Converting Online Leads Into Dollars

By Bridget McCrea

It sounds simple enough in theory, but in reality the act of converting online leads into actual business requires a calculated, methodic approach that often eludes even the best REALTORS®. The temperature of an online lead cools down fast, with potential buyers cruising through numerous websites, picking out a few properties, and sending inquiries to multiple agents. Being the first to respond is critical.

When it comes to online real estate leads, Sherry Gorman, broker/owner at L3 Realty in Hickory, says she and her seven agents use a calculated process for turning them into paying customers. She estimates that 20 percent of the firm’s leads are generated online, namely through its own corporate website. Yard signs, online and offline advertising, and other mechanisms drive that site traffic. Once prospects get to L3 Realty’s online home, they are asked to fill out a registration form that gives them access to the region’s MLS.

Once registered, prospects are assigned to an agent who reaches out to them via phone (if a number has been provided) or email. “We try to gauge the level of motivation and see just how far away the prospect is from buying or selling,” Gorman explains. “Once we have that information we can develop manual and/or DRIP email campaigns around those motivations.”

Agents then update the prospects on a daily basis via email with market updates, new listings, and other pertinent information. Some agents use the firm’s DRIP email system and others prefer to use direct, customized messages. Ultimately, Gorman says the goal is to get the prospect into the office for a buyer or seller interview. Like most other real estate firms across the country, L3 Realty converts about 1 to 2 percent of all online leads into paying customers.

Gorman is happy with her firm’s online lead conversion and says that in many cases her agents’ consistency and persistence help L3 Realty be the “go to” agency when the buyer or seller does decide to enter the market. “We basically stay in touch without bothering them, knowing that it could be four to six months down the road before they make the move,” says Gorman. “A lot of times we get the call because we’re the only ones who stayed in touch.”

Paving a Success Path

It’s no secret that technology has changed the way homes are bought and sold in America, where the Internet has replaced more “traditional” means of searching for available properties. According to the 2011 National Association of REALTORS®’ Profile of Home Buyers and Sellers, the number of buyers who use the Internet to find a home has risen from a slight 2 percent in 1995 to a whopping 88 percent last year.

Real estate agents still reign when it comes time to close the deal. NAR says 91 percent of homebuyers who used the Internet to search for a home purchased through an agent. Many times, it’s the first agent to respond who gets the business, as evidenced by the fact that a high percentage of all buyers and sellers only contacted one agent before deciding whom to hire.

But while the industry numbers may be aligned in the agent’s favor, the art of transforming online leads into closed deals is anything but easy. National conversion rates hover around the low single digits, and sometimes even lower. Veiled by the anonymity of the Internet, buyers can hop around from site to site (making requests of multiple agents along the way), provide bogus information about themselves, and drop off the face of the earth at any given time. These and other factors can make establishing a trusting relationship – the very core of the agent-client dynamic – difficult at best.

Matt Hernacki, broker/owner at MisterHomes.com Real Estate in Palatine, Ill., says his team has broken through those barriers and today generates about 63 percent of its new business via the web. Roughly 5 percent of the online leads are converted into closed deals. Most of the leads come through the company’s website, which is promoted heavily using pay-per-click advertising.

To maximize every lead, Hernacki says he avoids autoresponders and instead focuses on a more personalized approach. Individual agents handle the task by scouring all incoming messages and addressing them on a case-by-case basis. “They’re physically looking at every email, which is a lot of work,” he admits. “But it succeeds in the long run because the buyers or sellers know that someone is actually paying attention to their questions and their needs.”

If a lead isn’t ready to purchase within the next few months, a MisterHomes.com agent will push the prospect over to a DRIPemail campaign system that Hernacki says is “still highly personalized,” using elements like video messages. “We realize that everyone is getting these emails from all different companies,” says Hernacki, “so we strive to make our messages as personalized as possible. That’s the only way to stand out.”

A Lasting Impression

To agents who assume that they can flip a switch to create an effective lead incubation system overnight, Hernacki says a better approach is to compare the project to building a pipeline. Every element must be in place, he says, or the system will not flow properly or operate as expected. Use messages like “We know you’re not ready to buy right now, but here are a few options to consider,” to let buyers know that you understand their individual situations.

“The ultimate goal should be to create a system through which a wide variety of customers will be ready to purchase at different intervals,” says Hernacki. “That way, you’ll always have a selection of individuals who are ready to work with an agent.”

Gorman says being consistent and patienct are keys to success when nurturing online leads, particularly when you’re dealing with prospects whose timelines are longer than a few months. “It takes time to cultivate these buyers and sellers, but in the end it’s worth it when you can be the agency that stands out from the clutter online,” says Gorman, “and that makes a lasting impression.” v

10 Online-Lead Cultivation Tips

1. Try to be the first to the party every time.

2. Use your smart phone and other portable devices as tools for getting to the prospect first.

3. Answer online inquiries within seconds or minutes – preferably when the prospect is still viewing your listing.

4. Use personalized responses whenever possible.

5. Don’t assume that just because a lead hasn’t turned into business within 60 to 90 days that it isn’t any good.

6. Use written communication skills in email, particularly when working on the fly and answering messages via smart phone.

7. Be as thorough as possible when answering every email to help convey the message that you are a trusted resource and an expert who can guide the client through the transaction.

8. Avoid online lead generation firms that demand money upfront or long-term contracts.

9. Investigate potential lead generation targets from the consumer perspective to see how they conduct business.

10. Use a combination of personal emails and phone calls, DRIPcampaigns, social networking, and other tools to cultivate relationships with online prospects.