Model Two: Your Lead Generation Model

As important as your Economic Model is, your Lead-Generation Model is just as important. Why? One relies upon the other—the two go hand-in-hand. Once you know how many appointments you must have, you now have to generate the leads necessary to generate those appointments. That’s where your Lead-Generation Model comes in. Leads are fuel to your economic engine. And here is a truth that you must never lose sight of: You can never have enough good leads. Never.

THE POSITIONING BATTLE

One of the great “ahas” I took away from reading the marketing classic Positioning: The Battle for Your Mind, by Al Ries and Jack Trout, was the idea that the human mind is an “inadequate container.” The basic idea they share is that under the constant bombardment of advertising and marketing, the human mind becomes saturated by brands and can hold only a finite number at any one time. Ries and Trout cite the work of Harvard psychologist George A. Miller when they assert that the maximum number of product brands we can remember for a given category— the brand “saturation point” for the mind—is seven. That’s when I had a huge “aha.” Their book is about major brand advertising, the multimilliondollar campaigns behind soft drinks, airlines, cars, and fast-food chains. It made me wonder what the implications were for the local real estate agent marketing to their target audience. Chances are, if the average person can’t name more than seven brands of potato chips, they can’t possibly name more than two or three real estate agents in their market.

Data gleaned from the 2002 National Association of Realtors (NAR) Profile of Buyers and Sellers tends to back this up. According to NAR research, 76 percent of all sellers contacted only one agent and 16

percent contacted just two. On the buyer side, the statistics are just as revealing. According to the same NAR research, 59 percent of all buyers interviewed only one agent and 22 percent met with just two! From this we can clearly see what Ries and Trout are talking about— “mind share” for real estate agents is slim to none. Considering all the information people are assaulted with, they tend to block out all but the bare minimum, if for no other reason than self-defense. Clearly, with so many choices, people will tend to limit what they remember. Average out the NAR statistics, and you’ll see that roughly 86.5 percent of all buyers and sellers seem to have room in their minds for only one or two real

“Invest in yourself. Market your name and presence.” Elaine Northrop Millionaire Real Estate Agent Ellicott City, MD estate agents. In the battle for real

Sales volume—$71 million estate consumer mind share, you’re either first or second or you’re out of contention. You’re either at the head of the class or with the rest and lost in the mass!

Real Estate Mind Share Positioning

Everyone Else

8%

16% 76%

Two Agents One Agent Sellers

Everyone Else

19%

22% 59%

Two Agents One Agent Buyers

Figure 8

So the big question and challenge is how to win those first two positions of real estate mind share with enough people. The answer is through a systematic lead-generation effort.

PLAYINGTHE NUMBERS GAME

It is undeniably true that the higher the quality of your leads, the better your conversion rates. This truth is so self-evident that many real estate agents focus most of their lead-generation efforts on getting “quality leads.” But this truth can be misleading. The real issue is even bigger than conversion rates. It is your net results—the number of converted leads you achieve and the sales volume into which they translate. High conversion rates will allow you to generate the same income from fewer leads than if you had lower conversion rates. But lower conversion rates can be just as effective if you can amass a great number of leads. So while your conversion rates are very important, the number of leads you must generate is even more critical. The octane of your fuel is irrelevant if you don’t have enough to get you to your destination. Big real estate sales destinations need a big number of leads.

Highly successful real estate agents will tell you that as far as lead generation is concerned, “the quality is in the quantity.” Whereas most real estate agents do modest lead generation and get modest results, a few do massive lead generation and reap massive rewards. They are the Millionaire Real Estate Agents.

Interestingly, many agents are seduced by the search for the perfect marketing image and invest large amounts of time and money in this pursuit. Now, there is no question about it, your marketing look and message are very, very, very important. However, we must keep them in perspective. Our experience working with top agents has taught us that even as important as your look and message are, there is a much stronger correlation between sales leads generated and the consistency and frequency of