Pay for leads, or leads that pay?

The number one thing that determines the success of any business is how it acquires its customers. Our industry is hooked on the now, wanting an instant lead payoff. We have a short-term view, wanting to get a listing for this Tuesday's sales meeting. On the flip side, we have agents who are still building relationships yet fail to convert any of those relationships to real live listings. So where's the balance?

You need to get clear about what you do and what you don't do. Lead generation websites aren't new, but they do cut into your margins and breed lazy agents. Even worse, a number of the leads are already in your existing database. The better question is where does the customer hang out before they need you? They hang out at open homes and enquiring online. They also hang out with existing customers of the firm, better known as Landlords, Tenants and past clients of the firm.

What are the best lead sources?

Open homes - you meet more people more often who are already out looking for a solution. From neighbours to genuine purchasers that have to buy today. The buyer who buys's is tomorrows seller. They choose the property not you, so it's the beginning of the relationships.

Buyer enquiry - Buyers are establishing price points and value when they enquire, how you handle those enquiries determines whether they see you as valuable, or just another agent sending another automated reply which didn't answer the buyers questions. It's always my preference to call the client over emailing them; it gives you a real chance to find out exactly where they're at in the purchasing cycle so you can provide the very best advice.

Market appraisals - The owner just want's a price, after all, it's probably the bait and hook that you used to get the customer to call, find out what your place is worth. The big banks are using the same tagline, so it's time to change. The role of the agent at the market appraisal is to find out the clients dissatisfaction (the problem they are trying to solve), their vision (solution and what it looks like) and preparedness to make the first steps (attend opens, private appointments, make offers or bid at auction).

Landlords - They have a principal place of residence, but is your agency a full-service firm? If you are you'd get on the phone to arrange a time to see their principal place of residence, to provide and equity update, then either sell and upgrade, or use that equity to buy another investment property.

Personal network - You've got 1000's of friends on social networks, but where do they live? If they live in an area you service, then you must cross the bridge of awkwardness and be their agent. The easiest way to introduce work-related conversations in a non-work environment is just to say it, 'you wouldn't believe what happened at work yesterday', particularly around just listed/sold activity.

The secrets of word of mouth marketing matter more than ever. Therefore customer experience is everything. You need to be able to define it to deliver it. Map out where the customer's highs and lows are, then place a high next to the low. If you get a price reduction it's a low for the client, so make sure you get a buyer inspection within 24 hours, a high, so they put the connection together between price reduction equals buyer activity.

The best in the business focus on appointments only. Get me to 3 appointments a day, buyer, market appraisal or listings appointments and watch your business fly. I'm not trapped in industry dogma around door knocking, cold calling, or vanity marketing. The best form of marketing is always an auction or for sale board up, and a sold sticker applied.

You must know what makes your business work, so you can amplify your efforts and steer clear of the activities that suck resources. For all the effort, energy and talk around social, I just wish people would spend more on serving the existing customers they've already got. Hunting for new, when the reality is a great business has repeat and return customers.

How much does your business spend on marketing? And how much of that budget is spent on retention and renewal of existing customers? Why pay for a lead that you've already got?

This article first appeared on Elite Agent: https://eliteagent.com/josh-phegan-pay-for-leads-or-leads-that-pay/