not have the budget for large scale efforts.

For example, we use Lyft or Uber vs calling an individual cab owner; we order on Amazon vs shopping at a local mom-and-pop shop; we download and make playlists of music vs going to a record or music store. Small business owners are constantly fighting to keep up with the big guys and have to take into account how their product/service has relevance, and if it’s easy for people to attain. In current times, they’ve had to place major efforts into contactless experiences that often require utilizing a digital platform.

If stores or restaurants didn’t already have an online ordering platform, they had to implement one. Many may have already had a way to order online but once they were forced to close their dining areas, they had to figure out how to collect payments safely upon pickup; this may have required them to implement a new system. Many restaurants also had to restructure pick up and to-go orders, whether it was adding additional signage or reconfiguring their pick up space to make sure people were able to easily practice social distancing.

According to this article from the U.S. Chamber of Commerce, “Studies have shown that 73% of small businesses are not aware of digital resources, such as online payment processing tools, online productivity tools, e-commerce websites, online marketing and other tools, that can help them reach customers around the world. If small businesses had better access to global markets, it could increase the GDP of the United States by $81 billion and add 900,000 new jobs. During the pandemic, this could also mean the difference between thriving and closing for good.”

There are some larger corporate technology companies offering ways to support small businesses whether it’s through small business grants from Google, resources and grants from Facebook or Verizon giving them a break on their telecom bill. The challenge with this may be whether or not small business owners are able to find time from their intense focus on surviving to applying for these grants and managing all that admin time. Many business owners may be focusing on what technology they have and can upgrade, or what they need to implement – most likely while seeing a loss in revenue. So, it can be a tough decision to make new technology investments.

It does seem like many have made incredible strides, and quickly (which is impressive), to still offer their products and services to customers – whether it’s a contactless pay method, free delivery, or even reservations to ensure limited capacity and socially distanced visits. There are still some that just haven’t able to do that yet, and may be looking at other ways to take their business to a wider audience online.

We would encourage, if you can, to support small businesses in your community as often as you can. Understandably there are times that it’s easier to order on Amazon, but if there is a way you can pick up something from a local brewery or family-owned business, this may be the lifeline they need to survive and/or to invest in new technology to help them adapt.

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Business Marketing

There’s a shortage of skilled workers, so get learning

(BUSINESS MARKETING) COVID-19 may end up justifying training funds for lower-class workers to learn new skills. Skilled workers are desperately needed right now.

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The COVID-19 pandemic (yes, that one) has ushered in a lot of unexpected changes, one of the which is most surprising: An increased call for skilled workers — a call that, unfortunately, requires a massive retraining of the existing workforce.

According to the New York Times, nearly 50 percent of Americans were working from home by May; this was, reportedly, a 15 percent increase in remote work. The problems with this model are expansive, but one of the greatest issues stems from the lack of training: As employees of lower-class employment transitioned to working online, it became increasingly evident that there was a shortage of skilled workers in this country.

The Times traces this phenomenon back to the Great Recession; Harvard University’s Lawrence Katz points to some parallels and insinuates that this is an opportunity to elevate the lower class rather than regressing, and it seems fair to put the onus of such elevation on lawmakers and senators.

Indeed, Congress has even addressed the issue of skill equality via “bipartisan support” of a $4000 credit for non-skilled workers to use toward skill training. For Congress to come together on something like this is relatively noteworthy, and it’s hard to disagree with the premise that, given the invariable automation wave, many of our “non-skilled” workers will face unemployment without substantial aid.

COVID-19 has accelerated many trends and processes that should have taken years to propagate, and this is clearly one of them.

Supporting laborers in developing skills that help them work within the technology bubble isn’t just a good idea–it’s imperative, both morally and economically speaking. Even middle-class “skilled” workers have had trouble keeping up with the sheer amount of automation and technology-based skillsets required to stay competent; when one considers how lower-class employees will be impacted by this wave, the outcome is too dark to entertain.

It should be noted that non-skilled workers don’t necessarily have to scale up their training in their current fields; the Times references a truck driver who pivoted hard into software development, and while it may be easier for some to focus on their existing areas of expertise, the option to make a career change does exist.

If we take nothing else away from the time we’ve spent in quarantine, we should remember that skilled labor is integral to our success as a society, and we have a moral obligation to help those who missed the opportunity to develop such skills fulfill that need.

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