You may have been contacted in the past by a brokerage who promised to feed you internet leads. If considering this as an option, do yourself a favor & have a read prior to making the switch.

Being the CEO of an online lead generation company, I want to be the first to tell you, “Internet leads are mostly garbage”.  OK, now that I’ve gotten that off my chest, let’s talk about what you can expect from online leads & these lead providing brokerages.

You have a 90% chance of being taken off leads within the first 4 months

Most agents who try their hand at online leads fail within the very first 4 months. This isn’t because you aren’t good at what you do; it’s because you don’t know how to work Internet leads.  If you did, you most certainly wouldn’t be joining a brokerage that feeds you leads; you would source your own.

Be prepared to pay up to a 60% commission split

You have to understand that funding a lead generation campaign is expensive for an office.  First, they have to deal with a high turnover (90% of agents are fired in the first 4 months).  Second, they have to work with very low conversion rates; most agents who try to work online leads convert only 1.5% of all the leads they receive.  Don’t get me wrong, I’m not here to justify their split, I’m just saying that if you want internet leads don’t expect to get them for free. The big take home here is this: if you generate your own online leads, your cost per deal closing as an average agent will be much less than paying up to 60% of your commission to the brokerage. So the leads given to you from a brokerage may not come at an upfront cost, but by the time the deal is done, you’ve paid thousands of dollars more to close that deal vs simply sourcing the lead yourself.

Unless you maintain the expected conversion level, you’ll be fired
Even if you are among the 10% who end up keeping their position in the lead distribution program, you’ll be fired if you can’t keep up with the closing percentage that they expect moving forward.

Let’s take a closer look at the numbers

Now, let’s say you aren’t fired. Great! This means you’re closing business regularly. But what you’re really doing is making your office money, and taking a major hit on your own income. Tying into my point about paying a commission split: Just imagine how much money you would have made had you sourced the leads yourself? Sourcing your own leads and closing as an average agent will have a cost per deal under $1000, whereas working off a commission split can easily bring your cost per deal to $5000 – $10 000 i.e. if you work off a 50/50 commission split and close a deal that sources $20 000 commission, you’ve just paid your brokerage $10 000 for that deal.

The bottom line is your office shouldn’t be involved with your marketing or lead sourcing. If they are, you should be paying for that marketing; it should never come out of your commission. 

I think offices need do a better job in vetting the companies that they choose to work with. Too many companies tend to take advantage of the agents who don’t understand how online lead gen works.  It can be difficult for an office to understand how a company works without actually trying the company out themselves. With that said, I think that a company who has been around for long enough tends to stand out. Agents start to talk about how they were treated, and this word of mouth can speak volumes with regards to a company’s worth.

Before you get into online leads here is what you need to know:

1. Your cost per lead is dependent on the city you are targeting.  The average cost per lead across all Canadian & US cities is $12/lead.  Here is a fairly accurate chart of costs per lead in Canada http://alleads.wehelp.ca

2. You need to call the lead as soon as you get it.  Preferably within 5 minutes of the lead coming in.

3. You need to keep calling the lead until you get a hold of them.  Some agents keep calling at different times in the day for up to 2 weeks.  I’ve also heard the expression “I keep calling until they buy or die.”
   
   
4. Once you get a hold of them figure out what stage of the buying process they are in and what their motivation is.  Once you have that you can set a proper follow-up.  We will either keep on them to meet or set a long-term follow up.

5. Anywhere from 20% to 40% of all the leads you get will be completely fake.

6. Leads that you are calling don’t know that you will be calling them, we have a good idea that they are looking to buy/sell but they don’t expect a call from you.

7. Most agents convert at 1.5%.  There are agents that convert at much higher percentages, but you shouldn’t expect that to be the case on your first attempt. Learn the processes and projections, and trust in the numbers using the 1.5% closing percentage as your base.

There are plenty of companies that offer online lead generation.  As I mentioned, I am the CEO of one of them, but you need to do your research. Explore what’s out there.  Here is an up to date list with a few of the top lead gen companies:

http://www.AgentLocator.ca – My company, we’re based out of Mississauga Canada & bill in Canadian dollars.

http://www.RealEstateWebmasters.com – A company out of Nanaimo Canada, bill in US dollars.

https://www.commissionsinc.com/ – A company based out of Atlanta USA, bill in US dollars.

http://boomtownroi.com/ – A company based out of Charleston USA, bill in US dollars.

