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Real estate agents can rank the quality of leads

Todays Date: November 19, 2018

In previous articles, I’ve stressed the importance of consistent lead generation. I’ve also shared that my goal was to generate 400 new leads each month. In this article, we will focus on lead quality.

Right now, many agents seem to be focusing almost exclusively on generating leads inexpensive leads. The problem is, I have found that these inexpensive leads tend to be lower-quality leads.

This is what I have found in my business:

Leads of lower-quality seem attractive because they are generated without spending a lot on the “front end” to generate them. However, what seems to be happening is agents are spending more on the “back end,” which is the process of attempting to convert leads to sales after the leads are captured. This “back end” marketing includes sales letters, special offers, drip e-mail campaigns, postcards and more.

For my own business, the ranking of the quality of leads is as follows: (Ranked from highest to lowest quality)

1. A referral

2. Endorsement from a joint venture partner

3. Registrants for a special class

4. Leads who respond to an advertorial ad

5. Leads who respond to a “pay-per-click” ad or “solo” e-mail

6. Leads who respond to a classified ad or home buyer magazine ad

7. Leads responding to a free internet ad (Craigslist or similar)

So many agents seem to be focusing on these free or cheap ads that attract lower-quality leads. What ends up happnening, then, is major effort required to convert these leads into appointments, showings and sales.

To be successful, an agent’s marketing campaign must include leads from each of the sources listed above. I would evn suggest that more resources be invested in the top four or five categories, in order to capture higher-quality leads. The amount invested will be higher, but the higher-quality leads will mean less invested per lead to convert them into clients/buyers.

If you want to see less competition in your area, heed this advice. The majority of your competitors will continue to put the emphasis on the inexpensive ads that bring in the lower-quality leads. Let them work with those leads. How many agents in your market are putting together joint venture marketing campaigns? How many are running advertorial advertisements? I would guess there probably aren’t too many.

Why is this the case?

Because if an agent focuses on lower quality leads, they won’t sell very many homes. With limited home sales, their funds will be tight and they won’t be able to afford to run advertisements that attract higher quality leads. You’ll gain a long-term economic advantage simply by focusing on attracting higher quality leads.

The bottom line is that a lead is not a lead. There are different qualities in the leads you generate. You should create a comprehensive marketing campaign that focuses on generating higher quality leads and let your competitors fight over the lower quality leads.

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