Editor’s note: Now that real estate brokers are spending more money on online marketing and advertising to drum up new business, they want to know — in a very detailed way — how much bang they’re getting for their buck. In this three-part series, we examine a few technologies offering insight into return on investment. (See Part 2: Web analytics put online marketing dollars to the test and Part 3: Targeting the newspaper real estate ad.)
Now that real estate brokers are spending more money on online marketing and advertising to drum up new business, they want to know — in a very detailed way — how much bang they’re getting for their buck.
There are a lot of sources offering Internet-based leads to real estate companies, but not all leads are created equal. Some of them cost more time, effort and/or money to acquire and nurture.
But the industry is getting better at the cat-and-mouse game of finding consumers on the Internet, luring them to a Web site, capturing their interest, and converting that initial contact into a completed real estate transaction.
Real estate technologists are constantly building and refining a better mousetrap — designed for the kind of mouse that consumers use with their computers — and they’re learning what makes these mice click.
“We’re very early in the game,” said Eric Antonow, advisor to Katabat, a real estate technology company that offers lead management and lead generation tools for the real estate industry. “They’re concerned with what’s the right way to pay for these, what’s a fair price for these and what’s the cost to really service the leads. ‘Am I making money or am I not making money on a particular source?'”
Antonow formerly served as president and CEO of the company, which is now a division of Trader Publishing Co. Katabat offers a product called Pipeline Manager that tracks all Web, third-party and relocation leads. That product, which launched about three years ago, is in use by about 70-80 of the top 200 brokers in the country, Antonow said.
The product helps brokers to identify the quality of leads and to track leads from inception to closed transactions. “What kinds of effort do I have to put in as a broker? What kinds of effort do agents have to put at it? What’s convertible in the first place? That’s what brokers are trying to understand,” Antonow said.
Katabat is planning to release a new version of the product within a couple of months that will focus on the process that brokers can follow to make sure that leads do not stagnate and die. “It has less to do with analytics and more to do with process,” Antonow said, adding that the new version will provide formalized guidance — a recipe of sorts — for shepherding leads through to conversion.
“Brokers have gotten more savvy and more sophisticated, and found out ways to increase conversion rates,” Antonow said. Larger brokers typically have more financial resources to devote to lead management that monitors success of online marketing efforts, he said.
While some online lead-generation companies have focused on selling their services to agents in the past, brokers are catching on now, Antonow said. And some of them have several years of experience at this point.
A good conversion rate these days — meaning the number of online leads that turn into business for a real estate brokerage — is on the order of 6 percent, Antonow said, meaning six out of 100 online leads may turn into transactions for the brokerage.
Important metrics that the industry is watching, he said, are how much staff time and effort it takes to generate a lead and follow the lead through to conversion, what are the costs associated with each lead, and what types of leads are more likely to lead to new business.
“There are so many different real estate customers out there,” he said. “The buyer looking at listings — that’s one type of customer. When (the Web user) inquires about property, that’s another type of customer. If the person fills out a form, that’s extremely important. It doesn’t really matter (to brokers) if a person spends two minutes on a site or five minutes on a site.” It’s more important, he said, to know what percentage of visitors to a Web site are turning into serious leads.
Michael Montsko, president of Weichert Lead Network, said his company’s online marketing campaigns are delivering 70 percent of the company’s Web traffic. The company specializes in lead incubation and customer management for the Weichert Realtors brokerage network.
“We’re still at this time increasing our own online (ad) buys,” he said. Web analytics on consumers’ online behavior are more robust now than they have been in years past, he said, and it’s now possible to build better consumer profiles based on the data collected from online consumers. By tracking what consumers are viewing online, the company can add and enhance Web content to give them more of what they’re looking for, he said.
And the lead network’s system allows Weichert to track a lead all the way from its inception to closing, and to calculate a return on investment for that lead.
The company is constantly experimenting with new sources of leads, too, he said, in order to quantify which lead sources are most productive and cost-effective. “We do trials with a lot of the new partners. We track them and compare them to the existing partners we’re using. We put the money where it makes us money. If we lose money we no longer do business (with those sources).”
Montsko predicts that more companies will go in-house with their own lead management systems to help gauge success in online marketing efforts.
Sarah Shoemaker, director of customer services for Real Living, an Ohio-based real estate brokerage company, said the company contracts with WebTrends, a Web analytics company, to help gauge its online marketing success. The company provides information on Web traffic, page views, frequently viewed pages and search-engine marketing campaigns. Real Living has built its own in-house lead management system to help manage the leads it receive through online marketing efforts.
“What we will focus on this year is not just looking at where traffic is coming from, we are tying it back to return on investment,” she said.
The company is focusing on the “calls to action,” meaning the types of things that encourage consumers to engage with the Web site and the brokerage company itself. “We know that consumers continue to come to the Web site to search for properties. Consumers are also interested in comparative market analysis,” she said.
The real estate industry is “definitely getting better” at converting online leads, Shoemaker added.
The industry has been better about getting leads than it has been with tracking those leads, said Joel Macintosh, CEO at WolfNet Technologies, a real estate technology company based in Minneapolis, Minn. “It is one of the biggest weaknesses out of most of the customers I talk with,” he said. “Not enough folks are measuring the close or measuring the actual results.
“Now that people are understanding there’s a pretty substantial cost (with leads) … (they are) spending more money on tracking,” he said.
WolfNet developed a product called Lead Tracker and is beta-testing a new product called Lead Manager, he said. The company captures as much information as it can about online consumers using Web sites it manages, MacIntosh said. The Lead Manager product has been high on the list of his clients, as they are looking for a solid way to gauge how much return they are getting for their investment in online advertising, he said. “There is absolutely no question about it — (it’s) the number one request we get where they have a certain level of urgency.”
WolfNet monitors what users are doing at its Web sites, and each user is tracked individually. The company captures information about which Google search terms users entered before clicking through to an affiliated Web site, for example, he said.
“There’s still tremendous fragmentation in the technology,” he added, and WolfNet and some other companies are working to integrate lead management with other real estate technology products into a comprehensive package to eliminate the need for multiple vendors.
Glade Jones, president and CEO of real estate technology company Obeo, which provides multimedia content and other services associated with property listings, said he collects a lot of data about Web traffic to track the success of marketing campaigns. The information he collects from Web traffic has been useful in gearing the site to better cater to consumers, he said. “We analyze the patterns of the consumers, so that we can give them the product they’re after.”
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