What Is a 'Lead' to You?
What Is a 'Lead' to You?
The sea change in real estate these past few years has made leads more valuable than ever before. However, we also have more conduits to create leads than we’ve ever had before. We have social media tools such as Facebook and LinkedIn. We have mobile marketing through QR codes and TextBack. We have Craigslist ads, pay per click ads on Google, and niche marketing Web sites. And, of course, we have more traditional approaches like open houses, referral marketing, farming, FSBOs, and expireds.
Whether your overall strategy employs cutting-edge technology solutions, tried and true methods, or a blending of those, the end result should be to turn leads into business. But most companies and agents encounter problems somewhere in the process of moving from lead capture to lead conversion to commission conversion. In particular, lead conversion — that is, turning a received lead into a face-to-face presentation — is a frequently a source of frustration.
Let me share a key stat: According to the National Association of REALTORS®’ 2010 Profile of Home Buyers and Sellers, 64 percent of the buyers bought through the first agent they met with. That means that you have what amounts to a two in three chance of getting a commission check if you meet with the buyer before anyone else. Success is not the result of pure luck, but a matter of understanding simple arithmetic.
To move the odds in your favor through lead conversion, there are a couple of things you must do. First, you have to ask yourself one critical question: What is your definition of a lead?
People’s definitions will tell a great deal about where they are in the business. When I was starting out, my definition of a lead was very simple: someone who wanted to buy or sell. But it was also very broad and excluded very few people.
As my business has gotten more refined, so too has my definition of a lead. Now, I believe a “real lead” is someone who will take action in the next 30 days and has a defined need or void that can be clearly identified and filled by my service. Either they have a high level of exclusive commitment to me or I can get them to that level by meeting with me (and they’re willing to meet with me).
When I first started, I didn’t fully understand the business. I was chasing after any and every deal I could find. Because my definition or philosophy about a lead was so broad, practically everybody on the face of the earth qualified as a potential client. But most of my potential “clients” were nothing of the sort. I spent a tremendous amount of time trying to persuade people to buy or sell who really never were going to buy or sell.
Eventually, I learned to tighten my definition to anyone who would buy or sell within a year. Then I tightened even more to anyone who would buy or sell within six months, then 60 days, and finally down to my current demarcation. If I had done this from the beginning, I would have saved myself from a lot of mistakes, anguish, and lost income.
Now, I’m not saying to throw the long-term leads away. Actually, let me put it as clearly as possible: Do not throw the long-term ones away! Today, we’re finding people in the search process much earlier than before because they’re out looking and shopping. We need to engage and connect with them.
However, real estate pros get into trouble when they spend too much time on the long-term leads. Their mix of short- and long-term leads is out of alignment. They spend too much time working the latter and are unable to prospect to generate the former, and go broke in the interim! Success is located in a balance between the two.
There is the false belief in this business that a great salesperson could “sell ice to an Eskimo,” as the saying goes. The truth is, that would never happen. Great salespeople would have such a good grasp of the surrounding environment and their own definition of a lead that they wouldn’t waste a minute of their time selling “ice to an Eskimo.”
The law of attraction clearly states you will be attracted to what you are looking for, and vice versa. What does your lead definition attract to you? If you’re using a broad, general, or unspecific definition, then that’s what you’ll get in the form of leads. If you have a clear picture of the time frame, motivation level, financial position, urgency level, and commitment level that you want, you will attract that. Your ability to define leads and establish a communication process with them that ends with a face-to-face meeting in your office is the path to your success in this business.