What it means to be a real estate agent in 2016 is very different from what it meant 20 years ago, or 10 years ago…or even 5 years ago. For better or for worse, technology has seen incredible advancements over the last 10-20 years, and it’s had an effect on how we all do business. Realistically, unless you’re an agent who has been in business for 20+ years and has a massive sphere of influence, you should be harnessing online leads as a medium to drive yearly sales. With that said, we aren’t all able to pump money into our business right from the start. What’s more is that some of us may find it difficult to excel with online generated leads. But with the online world being the first place people go when wanting to buy or sell their home, this leaves the agents who aren’t harnessing online lead gen at a disadvantage. So what can these agents do to keep up with the pack and reach their yearly sales quotas? Thankfully, there is still a wealth of approaches that an agent can take to source business. If you don’t have the startup funds to jump into online lead gen, here are a handful of methods that you should be implementing:

Pick up that phone

Cold calling is an old school method that works. It has been around for decades as we know it, and surely existed in some way, shape or form prior to the industrialization and commercialization of our modern society. Simply put, if you want business, ask for it. Pick up that phone and start dialing out. The more connections you make the better. As you can almost certainly imagine, most people won’t answer, and most of those who do answer won’t give you the time of day. That’s all part of the game. Keep pushing and dialing out, and you’ll connect with the leads that matter. Be polite, but persistent. This is something you can do from home, the office; anywhere with a phone.

Knock on some doors

Going hand in hand with cold calling is door knocking. This is another decades old method that many agents these days choose to ignore. It may not be the most fun way to source your business (or maybe it is depending on your personality), but getting out there and meeting people face to face is one of the best ways to spread word and source leads. Unlike advertisements that bombard our everyday life, people remember a face; especially if you left them with a good impression. Generally speaking, just like cold calling most people will not answer their doors, or will try to brush you off. But remember, it doesn’t matter what method you’re using to source your business: It’s all a numbers game. Sooner or later, you’ll connect with the person looking to sell, and that will make it all worthwhile. In real estate, the name of the game is quality, not quantity. One important aspect to remember when door knocking: give the lead a reason to open up to you. The lead already knows why you’re there: you want to sell their home. So when you connect with someone, make it about them; ask them when they bought their home, if they know how much homes are selling for in their area, offer to send them updates when their neighbors sell. Entice them with value, not a business card.

Network Network Network!

Business is all about networking. Again, advertisements are a dime a dozen. What sets your billboard sign apart from your competitors; a fancier logo? Maybe. But what really sets you apart is how you interact with the people you encounter in your day to day. Networking will spread word of mouth for your business a lot faster than anything else. People listen to people, and if you’ve impressed someone with any sort of influence, their influence will have a positive effect on your business. Networking will also open up more doors for you in terms of valuable marketing initiatives, partners and affiliates, and insights from other successful agents and business people. Moreover, consistent networking will yield more referrals; again, people listen to people.

Add Content to Your Website

So maybe you don’t have the money to pump into an online lead gen campaign, but I’m not saying to ignore technology all together. That’s a one way ticket to hell, and a sure fire way to failure. Your ultimate goal should be to do online lead gen. Believe it or not, it’s a lot less effort to follow up with online leads vs cold calling, door knocking etc. With an online lead, yes it’s a numbers game, but at least that lead has already shown intent to buy or sell, and you’re only goal is to get them to use you. With cold calling and door knocking, you’re searching for the intent before you can even try to convince the lead to use you. I hope this much is clear. With that said, you should still be harnessing technology prior to the point of actually taking on an online lead gen campaign. You should have a really nice website that showcases your accolades, but more importantly, is a one stop shop of information for buyers and sellers. But having the nice website is unfortunately only half the battle. The other half is getting that website to pop up on Google. If someone Google’d your name, it’s likely that your website will pop up (unless your name is Jane Smith). But what if someone typed in generic key words, like “homes for sale Toronto” for example? Getting your site to pop up then is much more difficult. Ultimately, SEO is the service that may accomplish this. But SEO can be just as expenses (or more) as an online lead gen campaign using Google PPC, and half as lucrative; it’s time consuming and volatile, and may never work. What you can try instead, is adding regular content to your website. Content plays a major role in SEO and being found on Google. You will not see drastic movement overnight by adding regular content, but you can certainly see some movement with time. Adding weekly blog posts, community write ups, testimonials etc, will all help. At very least, it will show anybody considering you as an option that you are a professional and knowledgeable agent; if you have regular blog posts, details about communities and more content that will help a lead to buy or sell, then that lead will see value in hiring you.

So there you have it folks! Leads don’t grow on trees, and businesses don’t build themselves. You absolutely must invest time, or money, or both into your business. If you don’t have the money to invest in your business, you have the time. Get to it!