All the smart money in real estate seems to be on new business models and lead generation. But let me tell you why everyone is wrong.
Leads that agents generate themselves are immeasurably more valuable than leads they buy and will be for the foreseeable future — maybe forever.
Third-party generated leads have some advantages. You don’t have to work for them (for most agents, this is easily the biggest advantage.) They can represent a steady stream of opportunities. And for new agents, they can get things going quicker.
But there are substantial downsides.
Those kinds of leads generally have miserably low conversion rates, so they are resource-intensive.
They represent an arena where agents pour themselves into a disloyal group of strangers. Do they trust you? Can you trust them? Agents will always get burned much, much more often when dealing with a random assortment of people as opposed to the people they get when generating their own leads through friends and contacts.
The power of trust
These leads also can be taken away at any time — they certainly don’t represent a solid foundation for one’s business. And they can be very expensive.
There are more downsides, but really the negatives about third-party generated leads aren’t the primary reason to focus on agent-generated leads.
It is the substantial benefits of agent-generated leads and what they represent for someone looking to build a vibrant, thriving practice, that make me urge you to think hard about where you really want your business to come from.
Real estate transactions are just as emotional as they’ve ever been and are more complicated than they’ve ever been.
Those two realities demand relational solutions: When consumers enter the buying or selling process, they want and need a trusted guide. That trusted guide can potentially be found online — but that’s a coin flip.
If they know, like and trust someone who can help them, someone who has proven themselves valuable and who has demonstrated professional competence, it is no contest. Those consumers aren’t going to click on any buttons online to find a random agent.
Get up and go
What we can do is take control of our marketplaces, by nurturing and leveraging every connection we have in our communities. That means really getting to know people over a period of time and earning their trust.
Afraid of the disruptors coming into your industry? Afraid they’re going to make you irrelevant? Afraid of the giant wads of money in their pockets and the supposed power that brings?
Write a few personal notes, and you will erase ever so many marketing dollars spent by disruptors trying to come out of left field and scooping up your people.
Grab your phone, make a few free calls to people you know, chat for a bit — you don’t even necessarily need to talk business — and you will be flexing giant muscles the disruptors don’t have and will never develop. Stay involved in your community.
Do a few pop-bys, and you’ll really shake the disruptors: They literally don’t have a face, so they’ll never get face-to-face, which is the most effective marketing of all. But you can do it all day long.
Not complacent — confident
The disruptors that have entered our industry have done so for a reason: There is room for change and for new ideas and approaches. Those of us in the “traditional” world can’t afford to ignore them. This is not a time to be smug and satisfied.
But we also need not fear these disruptors, and we certainly don’t have to surrender anything. Because we still command the heights of the real estate industry.
But we are going to have to live in a new reality where ultimately, the tech companies are going to be able to gather and crunch through vast reams of data to do a better job of matching consumers and agents.
It’s just a matter of time. Dating companies have done it for romance. Amazon has done it for retail. Politicians, the ultimate marketers, use data to target voters. Companies use your phone, your use of your apps and your location to make decisions about you.
It’s a data rich world, and we just live in it. So you’re going to have to up your game and make sure your strongest attributes stand out to be properly matched when the artificial intelligence, machine learning and big databases evolve to become powerful matchers in our industry.
The new real estate startups do have piles of money, so they can do things you can’t. But the things they can’t do, and that you can for now, are by a very, very wide margin more powerful.
Use that power. Leverage it. You still own this business. And there isn’t any amount of money or any form of technology that can knock you off your perch, if you redouble your efforts at connecting with your people in real life.
If you do, prospects may be less likely to find a random agent. They’ll be more likely to contact you.
Brian Walker manages a top producing Indianapolis branch office for Indiana’s largest independent real estate firm, the F. C. Tucker Company. He’s been in the business since 1995, and resides with his wife and daughter in Carmel, Indiana.
