by: Kevin Markarian, Forbes Real Estate Council
Thirty years ago, lead generation focused on people far down the sales funnel — that is, people ready to buy or sell immediately. Today, agents no longer need to focus solely on this demographic.
Digital platforms have upended how, when and where lead generation happens in real estate. First, real estate portals such as Realtor.com and Zillow have the capacity — at a cost — to connect potential buyers to agents. More importantly, with social media, it is now possible to nurture clients long before they become active. Finally, there is now a wide range of platforms available to help track consumer behaviors and automate outreach to consumers. Still, to make the most of these new platforms and tools, agents need to adopt a new approach to lead generation, focusing on the entire life cycle of the client.
Focus On The Entire Sales Funnel
If you think about sales as a funnel, any agent’s goal should be to nurture leads at three key points. Each of these points targets a different demographic and comes at a different cost.
1. Top-of-the-funnel leads: This is where you find people not yet actively looking to buy or sell a home but who may change their minds. They could also be in the early stages and not realize they are getting close to buying or selling, but their actions may indicate to a marketer that they are on the path to buying a home soon. For example, people who are planning a wedding are often on the path to buying a home. People about to expand their families are also often on the path to upsizing their homes, even if they don’t already know it. At the top of the sales funnel, the focus is on getting to know people through the actions they are taking online (i.e., the content they are viewing or clicking). I recommended tools like Facebook, Instagram and other social media platforms.
2. Mid-funnel leads: This is where you find people who are interested but not yet working with an agent. I recommend using Google Analytics for leads in this phase.
3. Bottom-of-the-funnel leads: This is where you find people ready to take action (e.g., actively saving listings on a real estate portal). For these leads, I recommend real estate portals like Zillow and Realtor.com.
The challenge is to discover how to get the most out of each of these platforms and tools and do so at the lowest cost.
Leverage Social Media Platforms
At the top or outer edge of the funnel, there are social media platforms such as Facebook. The people you encounter on these platforms typically aren’t yet ready to “transact” yet, but this doesn’t mean they won’t down the line. I think about these people as “sought after” and “reactionary.” For example, they might be online searching for posts on a seemingly unrelated topic, such as gardening, yet if presented with an ad about buying or selling a home, they may still click on the ad. So, in contrast to someone on a real estate portal who is already actively seeking out properties, these individuals are not actively looking to buy. But this doesn’t mean they won’t react to a real estate ad if and when presented with one.
Since these people are at the top of the sales funnel, the timeline to convert will be longer. A lead on Facebook may take months and even years to convert, but quick-turn conversion isn’t the goal here. The goal is to build your database and build relationships.
The benefit of using social media platforms to nurture leads is twofold. First, that cost is negligible. Depending on the market, it is possible to convert leads for pocket change. This is a huge advantage for new agents since it doesn’t require a significant investment upfront. Second, nurturing leads on social media can help agents build a large database of “followers” or people who can be converted over time. The goal is simple: Get in front of people higher up the funnel and keep retargeting them over time so when they do get closer to transacting, they already know the agent with whom they will work. These long-term strategies nearly always pay off.
Since only a small percentage of leads ever convert, you have to nurture many leads to succeed. Of course, you can only engage with a limited number of people on any given day. The solution is to automate every stage of your sales pipeline. But how you automate is as important as whether you do it.
Automation requires authenticity. Investing in the very best CRM software will backfire if your automated messaging comes across as canned. Remember, real estate agents are in the communications business. If you automate your lead generation and your messaging sounds automated, your conversion rate will suffer. Automation isn’t about going on automatic pilot. It can help nurture leads, but not without human oversight.
Use Portals, But Not Exclusively
Zillow, Realtor.com, Trulia and other portals can help agents find and convert leads, but these portals can come at a high cost. Are they worth it? The truth is that they can yield a great return. Still, they are best used in tandem with platforms that nurture online leads further up the sales funnel.
The most successful agents are those who understand how to nurture leads from the top to the bottom of the sales funnel, using an entire range of digital platforms, tools and portals. The best way to secure your own success and ensure your brokerage will invest in you is by ensuring you understand how to leverage these platforms, tools and portals to your advantage.