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Staying in the Game

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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.

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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.

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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.

Written By

Bill is an unusual blend of Old & New - The CEO Century 21 Advantage Gold (Philadelphia's Largest Century 21 company and BuzzBuilderz (a Social Media Marketing Company), He is a Ninja CEO, blending the Web 1 and 2.0 world together in a fashion that stretches the fabric of the universe. You can follow him on twitter @Billlublin or Facebook or LinkedIn.

11 Comments

11 Comments

  1. John Lauber

    April 14, 2008 at 7:14 am

    It’s really amazing how many emails we get a day selling “lead” services. Even if you’ve set up a SPAM filter for one, there’s always one right behind it waiting to fill your inbox. It makes you wonder if they’re not all the same company (they could be). It’s the same with SEO services that will make you #1 on Google searches, if, you pay enough money. I’ve yet to read anywhere that the information provided or the service offered was anything but a waste of money. I’m with you, that you should know how you’re money is being used so, hopefully, you can control the outcome.

  2. Greg Cremia

    April 14, 2008 at 7:38 am

    Too many agents got into this business because they thought, like most consumers do, that this business is easy money. Put a sign in the yard and wait for the phone to ring then cash your check.

    These agents love the idea that they can buy leads. Everything you mentioned in your post about building your business requires work and this goes against too many agents principles. I had an agent ask how I got my site where it is. He didn’t want to hear the answer, he wanted a phone number.

    As long as these types of agents exist so will lead generators, although the lead generators are losing the internet battle which they dominated for a while.

  3. Bill Lublin

    April 14, 2008 at 8:30 am

    John – My favorite one is the email that says “I was looking at your web site and its pretty good but doesn’t rank high enough in the search engines” I always wonder “Then how did you find it?”

  4. ines

    April 14, 2008 at 4:04 pm

    Bill – I like the way you think and thanks for the laugh with this line, “and goodness knows cold calling and door knocking seem to be somewhere near beating your dog on the social scale”.
    I’m all about control and I have issues with many sites that take our listings and don’t send us the leads from them. (i.e. Coldwell Banker just signed a deal with Trulia – all of our listings now appear under Floridamoves.com and our name is nowhere to be found. Thanks CB! you have now officially taken business from me)

  5. Matthew Rathbun

    April 14, 2008 at 8:46 pm

    I know it wasn’t the center piece of your post, but the phrase “If this service gets you just one sale, it will pay for itself” gets me every time…. I just snicker when I hear it.

    Agents need go in with eyes open. You can only do that “just one sale” bit so much, before that service doesn’t get you a sale (which they’ll blame on your usage of the system) and you are now in debt for all the services you’ve acquired.

    If it seems too good it is!

    This only works in your in business to pay for services!

    I am going to write a post on this, but… I resigned as a REALTOR to turn over the biz to my wife to go work as the director for the local association’s school in December. At that time I deleted several webpages. YESTERDAY (about five months after it was taken down) a “vendor” called saying that they were looking at http://www..com and see that I am not ranked as high as I could be. I asked them to tell me what the webpage said and wouldn’ you know it… her internet just went down and she couldn’t remember what it looked like. So, I’ve got a “SEO professional” who can’t keep an internet connection, look at a webpage that hasn’t existed (not even in Google cache) for many months.

    Yeah, they can help me, alright!

  6. Bill Lublin

    April 15, 2008 at 3:30 am

    Ines, I feel the same way you do – Century 21 made the same deal (Realogy Brands seem to follow one another through these marketing ideas) – and that’s why I think we need to rely on our own efforts, whether they be company efforts or individual efforts – but I don’t need to tell you that do I? 🙂

    Matthew – The worst part of these calls and emails is that I feel as if I must seem really stupid for them to make such a weak effort to appear reasonable when they lie to me! 🙂

  7. Benjamin Bach

    April 15, 2008 at 4:17 am

    Most brokerages actively work to get the leads, and then sell them to you. It gets worse and worse, every single year.
    I’m thankful everyday that I am associated with one of the few brokerages that doesn’t.

  8. John Lauber

    April 15, 2008 at 6:11 am

    Ines – Prudential just made a similar deal. Of course, they still have their deal with Yahoo in place. Every time they make these deals, no on can figure out how this helps us (as agents) vs. Prudential, besides making us pay for sign riders for the service (I don’t).

  9. ines

    April 15, 2008 at 1:41 pm

    John and Bill -sometimes I think these big brokerages do it for the newer agent that doesn’t know how to market themselves yet – it’s a great sales pitch for recruiting – we’ll include your listings in Trulia, Realtor.com, The NYTimes……….

  10. Bill Lublin

    April 16, 2008 at 2:47 am

    Ines & Benjamin; As a company we synidcate our listings and manage them, but we then distribute them to the agents without a referral fee – As Ines points out, just another reason for an agent to affiliate with our company 🙂 – And because the CEI is so awesome, yet modest! 🙂

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