Benn Rosales recently wrote a post called What’s a Lead? which was very on focus and made some very telling points about the industry that has grown up to intermediate themselves between the real estate agent and the consumers. Its not a new idea. People have been trying to get between the consumer and the real estate agent since before the Internet.
- Real Estate Agents who make referrals have intermediated themselves into the real estate transaction.
- Relocation companies are intermediaries
- REO Asset Management Companies are intermediaries.
- Attorneys who represent estates are intermediaries
- Attorneys who represent clients in divorce or partnerships that are dissolving are intermediaries
But the real estate community accepts these intermediaries because they control certain types of business, and that business will only be distributed by those them. There is no other way to approach this business and therefore the intermediary is a valuable part of the transaction.
So What Happened?
Technology made a new type of intermediation possible. Through advertising, consumers were drawn to sites where people who neither controlled the product or service being sought, nor the consumer who was seeking the service or product placed themselves in a position where they appeared to have some control over both ends of the transaction. To the consumer, these new intermediaries seemed to control the product , or in some instances, the cost of the service. To the real estate professional, this intermediary seemed to have control over consumer inquiries, or over “quality” consumer inquiries. Most of it was done by smoke and mirrors and a certain amount of double speak.
- You should let your listings be posted on our site because we will be advertising your listings for free.
- You will bet exclusive leads –
- That’s one of my favorites. I picture someone going out to the consumer’s house to remove their computer so that they remain yours exclusively -unable to surf the web any longer looking for houses.
- Just one sale/listing will pay for the service-
- As if there were no costs associated with doing business other then the cost of this one thing (N.B. since most real estate companies operate at roughly 10% profit – you need to do 10 pieces of business to break even on any new dollar of expense)
- Can you spend 30 million dollars to drive people to your website?
- No, and I don’t need to . I am not trying to draw every consumer in the country to my website. Only people that want to do business in my marketplace – a much less expensive proposition
- We offer consumers a rebate for using our service. That provides them with an incentive to list with you
- So let me get this straight – I pay you a referral, you pay a portion to them and keep the difference so only you win. I get less money , and they get charged more?
- We qualify the leads so you only have to work with the good ones.
- So now I don;t even get to “cherry pick ” for myself?
Because the members of the real estate community don’t all run at the same speed, there was enough confusion about technology and how the new electronic marketplace would work that we’ve allowed them to gain a foothold in our industry. Whether that foothold is sufficient to create a beach head and then a more permanent intermediation depends to a large degree upon us.
So What’s Wrong?
Our job starts with prospecting. I know that the term lead is not real popular on the site, and goodness knows cold calling and door knocking seem to be somewhere near beating your dog on the social scale, but meeting consumers, no matter how you do it is an integral part of any sales process. So whether you prefer to go to networking breakfasts, or farm using postcards, email, newsletters or flags in the lawn, leave a business card with your tip every time you go out to eat, hand out literature at the supermarket, cold call or door knock,or even blog – do something to meet new consumers on a regular basis and the need for intermediaries go away.
Look, I’m not knocking people for attempting to create a business for them to make a living, I just prefer to buy services that enhance my efforts instead of replacing them. And in this case, I just don’t feel that the intermediaries bring anything to the table that we cannot bring ourselves if we choose to. I really feel like we’re handing them our watches and then paying them to tell us what time it is. Its as if Paul Bunyan or John Henry ran out to buy the machines that were destined to destroy their jobs. Wouldn’t they have been better served to acquire the tools and then control the production themselves? If we’re too lazy to do our job, research new technology and change to fit the times, we end up continually outsourcing little pieces, over and over again, eventually we outsource ourselves out of a job.
Then do what?
So if you’re going to invest in something to build your business, let it be something that you control. Where you can make the changes to fit your philosophy and your business model.
Need more leads? Then increase your web traffic. Use print media to drive traffic. Redesign the site periodically- pay for clicks, write blogs, enhance the consumer opportunity, make sure you have reciprocal links, use social media to increase your presence, syndicate your listings yourself with links back to your site. But stay in control of your electronic presence.
Need your leads to be incubated? Buy a CRM. Get a website with a strong back end. Hire someone to work with your incoming inquiries. Install chat on your site. Set up your own methods of reviewing your traffic and then winnowing the results. And I believe you will not only get a more cost effective result, you will get the results you want, not what a third party technology company thinks you should have.
I know from my own experience that setting up an internal system in my company has enabled us to follow up with people that have contacted us in a manner appropriate to their needs. Some people needed to be called right away and they were- Others wanted to be contacted infrequently while receiving email updates on new listings and that’s what they got. And what we got as a company was a positive return on our electronic marketing, controlled by us.
And those guys that wanted to sell me “exclusive” leads at $30 each a few years ago, they’re around $7 per lead now, and since they’re the same ones I get from my own web site I think I’ll pass on those leads also.