Do a Google search for lead generation strategies for real estate and you will get a bazillion hits. Okay, in my case I got 11 million…that’s pretty close to a bazillion.
Lead generation is the No. 1 one challenge I hear from real estate agents every day. It’s a challenge in many highly competitive industries. I face a similar challenge in my industry and over the past 10 years of running a business through highs and lows, I can safely say that not all leads are created equal.
What do I mean by this? As I’ve said, not all leads are created equal and there are a bazillion opinions on the subject of lead generation. It’s no surprise really, since pretty much every business on the planet needs to attract customers.
And that is fundamentally what lead generation is – the process of attracting potential customers to your business on a consistent and predictable basis. And the right leads are easier to convert so you spend less time chasing and more time selling.
How do you attract the right leads to your business?
There are several tactics to lead generation, but fundamentally there are two main ways: buy them or attract them. Let’s look at the first – buying leads. This typically involves paying a company to send you leads. There are plenty of companies that do this. You pay a monthly fee and they send you leads based on some type of criteria – usually geographic.
There are pros and cons to the lead purchase approach. One advantage is that it takes some of the marketing pressure off you and you just have to call people to make appointments. The biggest downside to this approach – something I hear time and again – is that the quality of leads tend to be poor, making it difficult to make appointments, let alone turning any into clients.
If you’re considering this type of service, do your homework. The biggest questions to ask are how the leads are generated and how they are qualified.
Many times leads come from people filling out forms to download a free report or to get a free home evaluation. The offer, how it’s positioned, the information that’s collected and more will affect the quality of the leads that these approaches deliver.
With these tactics the focus is on quantity versus quality and you could spend your time contacting people that a) have no idea why you’re calling them or b) were just looking for some free info and are not interested in buying or selling right now.
The other approach to lead generation is focused on attraction, not purchase. This involves a more strategic approach that is designed to have people reaching out to you rather than the other way around.
A strategic approach helps you identify who it is you want to work with, what their needs are and why working with you is the best decision they could make. It’s about positioning yourself in the market you want to be in and giving people a reason to contact you.
With the right strategy and the right positioning, you start generating leads from people who actually want to work with you. So while you typically see fewer leads with this approach, your close rate tends to be much higher. Quality versus quantity.
There are pros and cons to this approach as well. The advantage is clear: better leads means less effort to convert.
But you need to develop a strategy and positioning and it can take time to establish a presence in your chosen market. I would argue however, that you should be doing this anyway if you plan on being in this business for the long term.
There are different cost structures to these approaches. You can pay a lower cost per lead to get a lot more contacts…but in the long term, you’ll spend more effort trying to convert those leads. Or, you could spend the same amount and get fewer but targeted, high-quality leads, which will result in a higher cost per contact. However, your conversion rate for those leads will be greater. Leads that are targeted and high quality will always get you more clients with less work.
What’s your experience with lead generation? I’d love to hear your perspective in the comments below.