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The best real estate lead is not the same as the hottest lead. They are quite dissimilar. In the world of real estate, pursuing high-quality leads can feel like chasing a mirage. Hot leads, or those inquiries that are promising to be just a heartbeat away from a transaction, often seem like the holy grail. So, is faster really better?
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Successful Realtors who invest heavily in buying leads, know that it’s crucial to understand that not all leads are created equal. The most valuable leads have the best ROI. The best leads will ultimately transact and have the intent to transact. They are not online clickbait leads; they are already familiar with your brand or have previously engaged with you.
The hot lead fallacy
Hot leads are often defined as prospects who are ready to buy or sell immediately. They’re the ones who fill out a form or reach out after seeing a compelling ad.
On the surface, it makes sense to prioritize these leads. “Speed to lead” is tattooed on some agents’ arms for this reason. However, research shows that focusing solely on hot leads can lead to missed opportunities and lower conversion rates over time.
According to a study by the National Association of Realtors (NAR), 65 percent of real estate transactions are influenced by prior interactions with the brand or agent. This indicates that leads who have engaged with your brand before or have a prior relationship with you are more likely to convert into clients.
Familiarity matters
- Trust and relationship building: Leads who know your brand or have worked with you previously are more likely to trust you. Trust plays a pivotal role in real estate transactions, where clients are making significant financial decisions. Building a relationship over time enhances your credibility and makes these leads more comfortable choosing you as their agent.
- Increased conversion rates: Data from Walnut reveals that marketing leads can take at least 18 to 24 months to nurture, raising the conversion rate 75 percent compared to those that are not nurtured. This underscores the importance of maintaining and nurturing relationships over time rather than focusing exclusively on immediate conversions.
- Reduced marketing costs: Re-engaging with leads who already know your brand or have worked with you in the past often requires less investment than acquiring entirely new hot leads. Numbers on this vary, but it’s widely accepted that retaining clients is less expensive than finding new ones.
Maximizing lead value
- Build a strong brand presence: Ensure your branding is consistent and visible across multiple channels. Regularly engage with your audience through newsletters, social media and valuable content to keep your brand top-of-mind.
- Leverage CRM tools: Utilize customer relationship management (CRM) systems to track interactions with past clients and leads. Personalized follow-ups and targeted offers can significantly enhance your chances of conversion.
- Focus on referrals and repeat business: Encourage satisfied clients to refer others to you and offer incentives for repeat business. Happy clients are often your best advocates and can bring in more qualified leads.
- Implement lead nurturing campaigns: Develop automated lead nurturing campaigns that provide value over time, keeping your leads engaged and informed about the market. This approach helps in maintaining their interest and increasing the likelihood of conversion.
Food for thought
While hot leads can certainly provide immediate opportunities, they aren’t always the most valuable in the long run. Leads who know your brand and have previously worked with you often offer more significant and sustainable benefits.
By focusing on building and maintaining these relationships, you not only enhance your conversion rates but also reduce marketing costs and foster a more loyal client base.
The goal is no longer “speed to lead.” The new goal is “feed to lead.”
Invest in nurturing and feeding your leads while cultivating a strong brand presence. Feed your leads. As the data shows, the most valuable leads aren’t necessarily the hottest — they’re the ones with the best ROI who trust you and are already familiar with your work.
Chris Drayer is co-founder of Revaluate which segments consumers for marketers by propensity to move.
