RECR's Blog

I hate that they always guarantee that the service will pay for itself and that would be true if you get a client that actually goes to closing but that might take 10 months of paying $300 a month and guess what depending on what pricing of the house you sold it's just not worth it, and I can't take the chance. 

They will not stop calling!!!

Thank You!!!!

 

It's a ton of work for a lot of money, for minimal returns. The concept is fine, but when you can get other leads, it works better.

ROI or lack there of, high costs Did I say Homegain? Every lead service I have used promises the same but delivers little.

Lead agrevation is what I call it.

The problem is that the Internet can and will produce a large amount of un-qualified leads, and consumers of those potential leads would prefer to have work handed to them rather than to work for it themselves. Hence the amount time required to sift through those leads is not cost effective.

There is little insentive by the referring party to qualify those leads as in the imortal words of W.C. Fields " there is another sucker born every minute " (or something to that effect ).

Besides that it is easier and more attractive to advertise the number of leads sent out. Sooner or later there will be a success story generated from those leads. One success story will go along way in attracting to prospects.

Why is it there are so many unquallified leads? The answer is in the Internet itself. People like getting free information. Lead generation companies play on that. Attracting leads by the droves looking for the free stuff with no intention of following through.

If I go further with this I would have to make it a post

I am not a realtor but work in the real estate investment training space.  This is an interesting topic.  One that is close to my heart. I wrote about one company that I found to be exceptionally bad.  Here is the link  

http://activerain.com/blogsview/272837/Beware-of-online-lead 

The problem is many lead generators take a short term view of what they do.  Their thinking is probably something like this:

Let me charge this company X$/lead and send them lots of unqualified leads so I can make some quick money.  Once they figure it out I will just move on to my next target and repeat.

While it should be more along the lines of:  How can I help this client increase their business though high quality leads.  If I can do this then we will both benefit long term. 

My marketing recommendation is to work on your word of mouth efforts, paid search and just keep on blogging.  People will find you if you know what your doing.  Here is a short post on becoming an expert.

http://activerain.com/blogsview/298725/Are-you-an-expert 

I use the Gooder Rainmaker System to capture leads from my websites and a combination of Rainmaker and TP7i to manage them.  If I sold all the junk leads that came in to my colleagues, they would be lining up to file formal complaints.  I have tried a few of the leads for sale companies over the years, and always have been disappointed.  The same ones (you know who) call me over and over or send frequent emails.  Bottom line - if these people really had quality leads they would be handing them out as normal referrals - 25% referral fee at closing. 

When I get an email from one, I just send back this form-email response:

 

I do not pay up-front fees for referrals/leads.  I pay 30% of my gross commission fee for the referred side at the closing of the sale. 
 

I would appreciate your referrals under those terms.

 

I am tired that they keep calling me even though I am on the do not call list...

I understand where you're coming from.  I understand that there are companies out there who make you slog through tons of worthless names and numbers, only to get maybe one or two decent names - but by the time you get them, they're already working with another agent.  I understand  that you're infuriated to be locked into a long-term contract that you can't cancel (companies do this to insure they make THEIR money - but what about you??)  I understand that you realize, only too late, that you can't get your initial investment back. If you try to cancel early, they probably charge a fee for THAT too! 

I understand your frustration, and I'd like to invite you to try a company that does things differently. A company that doesn't do any of the things I've mentioned above.  You get a whole 30 days to try out our service risk-free. You can cancel and get a prorated refund any time for the first month.  You also get verified, ready-to-act referrals and have the option of getting Guaranteed Closings within a year if you want.  So there's no way you can't make back your intial investment!  Shouldn't that be what a real estate referral agency is all about? Helping YOU, the agent, make money?  You can either call or email me for details.  800-977-7058 or clintmiller@recr.com.

I have tried a few of the contracted lead services, some are better than others on attaining marginally qualified leads.  Most operate on the same basis of having a website that attracts potential sellers or buyers by offering free market analysis tools or buyer information to search for homes.  In these cases, the customer fills out their information and uses the "free" tool and their information becomes a lead.  Some just have the fine print on their website that states a realtor will be given the information. Some make the customer check a box that states they know their request will be given to a realtor. 

These customers of the website generally do not read well or just don't care because if you do contact they will say they were just curious and have no plans to buy or sell.  Some just thought they would get a computerated market analysis of their homes value.  Some leads are input with wrong addresses and wrong phone numbers and yes you can turn that lead in most cases back to the company for a new semi-qualified lead.  I even had many leads in which the home was already listed with another realtor and the seller just wanted to verify that the home was priced correctly.

The work that is performed by the lead generation companies varies.  Some just pass along the leads as they come into their system with little to no verification, some will verify through USPS that the address is not fictitious and some go the extra mile to actually call the lead to verify they requested the information and that they are indeed the owners of the property.  Generally that is  about as far as they go.

In my best case scenario, I broke even after 14 months with a company and when asked to renew for another year contract, I refused, stating I am not in the business to break even.  Breaking even does not pay the bills and in detracts from time I can spend marketing myself to get real qualified leads.

I now state to these companies the same thing someone else mentioned.  I will pay a referral fee for  a lead that closes, but I will not pay upfront fees for something that I have no control over the correctness or quality of the lead.  I do understand that the lead generation companies have to pay for their sites and advertising to get people to their sites, but I don't believe they do enough work to justify $300 - $400 a month for a small number of leads of which 1 or 2 every 3 months is really wanting an agent to contact them.  There needs to be better qualifying done or they need to reduce the amount charged and maybe tie a small referral fee to them.  The probalem with the referral fee, is that a lot of these comapanies are not licensed real estate companies so they are not able to be paid a referral fee from a broker.

It would cost you less money and less time to hire a part time assistant (licensed) to do some marketing and canvassing and attain better qualified leads.  Assuming your assistant would acquire 1 new listing appointment a month or contact 1 new buyer, you would be way ahead of the game.

Mike -- Very well thought out comments.  And very welcomed.  Thank you for your input.  I would have to agree with you that there are some seriously flawed business models out there. 

One thing that you need to remember about a referral company like mine (not a lead gen company) is that we are a tool much like a hammer.  If you think of your business as a house, you wouldnt use JUST a hammer to build the entire thing.  Many different tools are needed.  There is a need for a hammer, but its not the only thing needed.  When it comes time to use a hammer, use it.  Then put it away and use another tool.  The hammer has a place...and is required, buts its on the only tool on your belt. 

We are not intended to replace all forms of marketing or position ourselves as the end-all of lead development or qualification.  But, there is a need for companies like ours to assist you in doing that...much like a hammer assists you in building a house.

To expansive per lead.

Alex -- Thats a bit like saying you wont buy a car because its too expensive.  Price is usually determined by quality, correct?  Or the perception of quality, anyway.  Paying $2,000 for a billboard and not having anyone come in saying thats where they found you....thats expensive.  Paying $5 per lead for 1,000 leads is too expensive if you dont close any of them...But is $5 per lead too expensive?  Paying $100 per lead sounds expensive.  But, paying $100 per lead and closing 1 in 5 doesnt sound like a bad idea when you consider that the 1 you close is going to net you far more than the investment of $500...right?  Thanks for the comments